The global solar energy market is projected to grow from $492.7 billion in 2025 to $974.7 billion by 2031, a compound annual growth rate of 10.8% between 2026 and 2031, according to a report by BCC Research.

Asia-Pacific holds the largest market share at 57.8%, supported by large-scale manufacturing capacity, renewable targets and established supply chains across China, India and Southeast Asia, the report said.

Falling levelized costs of electricity, supportive government policies and growing integration of solar with battery storage and EV charging infrastructure are expected to drive growth. The report highlighted that national initiatives such as Saudi Arabia's Vision 2030 and Brazil's Ten-Year Energy Expansion Plan are supporting development.

Despite the strong outlook, the industry faces near-term challenges including manufacturing overcapacity, declining module prices, margin pressure and higher interest rates. The four largest China-based solar manufacturers collectively recorded net losses of more than $1.5 billion in 2025 despite record shipments. Canadian Solar reported a 6.6% revenue decline, while SolarEdge faced losses tied to distributor backlog cancellations in Europe.

Companies with differentiated technology portfolios and exposure to emerging, policy-supported markets could be better positioned to weather pricing pressure, the report said, with perovskite tandem cells, thin-film PV and module-level power electronics expected to offer opportunities.