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  • Published On : Sep 2023
  • Code : CMI6265
  • Pages : 140
  • Formats :
      Excel and PDF
  • Industry : Energy

The Home Solar System Market size is expected to reach US$ 212.81 billion by 2030, from US$ 67.20 billion in 2023, at a CAGR of 17.9% during the forecast period.

A home solar system consists of solar panels, batteries, inverters and other electrical components that allow homeowners to generate, store and consume solar power in their houses. The growing adoption of rooftop solar PV systems in residential buildings is driving the market growth globally. Key factors propelling the uptake of home solar systems include declining costs of solar components, favorable government policies, rising electricity prices, and increased environmental awareness.

Home Solar System Market Regional Insights

  • Asia-Pacific: This region is the largest market for home solar systems, accounting for over 40% of the global market in 2023. The growth of the market in this region is driven by factors such as rising government incentives, increasing awareness of solar energy, and declining costs of solar panels. China is the largest market for home solar systems in Asia-Pacific, followed by India, Japan, and South Korea.
  • North America: The North American market for home solar systems is the second largest in the world, accounting for about 30% of the global market in 2023. The growth of the market in this region is driven by factors such as increasing government incentives, favorable policies, and rising demand for renewable energy. The United States is the largest market for home solar systems in North America, followed by Canada and Mexico.
  • Europe: The European market for home solar systems is the third largest in the world, accounting for about 20% of the global market in 2023. The growth of the market in this region is driven by factors such as increasing government incentives, rising awareness of solar energy, and declining costs of solar panels. Germany is the largest market for home solar systems in Europe, followed by Italy, France, and the United Kingdom.

Figure 1. Global Home Solar System Market Share (%), by Region, 2023

 | Coherent Market Insights

Home Solar System Market Drivers

  • Declining Costs of Solar PV Systems: The costs associated with solar photovoltaic (PV) systems including panels, inverters and other components have declined significantly over the past decade. This has been driven by improvements in solar cell technologies, manufacturing scale and supply chain efficiencies. The levelized cost of electricity from residential solar PV systems has reduced by over 70% since 2010. As solar power achieves grid parity in more regions, homeowners are finding solar to be an economically viable option to meet their electricity needs and reduce dependence on utilities. The declining costs is a major driver fostering the adoption of rooftop solar and growth of the home solar system market globally.
  • Supportive Government Policies and Incentives: Governments across the world have implemented various policy measures and financial incentives to accelerate the deployment of solar energy systems at the residential level. These include capital subsidies, feed-in tariffs, renewable portfolio standards, net metering, and solar renewable energy credits. For instance, the federal solar tax credit in the U.S. allows homeowners to deduct 26% of the cost of installing a solar system from their taxes. Such incentives along with renewable purchase obligations make home solar power attractive, overcoming cost barriers and driving market growth.
  • Innovations in Solar Technologies: Advancements in solar cell, module and system technologies are contributing to higher efficiencies, improved reliability and lower costs - making home solar solutions more viable. For instance, PERC, heterojunction, bifacial and other high-efficiency solar cells have increased module efficiency to over 20%. Smart modules with integrated microchips aid better energy yield monitoring and outage mitigation. Expanding battery storage capacities, smart inverters and EV integration are also driving technological improvements in the home solar ecosystem.
  • Growing Electricity Prices and Demand: Rising retail electricity prices coupled with increasing power consumption in residential buildings due to economic growth, rising incomes and improving access to electricity is escalating the demand for solar energy systems from homeowners. With savings on monthly energy bills over long-term, solar power helps consumers hedge against energy inflation and recurring fuel costs. This consumer pull is likely to persist, given the outlook for continued electricity price rise, driving uptake of rooftop solar.

