Solar Encapsulation Market Analysis

Global Solar Encapsulation Market Overview

Solar Encapsulation Market Size was valued at USD 4922.78 million in 2023. The Solar Encapsulation Market industry is projected to grow from USD 5331.37 million in 2024 to USD 10429.53 million by 2032, exhibiting a compound annual growth rate (CAGR) of 7.70% during the forecast period (2024 - 2032). 

Solar encapsulation refers to the process of enclosing photovoltaic (PV) solar cells within protective materials to enhance their durability, performance, and longevity. Solar cells are exposed to various environmental conditions, including moisture, temperature fluctuations, UV radiation, and mechanical stresses. Encapsulation aims to safeguard the solar cells from these elements and maintain their efficiency over time.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Solar Encapsulation Market Trends

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  Increasing demand for electricity generated from renewable sources to fuel the solar encapsulation market.

  
  

Global demand for energy is rising as world population is still increasing. Developed countries continue to consume huge amounts of energy while demand is increasing in developing countries. The world population in 2020 of 7.8 billion is projected to increase by 1 billion over the next 10 years and reach 9.6 billion by 2050, according to a UN report. Between 2005 and 2030, energy needs are projected to expand by 55 per cent, with demand increasing from 11.4 billion tons of oil equivalent to 17.7 billion. 

The energy consumption is expected to increase by 50 per cent, with the bulk of the demand coming from developing countries. As electricity is one of the essential sources to meet the growing demand for energy and as the greenhouse gas emissions are regulated to protect the climate, the need for electricity from renewable sources are expected to rise. In addition, stronger policies and raised climate goals leading into COP26 are driving more electricity from clean and renewable sources. 

Additionally, Solar PV remains the powerhouse of growth in renewable electricity, with its capacity additions forecast to increase by 17% in 2021 to a new record of almost 160 GW. This is thereby projected to increase the demand for PV modules over the coming years. Moreover, as encapsulation of a PV module is an essential process to prolong its operational durability, the demand for solar encapsulation is also set to rise over the coming years.

Increasing government initiatives and stringent environment regulations

The growing adoption of renewable energy across the globe, in order to reduce the dependency on conventional fossil fuels, is boosting the solar encapsulation market. Further, numerous countries have initiated or are in the process of initiating projects and schemes, coupled with implementing several environmental regulations, to promote the usage of renewable energy, thus driving the industry growth. 

Stringent regulations to curb the greenhouse gas emissions heightening the Solar Encapsulation Market. In the year 2014, the European Union has announced directive 2003/87/EC with the target to reduce the emissions to 20% by 2020. Also, in 2016, the government of China under its thirteenth five-year plan has announced its plan to reduce the emission level to 18% by 2020. 

Moreover, several countries, such as Japan, the United States, the United Kingdom, France, Australia, India, and Brazil, have started taking initiatives to develop the solar power sector. In 2018, India announced its plans to create 10 GW of floating solar capacity; various other countries are following the trend, which is why solar power is anticipated to have a significant share in the total energy mix of the world during the projection period. This, in turn, is expected to drive the demand for solar encapsulation materials over the long term.

Growing adoption of off-grid solar equipment is surging the solar encapsulation market.

Off-grid solar solutions are an alternative for storing renewable energy amid the looming energy crisis and fluctuations in oil prices. Off-grid solar systems can work independently and store energy with the help of batteries. International agreements on lowering carbon emissions and pushing forward on sustainable development schemes are major factors driving the market. 

As per the world bank reports, the off-grid solar industry has grown into a $1.75 billion annual market, providing lighting and other energy services to 420 million user. Since 2017, revenues from the off-grid solar industry continue to rapidly grow, increasing by 30 percent annually. To date, more than 180 million off-grid solar units have been sold worldwide and the sector saw $1.5 billion in investments since 2012. 

With 840 million people still lacking access to electricity, the growth of the off-grid solar industry is critical to meeting the Sustainable Development Goal (SDG7) for universal access to affordable, reliable, sustainable and modern energy by 2030. The adoption of off-grid equipment is driven by increasing requirement for solar energy from small and medium enterprises (SMEs) and the growing government initiatives. 

This rise in off-grid solar equipment is expected to increase the demand for solar panels and encapsulation is an important step in the process of building solar panels. Thus, with the growing adoption of off-grid solar equipment globally, the market for solar encapsulation is also expected to rise over the forecast period.

Solar Encapsulation Market Segment Insights:

Solar Encapsulation by Technology Insights

The Solar Encapsulation Market segmentation, based on technology has been segmented as thin film solar and polycrystalline silicon solar. Among these, the polycrystalline silicon solar is projected to dominate the Solar Encapsulation Market revenue through the projected period. Presently, worldwide PV market is dominated by the polycrystalline silicon technology, about 80 % of the total addressable market. 

