PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1638713
PUBLISHER: Market Xcel - Markets and Data | PRODUCT CODE: 1638713
Global agrivoltaics market is projected to witness a CAGR of 11.23% during the forecast period 2025-2032, growing from USD 5.01 billion in 2024 to USD 11.73 billion in 2032.
The global agrivoltaics market is experiencing growth due to its ability to address pressing challenges such as land scarcity, food and energy demand, climate change, and water conservation. The rise in government policies, coupled with technological advancements, is fueling the demand for agrivoltaics. Furthermore, the integration of solar energy with agriculture reduces carbon emissions by decreasing dependence on fossil fuels for both energy and farming machinery, which supports a trend of continual market expansion.
Agrivoltaics offers multiple benefits, such as enhancing crop yields through microclimate regulation, reducing water evaporation, and providing protection against extreme weather conditions. It also lowers energy consumption costs, which is beneficial for farmers, and further boosts the demand for solar power in irrigation, refrigeration, and other essential farm operations.
Moreover, technological advancements such as semi-transparent and bifacial solar panels have improved overall system efficiency and adaptability, facilitating adoption across diverse climates and crops. Government incentives and policies also promote renewable energy integration, propelling market growth through subsidies and financing mechanisms that accelerate implementation in regions like Europe, Asia-Pacific, and North America.
The market expansion is further fueled by increasing energy and food demands. Agrivoltaics can be a viable option to address the dual needs of food security and sustainability while contributing to decarbonization. This approach offers a sustainable solution for the future. As awareness and investment grow, agrivoltaics will become essential for integrating agriculture and renewable energy.
For instance, in October 2024, Voltalia announced that its subsidiary Helexia had acquired 28 megawatts of agricultural photovoltaic hangars in France and 202 solar roofs on farm buildings. All of these roofs are operational and benefit from 20-year electricity sales contracts.
Dual Land Use Solutions Driving Growth in the Agrivoltaics Market Share
The demand for agrivoltaics is significantly driven by its ability to address the challenges of dual land use and land scarcity. As the global population continues to rise and urbanization accelerates, the pressure on land resources intensifies, necessitating a balance between agricultural production and renewable energy development. Agrivoltaics systems optimize land use by integrating solar energy production with farming, making it an innovative solution for sustainable development.
By enabling dual land use, agrivoltaics can improve land-use efficiency by up to 60% compared to traditional separate solar installations and agricultural fields. This dual-use approach is particularly valuable in land-constrained regions such as Europe and densely populated countries like India and China.
Moreover, agrivoltaics allows farmers to monetize underutilized or marginal lands, making it a viable strategy for areas facing land degradation or limited arable land. In arid and semi-arid regions, solar panels create shaded microclimates that reduce heat stress on crops and minimize water evaporation, ultimately boosting land productivity. As global energy and food demands rise, the dual land-use capability of agrivoltaics positions it as a vital solution to land scarcity while supporting sustainable agricultural and energy practices.
For instance, in September 2023, Lightstar Renewables commenced development of the Old Myers solar project, New York's first agrivoltaics dual-use solar farm located in Wappingers Falls. This initiative represents a significant advancement in integrating agriculture with renewable energy. The Old Myers project features a 2 MW community solar installation covering 15 acres, allowing for agricultural production alongside energy generation.
Government Support is Propelling Growth in the Agrivoltaics Market
Government policies and subsidies play a crucial role in accelerating the growth of the global agrivoltaics market by providing financial incentives, regulatory support, and a framework for adoption. This measure addresses the installation costs of agrivoltaics systems and encourages their integration into existing agricultural practices.
In the European Union, the Common Agricultural Policy (CAP) promotes dual-use land projects. Under this policy subsidies are provided for renewable energy initiatives that maintain or enhance agricultural productivity. For example, France has implemented specific guidelines to support agrivoltaics which prioritize systems that balance energy generation with crop or live-stock productivity.
Similarly, in India, the PM-KUSUM scheme helps in the expansion of agrivoltaics. The scheme provides subsidies which cover up to 60% of the installation cost which encourage farmers to adopt solar-powered irrigation systems and agrivoltaics projects. The scheme has increased solar energy adoption on farmland which further reduces energy costs for farmers while enhancing sustainability.
Moreover, the United States offers federal tax credits such as the Investment Tax Credit (ITC), which covers a percentage of the cost of renewable energy systems, including agrivoltaics. States like Illinois have launched initiatives like the Shines program, which supports dual-use solar farms that integrate with agricultural operations.
These policies not only lower financial barriers but also provide technical assistance and research funding to improve agrivoltaics technologies. As global food and energy demand rises, government-backed subsidies and supportive policies will ensure that agrivoltaics is a viable solution for sustainable energy and agricultural productivity.
For instance, in August 2024, RWE officially opened an innovative agrivoltaics (Agri-PV) demonstration plant in Bedburg, which combines green electricity generation with agricultural crop production. The plant features around 6,100 solar modules with a peak capacity of 3.2 megawatts, enough to supply electricity for approximately 1,044 German homes. Since its launch earlier this year, the site has also begun planting crops.