Home Solar System Market Opportunities

  • Emerging Battery Storage Systems: The coupling of solar power systems with battery-based energy storage opens new opportunities for home solar growth. It allows residential consumers to store excess solar power during daylight hours for use later when sunlight is unavailable. This improves solar energy self-consumption and provides backup power during grid outages. Cost declines, improving performance of lithium-ion and other emerging battery chemistries, and evolving business models like solar+storage as a service will drive the adoption of integrated solar and storage solutions.
  • Off-grid Applications: Home solar systems present a promising decentralized energy access solution for millions living in remote areas without reliable grid connectivity. The advances in standalone solar systems, DC appliances and productive use applications enable affordable off-grid electrification. Government programs supporting solar deployments to unelectrified homes and communities in developing countries would create substantial opportunities for the off-grid home solar market segment.
  • Integration with Smart Technologies: The convergence of solar systems with artificial intelligence, big data analytics, IoT and smart home technologies will create new capabilities for homeowners. Smart solar monitoring, predictive maintenance, voice assistants, automated control of appliances will drive smarter, efficient utilization of solar energy. Solar + storage integrated with home energy management systems and EV charging enables customized solutions, thereby expanding home solar use cases.
  • Peer-to-peer Solar Energy Trading: Peer-to-peer solar trading allows consumers with rooftop solar panels to sell excess generation to their neighbors. Blockchain-enabled distributed ledger technologies facilitate such decentralized energy transactions between prosumers and consumers directly. This creates opportunities for home solar owners to become part of a local shared solar community and monetize excess solar power, boosting returns on investment. Startups piloting peer-to-peer energy trading networks could accelerate its adoption.

Home Solar System Market Report Coverage

Report Coverage Details
Base Year: 2022 Market Size in 2023: US$  67.20 
Historical Data for: 2018 to 2021 Forecast Period: 2023 to 2030
Forecast Period 2023 to 2030 CAGR: 17.9% 2030 Value Projection: US$  212.81 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., Spain, France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa:  GCC Countries, Israel,  South Africa, North Africa, and Central Africa and Rest of Middle East
Segments covered:
  • By Component: Solar Panels, Solar Batteries, Solar Inverters, Mounting Systems, Trackers, Others
  • By End-User: Residential, Commercial, Industrial, Utility, Others 
  • By Grid Type: On-grid, Off-grid, Hybrid
  • By Solar Module Type: Mono-crystalline, Poly-crystalline, Thin Film, Others
  • By System Type: Ground Mounted, Rooftop Mounted, Floating PV Systems
Companies covered:

SunPower Corporation, Vivint Solar, Sunrun, Tesla, LG Electronics, Panasonic Corporation, JinkoSolar, Canadian Solar, ReneSola, Trina Solar, Yingli Green Energy, SMA Solar Technology, Enphase Energy, SolarEdge Technologies, Daqo New Energy Corp, JA Solar, LONGi Green Energy Technology, Array Technologies, First Solar, REC Group

Growth Drivers:
  • Declining costs of solar PV systems
  • Supportive government policies and incentives
  • Innovations in solar technologies 
  • Growing electricity prices and demand
Restraints & Challenges:
  • High upfront costs and long payback periods
  • Intermittency of solar power generation
  • Lack of supportive infrastructure and limited roof space

Home Solar System Market Trends

  • Solar Leasing and Shared Solar Ownership Models: The emergence of third-party solar leasing and solar PPA models have mitigated ownership-related barriers limiting on-site solar installations for homeowners. Under a solar lease, homeowners can install solar panels on their rooftop with low upfront costs and pay for the systems through monthly lease payments to a solar leasing company. Shared or community solar allows households to subscribe to offsite solar arrays and obtain credits on their electricity bills. These innovative models reduce financial burdens, making solar access easier for homeowners.
  • Solar Shingles and Building Integrated Products: An emerging alternative to rack-mounted modules are integrated solar shingles, tiles, roofs which replace conventional building materials used in residential roofing. BIPV products such as solar shingles made of flexible thin-film PV laminates provide an aesthetically pleasing, unobtrusive rooftop solar installation. While costs are currently high, increased adoption of BIPV technologies would improve economies of scale.
  • Residential Community Solar and Solar Districts: Developers are increasingly integrating solar energy solutions across residential communities, neighborhoods and large-scale housing projects during construction itself. Pre-installed rooftop solar systems or shared ground-mounted solar farms built to serve energy needs of the entire residential community generate clean power for all homes. Planned solar districts represent a promising trend benefitting both builders and homeowners.
  • Solar Storage Retrofits for Existing Home Solar Systems: Retrofitting battery storage systems to existing residential solar PV systems is rising as a key trend. Homeowners with already installed solar panels are adding batteries to maximize solar energy utilization. Companies are offering retrofit options and new capabilities like smart energy management for previously installed solar+storage systems. Retrofits help in harvesting greater value from solar infrastructure.

