28 Oct 2023
Solar EPC Market size exceeded USD 215 billion in 2022 and is projected to expand at over 4% CAGR from 2023 to 2032. Driven by the tightening sustainable development targets across several global economies. Growing environmental concerns, as well as stringent regulatory mandates to reduce GHG emissions, are fueling the development of the Solar EPC Market. EPC is used to provide end-to-end solar services such as system design, component procurement, as well as project installation. Engineering design involves customer requirement analysis, site survey, weather monitoring, structural design, determining power generation capability, equipment selection, engineering design, and 3D modeling of the proposed solar power plant. The growth factor, such as favorable government plans, which include investment tax credits, tax rebates, and FiT, along with the rising environmental concerns to limit GHG emissions, are projected to propel the Solar EPC industry. Furthermore, rising demand from end-user industries such as commercial, residential, industrial, utility, and institutional is also projected to propel the Solar EPC Market.
The Market Dynamics
Growth Driver
Concerns regarding fuel demand are growing : Due to the ongoing debate over the degradation of the environment, the worldwide solar EPC industry has gained significant traction. Significant increases in consumer environmental issues, as well as the adoption of different stringent rules to lower greenhouse gas (GHG) emissions, forced organizations to implement impactful energy-saving methods such as solar EPC. Considerable improvements and modifications, as well as enhanced cost, are expected to benefit the market in the coming years.
Rising electricity demand : Global power consumption increased considerably as a result of growth in population and economic activity. The rising standard of living and infrastructure development is driving the requirement for power generation. To meet rising demand, most countries are constructing new solar power plants or widening the capacity of currently operational ones. This is expected to encourage the growth of the solar power sector, generating potential for key players in the solar EPC market over the forecast period.
Increasing Solar Energy Investment Due to environmental regulations, numerous businesses are building renewable energy facilities. In order to reduce carbon emissions, several nations are concentrating on environmentally friendly power generation options. One of the most cost-effective renewable energy sources is solar energy. As a result, numerous governments are making significant investments in solar energy. Increased expenditure on solar power is anticipated to result in possibilities for solar EPC market participants.
Growing Interest in Renewable Energies and a Promising Future for Clean Energy : The requirement for solar engineering procurement and construction is anticipated to increase due to a growing focus on energy from renewable sources, a favorable clean energy outlook due to carbon dioxide (CO2) emissions from the burning of fossil fuels, and concern over reducing emissions from greenhouse gas. Furthermore, the market is being propelled by an increasing number of projects that use renewable energy sources. For example, a 750 MW solar plant in Madhya Pradesh was operational in July 2020. The Rewa Ultra Mega Solar Power is made up of three solar-generating units, each with a capacity of 250 MW.
The Challenges of EPC Segment
Investment, as well as a lack of facilities, continue to pose a risk to market expansion
The overall expenditure for solar PV is greater than the expense of installing routine solar panels, which may limit its approval in residential houses with low energy demands. For instance, 15 ground-mounted 300-watt solar panels would cost USD 14,625. With each solar panel costing an additional USD 500 due to the solar structure, the solar power generation structure is used less frequently. Furthermore, a shortage of facilities is a barrier to investment in this market. Lack of knowledge regarding the advantages of solar PV over primary grid electricity in countries like Asia-Pacific and Europe may hinder market expansion.
The Opportunities : As solar tariff barriers fall, large IPPs and incorporated utilities are likely to invest in internal EPC capabilities in order to improve the project economy, boosting the percentage of industries with inhouse EPC features. This changing industry trend may result in the consolidation of the Solar EPC market. As a result, stand-alone EPC companies are anticipated to merge with larger players or incorporate into full project developers and power producers. Furthermore, the rise of automation technology has resulted in leaner operations, resulting in higher initial capital costs but larger savings over the project’s lifetime. Due to the growing usage of information technology in the solar energy sector, automation is going to have to be included as a key component.
