Solar Encapsulation Film Market Summary
Introduction
Solar encapsulation film represents the comprehensive category of polymer-based protective materials used in photovoltaic module manufacturing, encompassing multiple film technologies that protect solar cells from environmental damage while maintaining optimal optical and electrical performance. These films constitute critical auxiliary materials determining module durability, reliability, and operational lifespan across diverse installation environments and climatic conditions. High-performance encapsulation films must balance multiple requirements including excellent optical transparency maximizing solar cell light absorption, superior adhesive properties bonding to glass and backsheet substrates, effective moisture barrier protection preventing water vapor ingress, robust ultraviolet resistance maintaining performance through prolonged outdoor exposure, appropriate thermal stability accommodating manufacturing lamination processes and operational temperature ranges, and reliable electrical insulation preventing short circuits and ensuring safety.
The solar encapsulation film industry encompasses diverse product types addressing varied module technologies and application requirements. Transparent EVA film maintains dominant market position through proven field reliability, cost-effectiveness, and established manufacturing infrastructure. White EVA film provides enhanced reflectivity improving module power output particularly in bifacial applications. POE film delivers superior moisture resistance and thermal stability essential for advanced module technologies including bifacial dual-glass modules and N-type solar cells. Co-extruded EPE film combines EVA and POE properties through multilayer structures optimizing performance and cost. Alternative technologies including PDMS/silicone film, PVB film, and TPU film serve specialized applications with specific performance requirements. Encapsulation film costs account for 4%-7% of total photovoltaic module costs, though material selection significantly impacts long-term module performance, warranty claims, and customer satisfaction.
Average film consumption for new photovoltaic installations ranges from 10-13 million square meters per GW of installed capacity, creating direct correlation between global solar capacity additions and encapsulation film demand. With 451.9 GW of solar photovoltaic capacity added globally in 2024 and continued strong installation growth projected through the forecast period, encapsulation film market demonstrates robust expansion trajectory driven by renewable energy adoption, technology advancement, and increasing quality consciousness among module manufacturers and end customers.

Market Size and Growth Forecast
The global solar encapsulation film market is projected to reach 5.0-6.0 billion USD by 2026, with an estimated compound annual growth rate of 7%-9% through 2031. This strong growth reflects accelerating global photovoltaic capacity expansion, advancing module technologies requiring sophisticated encapsulation materials, increasing emphasis on long-term module reliability and warranty performance, and growing recognition of encapsulation film quality as critical differentiator in competitive module markets. Global solar photovoltaic capacity reached 1,865 GW at the end of 2024, with 451.9 GW of new capacity added during the year. Asia added 327.1 GW of solar capacity in 2024, with China contributing 278.0 GW and India adding 24.5 GW. Outside Asia, United States added 38.3 GW, Brazil added 15.2 GW, and Germany added 15.1 GW of solar capacity in 2024. Industry projections anticipate global solar installations of approximately 583 GW in 2025, 680 GW in 2026, and 813 GW in 2027, supporting sustained encapsulation film demand growth.

