Rooftop Solar PV Market Trends

Growth Drivers

• Government policies and regulations: Globally, governments are implementing favorable policies including feed-in tariffs (FiTs), tax incentives, and renewable portfolio standards (RPS), to promote the adoption of solar PV systems. These initiatives provide financial incentives to homeowners and businesses, making rooftop solar installations more affordable and appealing. FiTs and RPS, play a crucial role in promoting solar energy adoption. FiTs guarantee a fixed, premium price for electricity generated by solar rooftops, ensuring long-term financial stability for system owners. This incentive attracts investment by making solar energy financially viable and competitive with conventional energy sources.
  
  Additionally, FiTs, provide predictability for investors, encouraging large-scale rooftop solar projects and fostering market growth.RPS further strengthens the solar industry by mandating a specific percentage of electricity generation from renewable sources. These policies create consistent demand for solar power, encouraging innovation and driving down costs. By implementing such regulations, governments stimulate private investment in solar rooftop installations, ensuring a steady transition towards clean energy. For example, Germany's FiT program significantly contributes to its leadership in solar energy adoption.
  
  By guaranteeing above- rooftop solar PV market rates for solar-generated electricity, the policy incentivized widespread solar panel installation, ultimately reducing costs and increasing grid parity. Additionally, regulatory measures increasingly mandate integrating rooftop solar PV systems to meet certain energy efficiency standards. This regulatory push also stimulates the further need for rooftop solar PV installations during the forecast period.

• Technological advancements: Innovations such as developing high-efficiency solar panels, including perovskite tandem cells, have markedly improved energy conversion rates. For instance, JinkoSolar’s tandem solar cell based on N-type TOPCon set new record with a conversion efficiency of 33.84% in January 2025, surpassing JinkoSolar’s previous record of 33.24%. Similarly, Hanwha Qcells reached a world record of 28.6% efficiency on a full-area M10-sized perovskite silicon tandem cell, using an industrial silicon wafer designed for integration into an industrial module.
  
  Advanced inverted technologies and optimized system designs have further enhanced the reliability and costs of rooftop solar PV systems. These technological enhancements have resulted in shorter payback periods for installations, thus making them increasingly appealing to both homeowners and businesses.For instance, LONGi announces the new world record efficiency of 30.1 for the commercial M6 size wafer-level silicon perovskite tandem solar cell, demonstrating the practical applications of these technological enhancements.
  
  Rising energy costs: As electricity prices from traditional fossil fuel sources continue to increase, solar PV systems have become increasingly cost-competitive. In numerous regions, the cost of electricity generated by rooftop solar PV installation is now compared to or even lower than that of grid-supplied electricity. The International Energy Agency (IEA) reports that China is expected to address increasing electricity demand in the upcoming years due to structural changes in its economy. In 2023, the country’s electricity consumption grew by 6.4%, driven primarily by services and industrial sectors.
  
  China's electricity consumption per capita already surpassed that of the European Union by the end of 202 and continues to rise. The expansion of solar PV modules, electric vehicles, and related material processing is expected to sustain strong electricity demand, reflecting the country’s evolving economic structure and commitment to industrial growth.This economic benefit is anticipated to drive higher adoption rates of rooftop solar PV systems among both homeowners and businesses.

The graph below indicates an upsurge in energy prices globally:
      Source: International Monetary Fund via FRED

Challenges

• High initial investment: Despite the substantial long-term savings associated with rooftop solar installations, the significant upfront costs can deter many consumers. For instance, in the U.S. the industry average cost for solar systems is between USD 3 to USD 4 per watt. A typical 7 KW residential solar system in the U.S. averages approximately USD 24,500 without including the 30% federal ITC Investment Tax Credit. By including the tax credit, the costs were further reduced by USD 7,350.

• Furthermore, several state and local incentives such as rebates and tax credits, further alleviate the financial burden. Financing options, including solar loans and power purchase agreements, enable homeowners to adopt solar energy with minimal initial expenditure, effectively addressing the barrier of high upfront costs. Additionally, numerous state and local incentives, further alleviate the financial burden. Financing options, including solar loans and PPAs (Power Purchase Agreements), enable homeowners to adopt solar energy with minimal initial expenditure, effectively addressing the barrier of high upfront costs.

• Intermittency of solar energy: Rooftop solar PV systems rely on sunlight, leading to intermittent energy generation that poses challenges for consistent power supply. Energy storage solutions, such as lithium-ion batteries, can mitigate this issue by storing excess energy produced during peak sunlight hours for use during periods of low solar output. However, the high costs associated with these storage technologies remain a significant barrier to widespread adoption.