The Concentrated Solar Power market is estimated to be valued at US$ 5.29 Bn in 2023 and is expected to exhibit a CAGR of 10.8% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview
Concentrated Solar Power (CSP) is a source of renewable energy that utilizes mirrors or lenses to concentrate sunlight and convert it into heat energy which can then run thermal power systems. There are various types of CSP technologies that include parabolic troughs, solar towers, Fresnel reflectors and dish/engine systems. CSP can be used to power homes, businesses and utilities and can also be combined with thermal energy storage to generate electricity even when the sun is not shining. CSP is increasingly being adopted as a viable renewable energy source suitable for large scale generation of electricity.
Market Dynamics
The growth of the Concentrated Solar Power market is driven by increasing investment towards renewable energy sources and favorable government policies and regulation supporting solar power adoption. According to the International Renewable Energy Agency, over $300 billion was invested globally into renewable energy sources in 2020. Government initiatives promoting solar energy generation include tax incentives, Renewable Portfolio Standards and feed-in tariffs. For instance, in the US, federal Investment Tax Credit provides tax credits amounting to 30% of the installation cost of commercial solar systems. Rising concerns over climate change has also boosted investments in zero carbon emission energy sources.
Additionally, continuous technological advancements aimed at improving the efficiency and lowering the costs of CSP systems is also contributing to the market growth. Developments focus on enhancing components like solar receivers, heat transfer fluids and thermal energy storage solutions to improve overall performance and competiveness of CSP plants. Declining costs have made CSP more competitive compared to fossil fuel power generation over the long run. Improved energy yields from new large scale utility CSP projects will further support the market expansion during the forecast period.
SWOT Analysis
Strength: Concentrated Solar Power (CSP) has a major strength in its ability to store solar energy for use when the sun is not shining. CSP systems use thermal energy storage systems to store heat in molten salt tanks or other mediums even after sunset. This gives CSP a major advantage over other renewable sources like solar PV. CSP also has comparatively lower installation and maintenance costs compared to other renewable technologies. Further, CSP systems have a lifespan of around 25-30 years.
Weakness: High initial capital costs remain one of the major weaknesses of CSP technology. Setting up a large-scale CSP plant requires massive investments which impacts its affordability. Dependence on direct sunlight is another limitation as CSP systems do not generate power after sunset or on cloudy days.
Opportunity: Increasing global focus on reducing carbon emissions and transitioning to cleaner sources of energy presents a major growth opportunity for CSP. Many countries have announced targets to increase the share of renewable sources in their energy mix, driving investments in CSP. Further, falling battery costs are allowing for cheaper energy storage solutions to make CSP more competitive.
Threats: Subsidy cuts and policy uncertainties in key markets pose major threats. Established fossil fuel industry lobbying also creates regulatory roadblocks for renewables like CSP. Intermittency remains a challenge though energy storage helps address this to an extent.
Key Takeaways:
The global Concentrated Solar Power market is expected to witness high growth, exhibiting CAGR of 10.8% over the forecast period, due to increasing global demand for renewable energy sources. Rising environmental concerns and stringent regulations aimed at curbing carbon emissions have prompted many countries and states to increase the share of solar and other clean energy sources in their overall power generation mix. This growing policy push for solar is driving investments in CSP technology.
Regional analysis: Europe currently dominates the global CSP market with countries like Spain, Italy, and Portugal serving a major demand. However, the Asia Pacific region is emerging as the fastest growing regional market with China spearheading installations and capacity addition. Developing nations across the Middle East and Africa are also increasingly adopting CSP to meet their rising energy demands through indigenous solar resources.
Key players operating in the Concentrated Solar Power market are Siemens AG, Genarl Electric, Abengoa, Acciona S.A., Atlantica Yield plc., Suntrace GmbH, BrightSource Energy, Inc., SolarReserve, LLC., ACWA Power, Frenell GmbH.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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