Solar Encapsulant Market Boom Led by Asia-Pacific (APAC) Countries

China has been constantly increasing its photovoltaic (PV) or solar panel production capacity; in 21016, it reached 48 gigawatts (GW), which is further predicted to grow to 110 GW by 2020, as per the China Photovoltaic Industry Association (CPIA). Other countries are also taking such steps to reduce the dependence on fossil fuels, such as crude oil and coal, for electricity generation, as their burning releases harmful gases into the atmosphere, which cause air pollution. One of the components of PV panels is a solar encapsulant, which helps in joining the PV cellsto the glass layers above and below.

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Owing to the rising demand for PV panels, the solar encapsulant market is expected to grow to $4,555.4 million in 2023, from $1,036.0 million in 2017, which amounts to a 28.4% CAGR of between 2018 and 2023. Apart from adhesion, the encapsulants also provide the solar modules with electrical and optical transmissivity and protection from dust, moisture, physical stress, delamination, and corrosion. Encapsulants are made from polyvinyl butyral (PVB), ethylene vinyl acetate (EVA), polyolefin elastomer, and several other materials, such as polydimethylsiloxane (PDMS), thermoplastic polyurethane (TPU), and ionomers.

During 2013–2017, the ones made from EVA were the most in demand across the world. This is because EVA has several advantages, including great adhesive strength, excellent toughness and elasticity, and appreciable resistance to delamination and corrosion. This is why it would still be the most widely used material in the manufacturing of solar encapsulants till 2023. During the forecast period, the preference for PVB would rise the fastest for encapsulant production, as it leads to less material consumption and better durability and lamination yield.

Crystalline and thin-film are the two technologies on which such products are based. During the historical period, the crystalline technology was preferred as it provides high energy efficiency and stability, long-term performance, excellent durability, high consistency, and quicker conversion of sunlight into electricity. In the coming years, the thin-film technology is expected to garner rapid popularity, owing to its cost benefits, especially for large-scale PV panel manufacturing. Another advantage of this technology over the other is that it makes the modules flexible, whereas the former makes them fragile.

Across the world, the awareness about the PV technology and its use for generating clean energy is rising. This, coupled with the continuously reducing cost of solar panels and the several financial incentives offered by the governments of various countries on their installation, are driving their usage. Several nations have already targeted the replacement of a substantial part of their electricity generation from fossil fuels by solar energy, which is helping increase the sale of PV modules, and in turn, solar encapsulants.

Asia-Pacific (APAC) currently stands as the largest user of solar encapsulants, owing to the rising production of PV modules. In 2017, solar modules with a cumulate energy generation capacity of 70.3 GW, were produced across the world, out of which 31% of the production took place in China alone. During the forecast period, China, along with Japan and India, would be among the fastest growing users of solar encapsulants. Other than these, the solar encapsulant market in the U.K. and several other Western countries would also observe significant growth.

Hence, with the increasing demand for electricity and strong focus on producing it from renewable sources, the demand for solar encapsulants would also rise.