The Segments Insight
Type Insights : The rooftop segment is anticipated to grow at the highest CAGR from 2023 to 2032. The rooftop sector is projected to be in high demand since it receives a greater quantity of solar power than ground mounted. Solar EPC rooftop segment involves several steps, including site assessment, system design, equipment procurement, installation, and commissioning. Rooftop solar installations have become increasingly popular in recent years due to the declining cost of solar panels, government incentives, and increasing environmental awareness. These installations provide numerous benefits, including lower electricity bills, reduced carbon emissions, and increased energy independence. The growing demand for the segment is due to the greater quality of solar power as well as decreasing cost of solar panels. They also assist in lowering the emission of carbon as well as electricity bills. The ground-mounted sector is expected to expand at the fastest CAGR from 2023 to 2032. A groundmounted solar energy system is installed on the ground rather than on a rooftop. Ground-mounted solar systems offer several advantages over rooftop systems, including the ability to install larger systems, improved energy production due to optimal panel orientation and tilt, and easier maintenance and cleaning. Ground-mounted solar systems are typically larger in size and capacity than rooftop systems and are often used for utilityscale or commercial projects. The ground-mounted Solar EPC are installed as they have several advantages such as enhanced production of energy as well as ease in maintenance and cleaning.
Technology Insights : The photovoltaic sector held a maximum market share in 2022, and this trend is expected to continue during the projected period due to ongoing initiatives and growth in the energy sector. Photovoltaic technology converts sunlight into electricity by using a semiconductor material, such as silicon, to create an electric field. When sunlight hits the semiconductor material, it releases electrons, which are captured and used to generate electricity. Solar EPC (Engineering, Procurement, and Construction) refers to the process of designing, procuring, and building solar power plants or solar energy systems. These are widely used due to their adoption in various industrial sectors. The concentrated solar power sector is anticipated to expand at the fastest CAGR from 2023 to 2032. CSP installation is expected to increase in the solar EPC industry because of greater efficiency, lower operating expenses, installation simplicity, and lower carbon emissions. Furthermore, a significant decrease in the price of plant components due to tax and duty revisions or improvements has impacted technological deployment. Ongoing manufacturing trends have encouraged solar deployments around the world, which is expected to boost product demand even further
End-User Insights : Due to the favorable regulatory scheme as well as rapid technological advancement, the residential sector is projected to expand rapidly in this industry from 2023 to 2032. The residential segment of solar EPC involves installing solar energy systems in residential buildings, such as single-family homes, townhouses, and apartments. The residential segment of solar EPC is gaining popularity as more homeowners are looking to reduce their energy bills and carbon footprint. The solar energy systems installed in residential buildings typically include solar panels, inverters, and a monitoring system. The solar panels are installed on the roof of the building or in a location with optimal sunlight exposure. The inverters convert the direct current (DC) power generated by the solar panels into alternating current (AC) power that is used in the home or fed back into the grid. The monitoring system allows homeowners to track the performance of their solar energy system. The industrial sector is a significant market for solar EPC companies, as many large industrial facilities require a considerable amount of electricity to power their operations. Installing solar energy systems helps these facilities reduce their electricity bills, improve energy efficiency, and cut carbon emissions. The growth of the industrial sector is driven by increasing demand for renewable energy, declining costs of solar energy systems, and supportive government policies and incentives. The commercial sector is anticipated to grow at a remarkable pace from 2023 to 2032. Solar EPC for a commercial project involves several steps, including site assessment, design and engineering, procurement, installation, commissioning and testing, and ongoing monitoring and maintenance. Working with an experienced solar EPC contractor is crucial to ensure the successful installation and long-term performance of a commercial solar power system. The solar EPC (engineering, procurement, and construction) industry consists of the companies and organizations involved in designing, procuring, and constructing solar energy systems. This market has experienced significant growth in recent years due to the increasing demand for renewable energy sources and government initiatives promoting clean energy. One of the key drivers of the solar EPC market is the declining cost of solar energy technology. In many countries, governments offer financial incentives, such as tax credits and subsidies, to companies and individuals who invest in solar energy systems. These incentives assist to generate a more favorable market for solar EPC companies and stimulate growth in the industry.
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