Global floating solar market soars: Asia-pacific leads the way as demand surpasses 6GW threshold by 2031—says Wood Mackenzie

The global floating solar market is expected to pass the six-gigawatt (GW) threshold by 2031, as PV developers struggle to meet growing solar demand and look to alternate development technologies.

Wood Mackenzie
Wood Mackenzie, also known as WoodMac, is a global research and consultancy group. In 2015, the company was acquired by Verisk Analytics, an American data analytics and risk assessment firm.

Massachusetts — In a promising development for the renewable energy sector, the global floating solar market is projected to exceed the six-gigawatt (GW) mark by 2031.

The increasing demand for solar energy and the challenges faced by photovoltaic (PV) developers in meeting this demand has prompted a shift toward alternative development technologies.

At the SNEC PV Pow er Expo in Shanghai, Ting Yu, a consultant at Wood Mackenzie, highlighted the struggle faced by the global solar industry, including PV developers, in finding sufficient land for ground-mount solar projects. Limited land availability and rising land costs have consequently fueled the demand for floating installations.

Floating solar is expected to maintain a steady market share in relation to the overall global solar demand. The compounded annual growth rate (CAGR) for floating solar (FPV) is projected to rise by 15% over the next decade. By 2031, 15 countries are forecasted to have cumulative FPV installations exceeding 500 megawatts (MW), with Indonesia, India, and China accounting for nearly 70% of the total FPV demand in 2022.

Despite higher development costs for FPVs compared to ground-mount projects, increased competitiveness in the developer and engineering, procurement, and construction (EPC) landscape has contributed to cost reductions in the sector.

Asia-Pacific Leads the Way in Floating Solar Demand

The Asia-Pacific region continues to be at the forefront of the floating solar market, with approximately 3GW of floating solar projects in 2022, capturing over 90% of the floating solar demand that year. Countries such as China, Indonesia, India, South Korea, and Thailand are actively developing multiple floating solar projects, as per the analysis by Wood Mackenzie.

China, in particular, is poised to maintain its leadership in floating solar installations. The country has leveraged decommissioned flooded coal mines to develop floating solar projects. China’s cumulative floating solar capacity is projected to surpass 13GW by 2031, with a 12% CAGR over the next decade.

Europe Emerges as the Second Largest Region for FPV Demand

Europe has emerged as the second largest region for floating solar demand, with nearly 150MW of capacity. The Netherlands leads the region, followed by France, in adopting the technology due to the enforcement of multiple land use in various European regions.

The Netherlands boasts the largest floating solar project outside the Asia-Pacific region, accounting for 32% of Europe’s FPV market in 2022. The successful launch of the Sellingen floating solar park (41.4MW) in 2021 exemplifies the continuous growth of project sizes in Europe’s leading market.

While Europe’s floating solar market is still relatively small, the trend is positive, and larger floating PV plants are expected in the near future. However, after 2025, growth is expected to slow as the primary sites for development will have already been utilized. Furthermore, grid constraints and higher levelized cost of energy (LCOE) for larger plants make the technology less competitive compared to rooftop PV.

FPV Experiences Growth in the United States

In the United States, the floating solar market is estimated to experience a CAGR of approximately 13% over the next decade. Development efforts in regions with high solar demand but expensive land costs, such as California, Florida, and New Jersey, are driving the growth of floating solar projects.

The floating solar industry as a whole faced high costs across all market segments in 2022 due to supply chain constraints, leading to increased component and soft costs. For example, the price surge of High-Density Poly Ethylene caused by the pandemic was a significant factor behind the high system balance of system (SBOS) costs for

FPVs. However, it is expected that costs will decrease as the supply chain expands.

In conclusion, the global floating solar market is poised to surpass the six-gigawatt threshold by 2031. With the Asia-Pacific region leading the demand and China spearheading installations, floating solar presents a viable solution to the challenges posed by land availability and costs. As the industry grows and technologies mature, floating solar is set to play a significant role in meeting the world’s increasing solar energy requirements.

Derick Lila
Derick is a Clark University graduate—and Fulbright alumni with a Master's Degree in Environmental Science, and Policy. He has over a decade of solar industry research, marketing, and content strategy experience.

LG and Hyundai establish a battery cell manufacturing joint venture to support the production of 300,000 electric vehicles annually

Previous article

Canada-based software company—PowerHub announces New Community Solar Solution with Invoicing and Subscriber Management

Next article

You may also like


Leave a reply

More in News