Overview: A Year of Contrasts
The global rooftop solar market in early 2024 presented a mixed picture. While overall solar installations remained robust, the residential sector faced significant headwinds in key markets due to high interest rates and policy shifts, even as other regions and commercial segments saw steady growth.
1. Global Market Trends
Rooftop PV Set to Maintain Significant Share
According to a Rystad Energy analysis, global annual solar PV installations were expected to reach a record 462 GWdc in 2024, a 17% year-on-year increase. Rooftop PV was forecast to account for a substantial portion of this, with nearly 190 GWdc in additions, matching the record levels of 2023. The residential segment was projected to take an increased share within this, at 108 GWdc.
2. Regional Market Highlights
Australia: A World Leader in Rooftop Adoption
Australia added 1.3 GW of rooftop solar capacity in the first half of 2024 alone, bringing the country’s total rooftop PV capacity to 24.4 GW. This came from over 141,000 new systems.
By the end of the year, rooftop solar was powering over 20% of the nation's total electricity demand. The country achieved a record 44% penetration rate for free-standing homes, with South Australia and Queensland reaching approximately 50%. The average residential system size had grown significantly to 10 kW.
The Clean Energy Council noted that rooftop solar has become a staple investment, with typical payback periods of around three to four years.
United States: Residential Segment Faces Headwinds
The U.S. solar industry had a strong overall start, installing 11.8 GWdc in Q1 2024, the second-best quarter on record. Solar accounted for 75% of all new electricity-generating capacity added to the grid.
However, the residential solar market contracted significantly, installing only 1.3 GWdc in Q1 2024—a 25% year-over-year decline and the lowest quarterly volume since Q1 2022.
This downturn was attributed to high interest rates and, most notably, California’s transition to NEM 3.0 (Net Billing Tariff), which dramatically reduced compensation for excess solar exports.
China: Grid Saturation Becomes a Key Challenge
China’s unprecedented rooftop solar boom faced a new challenge: grid capacity. In early 2024, multiple regions across Hubei and Fujian provinces announced they could not absorb more distributed solar generation, adding to a growing list of over 150 locations nationwide that had reached their limit.
This bottleneck forced developers to pause new projects in affected areas, highlighting the critical need for grid modernization and energy storage to sustain rapid growth.
South Korea: New Partnerships to Boost Rooftop Market
In July 2024, Singapore-based Peak Energy signed an MOU with Shinsung E&G and YSP to develop a 50 MW solar rooftop portfolio in South Korea. This initiative was supported by recent government regulatory changes aimed at facilitating solar deployment on available rooftops and helping the country meet its net-zero targets.
3. Policy and Regulatory Trends
Learning from Leading Markets
A report from the Council on Energy, Environment and Water (CEEW) analyzed nine of the world's top rooftop solar markets, offering key takeaways for accelerating adoption:
Diverse Business Models: Programs like Germany’s balcony solar scheme and Australia’s energy cooperatives help unlock new market segments.
Financing & Incentives: Successful mechanisms include Brazil’s low-interest credit for low-income households and the US federal tax credits (ITC).
Streamlined Permitting: Local-level permitting programs, such as the Solar Automated Permit Processing (SolarAPP+) in the US, can significantly reduce processing times.
Consumer Protection: Vendor rating programs, used in India and Australia, help consumers identify high-quality installers.
Germany’s Tenant Electricity and Balcony Solar Models
The CEEW report highlighted Germany’s innovative "tenant electricity" model, which allows apartment dwellers to benefit from solar power, and the country's rapidly growing "balcony solar" scheme, which makes solar accessible to renters and small households.
4. Technology & Market Drivers
Growing System Sizes
A clear trend was the increasing size of residential systems. Australia saw average system sizes grow to 10 kW, a significant jump from just 3 kW a decade earlier, reflecting changing consumer behavior and a desire to power more of the home, often in combination with batteries.
Energy Storage: The "Missing Piece"
While solar adoption surged, battery storage uptake lagged behind the levels needed to maximize the value of rooftop systems. In Australia, for example, while nearly 30,000 home batteries were sold in the first half of 2024, industry experts called storage the "missing piece of the puzzle" to enable households to use solar savings during non-sunny hours.
Early 2024 Trend Summary
