Solar Equipment Market Trends

Growth Drivers

• Government policies & incentives: Most of the nations across the world are offering subsidies, tax rebates, and feed-in tariffs, which efficiently reduce upfront costs and encourage investment in solar infrastructure. Therefore, the presence of such policies is stimulating consistent demand for solar panels, inverters, and other equipment. The Government of India in August 2025 reported that the country has implemented many solar incentives to accelerate renewable adoption, which include PM Surya Ghar for rooftop electricity, PM-KUSUM for farmer solar pumps, and large-scale solar parks for utility generation. The report also mentioned that these schemes offer financial support for domestic manufacturing, thereby boosting the production of solar modules from 38 GW to 74 GW and PV cells from 9 GW to 25 GW in FY 2024-25. Furthermore, the initiatives such as floating solar projects, agrivoltaics, and PM JANMAN are focused on land-efficient energy generation and the electrification of tribal regions, hence positively impacting the solar power equipment market growth.

India Solar Incentives & Statistical Data (2025)

Source: Government of India

• Technological improvements: The advances in terms of solar technology, which include high-efficiency PV cells, bifacial modules, and integrated inverters, are reducing the cost per watt and improving the total energy output. Simultaneously, the innovations in terms of energy storage systems and smart grid integration are also enhancing the value of solar equipment, making solar power more attractive for a wider range of applications. In August 2025, Oxford PV reported that it had set a new world record with its perovskite-on-silicon tandem solar panels, by achieving 25% efficiency higher when compared to the typical 21% to 23% of commercial modules. Besides, it is developed with Fraunhofer ISE, wherein the panels deliver 421 W over 1.68 m² using scalable industrial processes, enabling more power generation from the same area. Furthermore, this reduces electricity costs and accelerates the adoption of clean energy across residential, commercial, and utility sectors, hence contributing to solar power equipment market growth.
• Rising energy demand: This, coupled with the sustainability goals, is consistently driving business in the solar power equipment market. Also, the governments, corporations, and residential consumers are making a shift towards renewable energy sources to meet sustainability targets.  In this regard, the Government of India in December 2025 reported that rising energy demand in the country, evidenced by a 5.21% increase in electricity generation to 1,829.69 BU in 2024-25 and a meta peak of 241 GW with near-zero shortage, coupled with sustainability goals, is driving consistent growth in the solar power equipment market. Also, the Government initiatives, such as PM Surya Ghar, adding ~7 GW of clean energy and connecting ~24 lakh households, and non-fossil sources currently account for over 50% of the 505 GW installed capacity, which are efficiently accelerating the adoption of solar technologies, hence denoting a positive solar power equipment market outlook.

Challenges

• Supply chain constraints: This is a major hampering factor for the solar power equipment market, negatively impacting both manufacturing and project deployment timelines. Besides the critical components, such as polysilicon, wafers, inverters, and battery cells, which are sometimes subject to raw material price volatility, international trade restrictions, thereby straining manufacturers in this field. In addition, geopolitical tensions and regional manufacturing dependencies, particularly in China and Southeast Asia, are complicating the logistics of sourcing and delivering essential equipment. Hence, the presence of these constraints can lead to increased costs for project developers and longer lead times, ultimately causing a delay for commissioning schedules.
• Policy and regulatory uncertainty: This remains as yet another obstacle for the expansion of the solar power equipment market since the project economics are influenced by government incentives, tariffs, and renewable energy mandates. Any changes in feed-in-tariffs, subsidy programs can alter the project viability, thereby affecting both domestic and international investments. In addition, the continuously changing domestic regulations in terms of grid interconnection and environmental approvals may add to burgeoning compliance expenses, making it challenging for small-scale manufacturers. Therefore, manufacturers and developers must closely monitor policy landscapes and actively engage with government agencies to navigate these uncertainties.