Solar EPC Market Projected to Surge to $1.2 Trillion by 2034

The global market for Solar Engineering, Procurement, and Construction (EPC) services is on track to grow significantly, reaching an estimated $1.2 trillion by 2034. This projection, outlined in a recent report by Allied Market Research, marks a substantial increase from its current valuation of $0.4 trillion in 2024. The anticipated growth reflects a Compound Annual Growth Rate (CAGR) of 11.9 percent from 2025 to 2034, highlighting the solar sector’s critical role in the global transition to renewable energy.

The Solar EPC market encompasses comprehensive services for solar project development, ranging from initial planning to construction and operation. As countries commit to ambitious climate goals, including national net-zero targets, the demand for clean energy solutions is accelerating. Government incentives and subsidies, particularly in nations like India, contribute to reducing financial barriers for solar projects, according to the report.

Key Drivers of Growth

Several factors are propelling the solar EPC market forward. First, advancements in technology, particularly improvements in solar panel efficiency and declining module costs, are making large-scale solar installations increasingly viable. These developments enhance the competitiveness of solar energy compared to traditional power sources.

Regionally, the Asia-Pacific market is expected to maintain its leadership, with a projected CAGR of 12.3 percent during the forecast period. Major economies such as China, India, Japan, and Australia are implementing strong policy frameworks that support renewable energy growth. In India, states like Rajasthan and Gujarat are emerging as significant contributors to the country’s solar capacity, showcasing the impact of local policies on national energy goals.

Despite the positive outlook, the Solar EPC market faces challenges, particularly concerning regulatory and policy stability. The report identifies “regulatory uncertainty and policy inconsistencies” as a significant barrier, noting that sudden changes in subsidies, import duties, or land acquisition processes can disrupt project timelines and increase execution costs.

Addressing Industry Vulnerabilities

The solar supply chain also presents vulnerabilities, as dependence on imports from a limited number of countries for critical components, especially photovoltaic modules, poses risks. To achieve the projected growth, the industry must address these supply chain challenges alongside a global shortage of skilled labor essential for project execution.

The report emphasizes that the reliance on specialized EPC services will continue to expand as solar projects grow larger and more complex. These services provide essential turnkey solutions for system design, component procurement, and installation, solidifying the EPC market’s vital role in shaping the future energy landscape.

As the solar energy sector matures, its increasing significance in the global energy transition reflects a broader commitment to sustainable practices. The anticipated growth in the Solar EPC market underscores the ongoing shift towards renewable energy sources and the vital role that technology and policy play in this transformation.