Home Solar System Market Restraints

  • High Upfront Costs and Long Payback Periods: Despite declining solar PV costs, the high upfront investment required for installing complete solar systems remains a key adoption barrier. Additional expenses related to roof upgrades, electrical works, permits and labor costs add to the overall price for homeowners. The long payback period of over 4-8 years on initial investment lowers consumer motivation for installing on-site solar systems.
  • Intermittency of Solar Power Generation: The intermittent nature of solar energy generation arising from diurnal cycles and unpredictable weather conditions like cloud cover limits the use cases for homeowners. Reliable power supply cannot be ensured solely based on rooftop solar systems, unlike continuous electricity from the grid. This poses an adoption restraint especially where net metering policies are unavailable.
  • Lack of Supportive Infrastructure and Limited Roof Space: Inadequate transmission and distribution infrastructure for decentralized renewable power integration along with lack of net metering facilities in parts of developing countries slow down home solar market growth. Suitable roof space constraints, structural issues and ownership barriers in high-rise apartments also limit installations. Limited product standardization and underwriting challenges impact solar financing options.

Recent Developments

New product launches

  • In January 2022, Tesla launched its Solar Roof V3, an integrated solar panel shingle roof with higher efficiency and easier installation. The product aims to make solar an attractive, integrated roofing option for homeowners.
  • In June 2021, SunPower launched its Equinox home solar system, integrating intelligent technology to maximize energy production. The system comes with SunVault storage and mySunPower app for homeowners.
  • In May 2020, LG Electronics unveiled its NeON R solar panel for residential market. The panel delivers improved temperature performance and power output.

 Acquisition and partnerships

  • In August 2022, Sunrun acquired Sunfolio, a residential solar and home energy management company. This allowed Sunrun to expand its operations in key western states in the U.S.
  • In July 2021, SunPower partnered with Woodside Homes, one of the top U.S. homebuilders to provide its Equinox Solar Systems in new home communities.
  • In June 2020, Sunrun acquired Vivint Solar, a major residential solar and smart home company. The acquisition created one of the leading home solar and energy services company.

Figure 2. Global Home Solar System Market Share (%), by Solar Module Type, 2023

 | Coherent Market Insights

Top companies in Home Solar System Market

  • SunPower Corporation
  • Vivint Solar
  • Sunrun
  • Tesla
  • LG Electronics
  • Panasonic Corporation
  • JinkoSolar
  • Canadian Solar
  • ReneSola
  • Trina Solar
  • Yingli Green Energy
  • SMA Solar Technology
  • Enphase Energy
  • SolarEdge Technologies
  • Daqo New Energy Corp
  • JA Solar
  • LONGi Green Energy Technology
  • Array Technologies
  • First Solar
  • REC Group

*Definition: The Home Solar System Market refers to the market for solar photovoltaic systems designed to generate electricity for residential buildings. It comprises rooftop solar PV systems, solar shingles, solar tiles and other integrated building-applied photovoltaics installed in individual homes, apartments, and residential communities. With homeowners seeking energy self-sufficiency and environmental sustainability, the global adoption of solar power systems for decentralized power generation in the residential sector has surged over the past decade. This transition has been aided by the declining costs of solar modules, advancements in energy storage technologies, and favorable government regulations. Key components of home solar systems include solar panels, inverters, racking systems, and batteries for energy storage. The growth of this market is expected to accelerate as more homeowners switch to solar for reliable and clean power supply.

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Frequently Asked Questions

High upfront costs, lack of infrastructure in developing countries, competition from conventional energy sources, intermittency of solar power.

Declining costs of solar systems, government incentives, growing environmental awareness, advancements in solar technologies.

The leading component segment is solar panels due to advancements in efficiency and energy yield.

SunPower, Vivint Solar, Sunrun, Tesla, LG Electronics, Panasonic, JinkoSolar, Canadian Solar, ReneSola, Trina Solar, Yingli Green Energy, SMA Solar, Enphase Energy, SolarEdge Technologies, JA Solar, First Solar.

Asia Pacific is expected to lead the Market.
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