Dominance of Fixed Solar Panels in Agrivoltaics Market Share
Fixed solar panels have cemented their dominance with strong statistics in the market due to their cost-effectiveness and compatibility with agricultural operations. The fixed solar panel system consists of a stationary solar panel mounted at a fixed angle that offers several advantages for agricultural integration. Unlike dynamic systems which are needed to adjust for tracking sunlight. The fixed system is less complex and further helps in reducing installation, operational and maintenance costs. This simplicity makes fixed solar panels a preferred choice for farmers and developers seeking efficient and low-cost solutions.
Moreover, fixed solar panels are highly adaptable to various farming practices including arable farming, horticulture and grazing. Their stationary nature enables minimal disruption to agricultural activities which allows crops and livestock to coexist with energy production effectively. Additionally, the shading provided by fixed panels helps reduce water evaporation and further protect crops from extreme weather, enhancing their demand.
Furthermore, their widespread adoption is driven by practicality and accessibility, especially in regions with high solar irradiance where fixed panels can reliably generate significant energy without requiring advanced tracking technologies. This cost-efficiency and ease of integration ensure that fixed solar panels systems remain the leading option for agrivoltaics projects globally.
For instance, in October 2023, BayWa r.e. secured USD 6.9 million in funding from the European Union to develop six agri-voltaic projects in five countries by 2027. BayWa r.e. will carry out three of the six projects in France, Spain, and the Netherlands as part of the EU LIFE ADAPT-PV program.
North America Dominates Agrivoltaics Market Share
North America is establishing itself as a leader in agrivoltaics, driven by advanced technological capabilities, abundant agricultural land, and strong policy support for renewable energy. Significant investments in innovative agricultural and solar technologies have facilitated the integration of agrivoltaics systems, particularly in countries like the United States and Canada.
The region boasts advanced farming equipment, which plays a crucial role in the seamless adoption of agrivoltaics technology. North America's agricultural sector has embraced precision farming and other modern techniques, making it easier to integrate solar panels with crop production. This integration is further enhanced by developing efficient irrigation systems, shading techniques, and optimized land-use strategies that improve energy efficiency and agricultural yields.
Policy incentives and subsidies are vital to North America's agrivoltaics success. Federal and state-level programs in the United States encourage installing solar panels on agricultural lands, offering tax benefits and funding for research and development in agrivoltaics. These incentives have spurred private sector involvement, leading to large-scale projects that capitalize on this dual-use approach.
Moreover, North America's commitment to sustainability and climate change mitigation aligns well with agrivoltaics. By combining energy generation with agriculture, the region not only reduces greenhouse gas emissions but also enhances rural economic development. The dual benefits of improving farm profitability while increasing renewable energy capacity position North America as a leader in this field.
For instance, in December 2023, U.S. solar company iSun, Inc., in collaboration with German agrivoltaics pioneer Next2Sun Mounting GmbH, will develop a vertical agrivoltaics system in Vermont. This project will take place on a 3.7-acre site and utilize 69 vertical rack elements, each equipped with two bifacial solar panels. This innovative system is designed to optimize solar power production during low sunlight while preserving valuable agricultural land.
Future Market Scenario (2025 - 2032F)
Globally, governments are implementing policies and incentives to promote renewable energy, including agrivoltaics, which is expected to drive market growth.
Agrivoltaics offers dual benefits of increased agricultural output and additional income from energy generation, making it an appealing option for farmers facing economic pressures.
Continuous improvements in solar technology and farming techniques are enhancing the viability and efficiency of agrivoltaics systems, making them more attractive to farmers and investors.
As land availability becomes a critical issue, agrivoltaics offers a solution for densely populated or agriculturally rice areas. Countries like Japan and India are exploring agrivoltaics to maximize land utilities, boosting the global demand for agrivoltaics.
Key Players Landscape and Outlook
Continuous innovation characterizes the landscape of agrivoltaics market globally, as the companies compete to outperform one another in terms of innovative technologies, energy efficiency, and diversified product offerings. The market prognosis remains positive, owing to increased demand for addressing climate challenges, and dual benefits for farmers. Agrivoltaics manufacturers are concerned with technological advancements, energy efficiency, and environmental practices, which will likely define the industry's future. Collaborations and developing technologies are projected to increase competition in this fast-paced market.
For instance, in June 2024, Soltec has recently announced a strategic partnership with TSE to launch agrivoltaics in France. This collaboration aims to co-develop agrivoltaic products tailored specifically for the French market, leveraging Soltec's advanced solar tracking technology and TSE's expertise in agrivoltaic systems. The partnership will enhance the efficiency of agricultural operations by optimizing energy production while addressing the needs of French farmers.
All segments will be provided for all regions and countries covered
Companies mentioned above DO NOT hold any order as per market share and can be changed as per information available during research work.