For decades, crystalline silicon has dominated the solar industry. The rest is based on thin film solar cell technologies such as copper indium gallium selenide (CIGS) and cadmium telluride (CdTe). However, they have captured less than 5% of the market, because it’s hard to make them as efficient or cheap as conventional solar panels. Most enterprises favor the crystalline technology because of former problems with thin film a-Si technology caused by high failure rates as well as degradation of efficiency. 

For many years multicrystalline Si held a dominant market share because of lower costs, mostly due to less energy consumption and higher throughput per crystallization tool. Polycrystalline solar panels are cheaper than monocrystalline panels. It outpaces thin film in numerous areas such as the Voc and Vmp is higher, temperature coefficients are higher, the I-V curve fill factor is 73%-82% in comparison to thin films 60%-68% and efficiency ratings are 13%-19% in comparison to thin films 4%-12%. 

While thin film technology has an advantage over crystalline PV modules in terms of pricing, crystalline silicon modules are rapidly closing the price gap as prices continue to decline. Thus, it is believed that polycrystalline silicon segment will grow even further in the upcoming years.

Solar Encapsulation by Material Insights

The Solar Encapsulation Market segmentation, based on material, the market is segmented as ethylene vinyl acetate, ionomers, polydimethylsiloxane, polyvinyl butyral, thermoplastic polyurethane, and polyolefin. Out of which the ethylene vinyl acetate segment dominated base year market and is also projected to be holding a dominating share in the forecasted period as well. EVA is a material that has been used in the PV industry for decades. Ethylene vinyl acetate (EVA) is a material that has good radiation transmission and low degradability to sunlight. 

In fact, EVA encases over 80% of photovoltaic (PV) modules on the market today. This copolymer is widely used for encapsulating solar modules as EVA is inexpensive and has good optical properties. This is a thermoplastic polymer, which is used in solar modules as an encapsulating agent since, by applying heat to the assembly, it forms a sealing and insulating film around the solar cells. 

It is used in solar modules due to its desirable properties such as high electrical resistance, low processing and cross-linking temperatures, outstanding melt fluidity, low water absorption characteristics, excellent optical transmission, good adhesive properties, and high elasticity. In addition, the photovoltaic module with this type of encapsulation protects cells from mechanical damage, moisture infiltration as well as UV radiation. 

Moreover, EVA encapsulation is an integral part of the industry standard. Relative to other encapsulant materials, EVA is also inexpensive, cured quickly, and adhered well to module components owing to which it occupies the largest share in market. However, adhesive degradation, interface delamination, and subsequent reduction in cell efficiency by EVA has increased the number of materials in the solar encapsulant space and is creating tremendous competitive pressure on the market expansion of Ethylene Vinyl Acetate solar encapsulants.

Solar Encapsulation by End-use Insights

The Solar Encapsulation Market segmentation, based on material, the market is segmented as automotive, electronics, construction, and others. Out of which the construction segment dominated base year market and is also projected to be holding a dominating share in the forecasted period as well. In the construction industry, green buildings have been gaining popularity in the last few decades. 

The use of green energy in the sector has amplified in recent times as more numbers of homes, offices, and industrial units are opting for this solar energy. Furthermore, the sector is increasing the amount of investment in solar energy due to its high energy requirements. In addition, with increasingly stringent carbon reduction regulations worldwide, builders are also turning to renewable-based hybrid systems such as solar energy to power their sites. 

Moreover, the world has experienced a surge of urban growth in recent years. With more than half of today’s population lives in metropolitan areas, and an estimated two-thirds is projected to live in cities by 2060, city planners project they will add 2.48 trillion square feet of new construction. 

Additionally, ambitious carbon reduction policies along with the growing trend of green, zero-emission construction, the adoption of solar energy will continue to increase in the construction industry in the years to come. Moreover, with improving technology and additional manufacturers, solar-related prices continue to drop. Thus, with the construction of buildings with sustainable energy systems continuing to rise, the solar encapsulation industry is also projected to see growth in the coming decade.

Solar Encapsulation Regional Insights

By Region, the study segments the Solar Encapsulation market into North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America. The sizable solar encapsulation industry in Asia-Pacific is likely to make the region the largest expanding global market for solar encapsulation. In the APAC region, the solar encapsulation market is predicted to have healthy growth over the forecast period. 

