Solar Encapsulation Market size was valued at USD 5.6 billion in 2023 and is poised to reach USD 16.7 billion by the end of 2036, growing at a CAGR of 9.2% during the forecast timeline, i.e., 2024-2036. In 2024, the industry size of solar encapsulation is assessed at USD 6.1 billion.
The increasing adoption of solar energy as a sustainable and renewable power source is driving the solar encapsulation market. The International Energy Agency (IEA) reported that global annual renewable capacity additions increased by almost 50% to around 510 gigawatts (GW) in 2023, the highest growth rate in the last 20 years. As governments and organizations around the world promote cleaner energy solutions and offer incentives for solar energy projects, the demand for efficient and durable solar panels rises. Moreover, advancements in encapsulation technology, such as the development of more durable and efficient materials, also contribute to market expansion.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
9.2% |
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Base Year Market Size (2023) |
USD 5.6 billion |
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Forecast Year Market Size (2036) |
USD 16.7 billion |
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Regional Scope |
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Material (Ethylene Vinyl Acetate, Thermoplastic polyurethane (TPU), Ionomers, Polydimethylsiloxane, Polyvinyl Butyral, Polyolefin)
The ethylene vinyl acetate segment in the solar encapsulation market is estimated to gain the largest revenue share of 38.1% by 2036. EVA is the most widely used encapsulant in solar panels. Nearly 80% of photovoltaic (PV) modules are encapsulated by EVA materials. It provides a protective layer that enhances the durability and performance of solar cells by protecting them from environmental factors like moisture and UV radiation. EVA’s adhesive properties ensure strong bonding between solar cells and the protective glass or backsheet, contributing to higher efficiency and longer lifespans of solar panels. Moreover, it is relatively cost-effective compared to other encapsulation materials thus, supporting the growth and development of the market.
Technology (Crystalline Silicon Solar, Thin-film Solar, Cadmium-telluride (CDTE), Copper-indium-gallium-selenide (CIGS), Amorphous silicon (A-Si))
Throughout the projected period, the crystalline silicon solar segment in the solar encapsulation market is foreseen to register a significant CAGR. Crystalline silicon technology, including monocrystalline and polycrystalline solar panels, is the most prevalent type of solar technology used globally. This dominance ensures a consistent and high demand for encapsulation materials to protect these panels. As the adoption of crystalline silicon technology expands, particularly in emerging markets and large-scale solar installations, the need for effective encapsulation solutions grows.
End user (Construction, Automotive, Electronics, Ground-mounted, Building-integrated Photovoltaic, Rooftop Solar, Floating Photovoltaic)
By the end of 2036, the rooftop solar segment is predicted to hold substantial share of the global solar encapsulation market. Rooftop solar installations are becoming increasingly popular for residential and commercial buildings as homeowners and businesses seek to reduce energy costs and carbon footprints. This growth translates into higher demand for solar panels and, consequently, encapsulation materials. According to IEA, the number of global households relying on rooftop solar PV is estimated to grow from 25 million in 2022 to more than 100 million by 2030.
Our in-depth analysis of the solar encapsulation market includes the following segments:
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Material |
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Technology |
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End user |
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APAC Market Statistics
Asia Pacific solar encapsulation market is projected to hold the largest revenue share of 68.5% by 2036. Rising urbanization in the region drives the market by increasing the demand for solar panels in urban infrastructure and residential areas. According to the World Economic Forum, the share of the world’s population living in cities is expected to rise from 55% in 2022 to 80% by 2050. Urbanization fosters technological advancements and innovation. As cities evolve, there is need for better, more efficient solar technologies, including improved encapsulation materials that can withstand urban environmental conditions.
China is at the forefront of advancements in solar technology. Innovations in encapsulation materials such as improved EVA formulations and alternative materials are driven by the need for higher efficiency and durability in solar panels.
India is one of the fastest-growing countries adopting solar panels. The government provides various incentives, including subsidies, tax benefits, and favorable policies to promote solar energy. These incentives boost the installation of solar panels and increase the need for high-quality encapsulation materials.
North America Market Analysis
North America solar encapsulation market will register significant revenue by 2036, propelled by the increasing number of solar farms, which are massive solar PV panel systems that feed the grid with electricity. This may significantly augment the market demand for solar encapsulation, as it is essential to provide structural support to the solar cell in the solar panels.
In the U.S., the solar encapsulation market is driven by the expansion of solar parks and large-scale solar farms, particularly in sunny states like California, Texas, and Arizona. To withstand the harsh environmental conditions, there is an increase in the demand for effective encapsulation solutions. In 2023, the U.S. Energy Information Administration stated that there are more than 5,000 solar farms in the nation. In 2022, they produced 3.4% of the nation's electricity.
Additionally, Government of Canada has introduced new regulations aimed at growing the renewable energy sector, whereby all electricity used in government buildings and operations by 2025 will come from renewable sources. Also, investments by major firms contribute significantly to the solar encapsulation market expansion.
The solar encapsulation market key players play a crucial role in advancing solar encapsulation technologies and driving industry growth through innovation, quality, and extensive product offerings.
Author Credits: Dhruv Bhatia
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