The solar lighting system market is estimated to be valued at USD 10.22 Bn in 2024 and is expected to reach USD 27.77 Bn by 2031, growing at a compound annual growth rate (CAGR) of 15.35% from 2024 to 2031. With increasing global investment in clean energy and solar power infrastructure across both residential and commercial sectors, the demand in solar lighting system market is set for strong growth.

Market Driver - Growing Environmental Concerns Leading to Increased Adoption of Renewable Energy Sources

Concerns around climate change and the environmental impact of conventional fossil fuel-based energy sources are growing. Many nations and communities have started prioritizing the transition to cleaner and greener renewable energy options.  These trends are contributing to the growing adoption of solar lighting systems across both residential and commercial sectors.

Individual consumers are increasingly interested in solar products to reduce their carbon footprint and dependence on increasingly expensive utility bills. Many homeowners' associations and community groups have also installed centralized solar lighting infrastructure to provide environment friendly and cost-effective solutions for outdoor area, parks, and streets. The positive environmental benefits of solar lighting systems are convincing more architects and urban planners to incorporate these systems in their building designs and city development plans.

Many countries have also announced bold climate change action plans with commitments to increase the share of renewables in their total energy mix. Achieving these ambitious renewable energy targets would necessitate scaling up solutions across various application segments including electric vehicles, household appliances as well as general lighting infrastructure. This is expected to drive growth of the solar lighting system market in the coming decade.

Market Driver - Technological Advancements Improving the Efficiency and Cost-Effectiveness of Solar Lighting Systems

Rapid technological progress in the global solar industry has significantly enhanced the technical and economic merits of solar lighting systems over the past decade. Major hardware improvements such as more efficient solar panels and LED bulbs coupled with smart management software have raised the overall productivity and performance of these systems. Latest generation polysilicon panels can achieve efficiencies close to 22% while latest cool white and warm white LEDs offer light quality comparable to traditional lamps at a fraction of the energy consumption.

Furthermore, incorporation of intelligent control circuits and remote monitoring sensors have enabled superior functionality including daylight harvesting, automatic on-off based on motion detection and live performance monitoring over internet.

Additionally, new modular designs, simpler do-it-yourself installation procedures and longer warranties have lowered installation and service costs of solar lighting systems significantly. All these factors are improving the overall value proposition of these systems compared to grid-connected alternatives. This is expected to drive growth of the solar lighting system market in coming years.

Market Challenge - High Initial Installation Costs Deterring Potential Users

One of the key challenges currently faced by the solar lighting system market is the high initial installation costs. While solar lighting systems offer long term savings over traditional grid electricity or kerosene lamps by being free of fuel costs, the upfront capital expenditure required to purchase, install and set up a solar lighting system can be quite high for potential customers.

The installation of solar panels, batteries, lighting fixtures and other components involves substantial material and labor expenses. For low-income consumers in developing regions who have limited access to financing options, coming up with such large lump sums is often not feasible.

Unless innovative financing models are introduced or subsidies are provided to lower the upfront costs, this barrier will continue restricting the growth prospects of the solar lighting system market significantly.

Market Opportunity - Expansion into Emerging Markets with Limited Access to Traditional Electricity Grids

One major opportunity available for the solar lighting system market is the potential for expansion into emerging markets that have limited access to conventional power grids. There are still large populations worldwide residing in rural off-grid communities without reliable electricity access.

Similarly, remote regions in countries like India, Philippines, and Brazil also lack traditional utility infrastructure. The lack of grid electrification in these unelectrified areas opens up a huge customer base for solar lighting products. By tailoring their product offerings and marketing strategies to the requirements of these emerging off-grid communities, companies can gain a first-mover advantage.

Strategic partnerships with NGOs and local distributors can also help companies penetrate new remote markets more effectively. This offers significant scope for solar lighting firms to expand their consumer base and revenues in the solar lighting system market.

Strategy: Focus on product innovation and new product development

Examples: Philips Lighting (now Signify) introduced several new solar LED lighting products in the last 5 years such as the Philips Xitania range. In 2017, they launched the Philips Xitania LED solar-powered flood light which uses a high-capacity lithium-ion battery for backup during nights and bad weather.

Strategy: Pursue strategic acquisitions in new geographies

In 2015, SolarWorld AG acquired the small French solar lighting company Actillum to expand its presence in Europe, Middle East and Africa. Actillum specialized in solar lanterns and home lighting solutions for off-grid rural areas.

Strategy: Partner with NGOs, governments for large-scale rural electrification projects

Example: In India, Greenlight Planet has partnered with NGOs and state governments to install solar home lighting systems across numerous villages. Between 2013-2018, it electrified over 2 million homes through these partnerships.