Rise in solar module production capacity of key manufacturers in China and India, the significant rise in solar technology production in China and India, government subsidies, increased acquisitions and mergers by local manufacturers, augmented production of cost-effective ethylene vinyl acetate films and applications in solar PV modules in China, rising renewable energy needs, and growing awareness about the different perks of PV technology in the countries of the region are adding to the solar encapsulation market growth in the region.

Solar Encapsulation Key Market Players & Competitive Insights

Major market players are spending a lot of money on R&D to increase their product lines, which will help the Solar Encapsulation Market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Solar Encapsulation Market industry must offer cost-effective products to expand and survive in an increasingly competitive and rising market environment.

One of the primary business strategies adopted by manufacturers in the global solar encapsulation industry to benefit clients and expand the Solar Encapsulation market sector is partnerships and acquisitions. The market for Solar Encapsulation is recognized as being extremely competitive and fragmented. 

The market for Solar Encapsulation offers considerable potential opportunities for domestic and unorganized companies. Some of the key players operating in the market are 3M (U.S.), Dow Inc. (U.S.), DuPont (U.S.), Arkema (France), Specialized Technology Resources (U.S), RenewSys (India), Solutia (U.S.), Mitsui Chemicals (Japan), Hangzhou First Applied Material (China), Borealis (Netherland), Kuraray (Austria), Hanwha (Japan), Targray (South Korea), and dnpSolar (Canada). To increase their global reach and client base, key firms are concentrating on acquisitions and product innovation.

3M.: 3M offers diversified technology products, and has a global presence. 3M is one of the leading manufacturers of products that serves a wide range of the industry verticals. The company offers more than 60,000 products that are used in homes, businesses, schools, hospitals and other industries. 

The company operates in the business segments including safety and Construction, transportation and electronics, health care, and consumer. Moreover, 3M has corporate operations across 70 countries and sales in 200.3M products are sold through various distribution channels such as directly to users and through different e-commerce as well as traditional wholesalers, retailers, jobbers, distributors and dealers across variety of trades in many countries in the world.

Dow Inc.: Dow is one of the leading materials science companies. The company offers solutions including plastics, Construction intermediates, coatings and siliconesfor consumer care, infrastructure, and packaging industries.Dow operates across various countries and regions of world including the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. 

The company operates through its six major segments including Packaging, Specialty Plastics, Construction Intermediates, Infrastructure, Performance Materials and Coatings. The Packaging & Specialty Plastics segment of Dow offer functional polymers, such as polyolefin elastomers, semiconductive and jacketing compound solutions and wire and cable insulation. The ENGAGE   PV Polyolefin Elastomers (POE) by Dow is used for PV encapsulant films due to its long-term performance, reliability and lower overall costs.

Key Companies in the Solar Encapsulation Market includes

• 3M (U.S.)


• Dow Inc. (U.S.)


• DuPont (U.S.)


• Arkema (France)


• Specialized Technology Resources (U.S)


• RenewSys (India)


• Solutia (U.S.)


• Mitsui Chemicals (Japan)


• Hangzhou First Applied Material (China)


• Borealis (Netherland)


• Kuraray (Austria)


• Hanwha (Japan)


• Targray (South Korea)


• dnpSolar (Canada)

Solar Encapsulation Industry Developments

November 2019: RenewSys launched a one-of-its-kind ‘Photovoltaic Laboratory’ specifically equipped to test Encapuslants, Backsheets and their raw materials.

December 2021, RenewSys launched its new EVA Encapsulant ‘CONSERV  Giga Fast Cure’ that can reduce the ‘curing’ stage of module manufacturing by 2-3 minutes per module. 

October 2020: RenewSys India Pvt. Ltd., increased the manufacturing capacity of its Encapsulant (EVA & POE) lines to 3 GW (from 1.65 GW). Similarly, the Backsheet capacity expanded to 4 GW (from 3 GW).

Solar Encapsulation Market Segmentation

Solar Encapsulation Technology Outlook

• Thin Film Solar


• Polycrystalline Silicon Solar

Solar Encapsulation Material Outlook

• Ethylene Vinyl Acetate


• Ionomers


• Polydimethylsiloxane


• Polyvinyl Butyral


• Thermoplastic Polyurethane


• Polyolefin

Solar Encapsulation End-use Outlook

• Automotive


• Electronics


• Construction


• Others

Solar Encapsulation Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • Russia
  
  
  • Italy
  
  
  • France
  
  
  • Spain
  
  
  • UK
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia & New Zealand
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Middle East & Africa
  
  
  
  • Turkey
  
  
  • South Africa
  
  
  • GCC Countries
  
  
  • Rest of Middle East & Africa
  
  
  
  


• Latin America
  
  
  
  • Brazil
  
  
  • Mexico
  
  
  • Argentina
  
  
  • Rest of Latin America