Insights, By Product: Cost Effectiveness Drives Demand for Solar Street Lights

In terms of product, solar street lights are projected to hold 40.5% share of the solar lighting system market in 2024. It is driven by their cost effectiveness over traditional street lighting systems. Street solar lighting systems have emerged as an attractive alternative to grid-connected street lights which involve high installation and ongoing utility expenses

Additionally, solar street lights eliminate the use of diesel generators typically needed for backup power in areas subject to power outages, further reducing operational expenditures long term. Various governments and municipalities have realized significant savings by retrofitting or new installing solar street light projects.

In Africa, many off-grid communities have opted for solar street lighting to provide illumination without having to expend resources on extending the electricity network to remote villages. The economics favor large scale adoption of solar street lights, contributing to their high share in the solar lighting system market.

Insights, By Application: Residential Demand from Prosumers Boosts Residential Application Segment

In terms of application, the residential segment holds 35.6% share of the solar lighting system market in 2024. This is mainly because more homeowners adopt solar lighting systems for their dwellings. A key factor driving robust residential demand has been the growing prosumer market where homeowners not only consume but also produce their own solar energy.

Moreover, the flexibility to power landscape, outdoor, and security lights independent of any outages in the electricity network provides homeowners with peace of mind. The cost effectiveness of solar lighting eliminates monthly lighting bills. These factors have propelled above average gains for solar lights in the residential segment in the solar lighting system market.

Insights, By Grid Type: Growth of Off-Grid Applications Steers Off-grid Segment

In terms of grid type, the off-grid segment contributes the highest share in the solar lighting system market in 2024. This is due to the vast unaddressed need for distributed lighting solutions in remote populations not serviced by centralized power infrastructure. Plummeting renewable energy technology costs alongside the development of small modular products have enabled solar systems tailored for energy-deprived off-grid markets.

Specifically, single panel LED solar lanterns and homemade lighting kits have brought basic lighting within economic reach of even the poorest populations.

Aid funding supports various applications from household and community lights to solar suitcases for healthcare facilities. This immense potential is driving disproportionately high growth in the off-grid solar lighting segment compared to on and hybrid grid areas.

• Asia Pacific held the largest share in the solar lighting system market in 2023 due to smart city projects and commercial sector growth, especially in China, India, and South Korea.
• The off-grid segment led in 2023, driven by its utility in remote areas with unreliable grid access.
• The highways & roadways application segment is anticipated to grow the fastest due to the benefits of LED solar lighting system for public infrastructure.
• Cost Reduction: Over the past decade, the cost of solar lighting system has decreased by more than 70%, making solar lighting more accessible.
• Environmental Impact: Widespread adoption of solar lighting systems could potentially reduce global CO2 emissions by millions of tons annually.

The major players operating in the solar lighting system market include Philips Lighting (Signify), Solar Electric Power Company (SEPCO), Sunna Design Inc., Sol Inc., VerySol Inc., Solar Street Lights USA, Omega Solar, Dragons Breath Solar, Bajaj Electricals Ltd., SOKOYO Solar Lighting Co., Ltd., Shenzhen Jiawei Solar Lighting, Eaton Corporation, Greenshine New Energy, Yingli Solar, and Array Technologies.

• In May 2024, LONGi launched the Hi-MO 5 Ice-Shield module in North America, setting a new standard for durability against extreme weather while improving energy efficiency. The module is equipped with a 3.2 mm tempered glass layer that can withstand impacts from hailstones up to 55 mm in size, striking at a speed of 33.9 meters per second.
• In April 2024, the Queensland Government announced a major investment in solar panel recycling, marking a significant step in advancing the state's renewable energy sector. The initiative includes nearly $5.5 million in funding aimed at launching a solar panel recycling pilot program across various sites in Queensland.
• In January 2024, Lord's Mark Industries secured a contract to install smart street solar lighting systems in Ayodhya, Uttar Pradesh, as part of the 'Ayodhya Solar City Program.' This project is administered by the Uttar Pradesh New and Renewable Energy Development Agency (UPNEDA).
• In September 2023, Sunna Design secured a significant contract to provide solar lighting systems to rural communities in Africa, specifically in Togo. The contract, valued at €40-45 million, aims to supply and install 50,000 connected solar street lamps in off-grid areas, improving energy access and sustainability.

• By Product
  • Solar Street Lights
  • Solar Garden Lights
  • Solar Flood Lights
  • Solar Spotlights
  • Solar Lamp Posts
• By Application
  • Residential
  • Commercial
  • Industrial
  • Public Infrastructure
• By Grid Type
  • Off-grid
  • Hybrid
  • On-grid