Regional Analysis
Asia Pacific dominates the solar encapsulation film market with estimated growth rates of 7.5%-9.5%, driven by overwhelming manufacturing capacity concentration and substantial installation growth. China accounts for over 90% of global solar encapsulation film production capacity, demonstrating unparalleled scale advantages, comprehensive manufacturing infrastructure, and technology leadership. At the end of 2023, global polysilicon, silicon wafer, solar cell, and photovoltaic module effective production capacity reached 2.458 million tons/year, 974.2 GW, 1,032.0 GW, and 1,103.0 GW respectively, with China accounting for 93.6%, 97.9%, 90.1%, and 83.4% of respective capacities. Actual 2023 production reached 2.458 million tons of polysilicon, 974.2 GW of silicon wafers, 1,032.0 GW of solar cells, and 1,103.0 GW of photovoltaic modules, with China representing 91.5%, 98.1%, 91.9%, and 84.6% respectively. During 2024, China maintained global leadership with production of 1.82 million tons of polysilicon, 753 GW of silicon wafers, 654 GW of solar cells, and 588 GW of photovoltaic modules, demonstrating year-over-year growth of 23.6%, 12.7%, 10.6%, and 13.5% respectively. This massive manufacturing scale creates enormous domestic encapsulation film demand while establishing Chinese manufacturers as dominant global suppliers. Leading Chinese encapsulation film companies including Hangzhou First Applied Material, Jiangsu Sveck, Shanghai HIUV, Changzhou Betterial, and Zhejiang Sinopont collectively supply over 75% of global encapsulation film volume, demonstrating substantial industry concentration and competitive advantages. India demonstrates rapid growth with 24.5 GW of solar capacity added in 2024, supporting expanding domestic module manufacturing and creating growing encapsulation film demand. South Korea added 3.1 GW of solar capacity in 2024, maintaining regional market presence.
North America exhibits growth rates of 6.5%-8.5%, with United States representing primary regional market. The United States added 38.3 GW of solar capacity in 2024, marking 54.0% increase over 2023 levels and demonstrating strong momentum in solar adoption. Growing domestic module manufacturing investment driven by supply chain security objectives, government incentive programs, and local content requirements creates opportunities for encapsulation film production localization. Major module manufacturers establishing United States production facilities increasingly seek domestic or near-shore encapsulation film supply reducing import dependence and supporting responsive customer service. Encapsulation film manufacturers are evaluating United States manufacturing investment to serve growing domestic demand and capture potential trade policy advantages.
Europe demonstrates growth rates of 6.0%-8.0%, with Germany adding 15.1 GW of solar capacity in 2024 and maintaining regional leadership in solar adoption and technology development. European market emphasizes high-quality materials, sustainable manufacturing practices, and stringent performance standards creating demand for premium encapsulation films. Regional module manufacturing expansion efforts driven by supply chain diversification and strategic independence objectives present opportunities for encapsulation film suppliers establishing European production capabilities and supply relationships.
South America shows growth rates of 7.0%-9.0%, with Brazil representing primary regional market adding 15.2 GW of solar capacity in 2024. Accelerating solar adoption driven by favorable solar resources, declining system costs, supportive renewable energy policies, and growing electricity demand creates expanding encapsulation film market. Regional manufacturing capabilities remain limited, with consumption primarily served through imports from Asia Pacific production centers. Growing module production in the region may support future encapsulation film manufacturing investment.
The Middle East and Africa region exhibits growth rates of 6.5%-8.5%, with expanding solar photovoltaic projects driven by abundant solar resources, renewable energy commitments, and diversification from fossil fuel dependence. Regional encapsulation film consumption remains modest compared to other regions though growth trajectory shows promise as solar adoption accelerates.

Type Analysis
EVA Film maintains dominant position with transparent EVA accounting for approximately 42.5% of total encapsulation material market share in 2023. EVA film demonstrates multiple advantages supporting continued market leadership including proven reliability through decades of successful field deployment, excellent cost-effectiveness enabling competitive module pricing, superior adhesive properties ensuring robust bonding to glass and backsheet materials, good optical transmission maximizing solar cell light absorption, established manufacturing processes supporting high-volume production, and readily available raw materials with improving domestic supply security. Standard transparent EVA serves conventional single-glass modules and established applications. White EVA film provides enhanced reflectivity improving module power output particularly in bifacial configurations, increasing photon capture and energy yield. Anti-PID EVA formulations address potential-induced degradation concerns affecting certain module configurations and installation conditions. EVA film manufacturing processes involve granulation of EVA resin with additives including crosslinking agents, coupling agents, antioxidants, and light stabilizers, followed by mixing, extrusion, and cutting operations producing finished film products. Raw material costs comprising approximately 90% of total production expenses focus manufacturer attention on resin procurement, formulation optimization, and process efficiency.
POE Film demonstrates rapid growth trajectory with 13.2% market share in 2023, projected to increase substantially as advanced module technologies gain adoption. POE offers superior performance characteristics essential for demanding applications including significantly higher volume resistivity than EVA particularly at elevated temperatures, dramatically lower water vapor transmission rate approximately one-tenth of EVA material protecting modules from moisture ingress, superior ultraviolet resistance and anti-yellowing properties extending module lifespan, and excellent thermal stability maintaining performance in harsh environments. POE film demonstrates particular advantages for bifacial dual-glass modules where enhanced moisture barrier prevents internal corrosion from acetic acid accumulation that can degrade EVA-encapsulated modules. N-type solar cells including TOPCon and HJT technologies benefit from POE's superior moisture and thermal protection ensuring long-term reliability and warranty performance. Global POE resin production capacity approaches 3 million tons annually, concentrated among major international chemical companies including Dow, ExxonMobil, Borealis, Mitsui Chemicals, LG, SKC, and SABIC. High POE resin costs and import dependence constrain broader market adoption, though multiple Chinese chemical companies are developing domestic POE production capabilities potentially improving supply availability and cost competitiveness. Wanhua Chemical leads domestic POE development with 200,000-ton facility expected to commence production, while Maoming Petrochemical, Sierbang, Satellite Petrochemical, and others pursue POE projects accelerating localization timeline.
EPE Film represents co-extruded composite structure accounting for 27.8% of encapsulation material market share in 2023. EPE film combines high water resistance of POE with strong adhesion properties of EVA through multilayer construction, delivering optimized performance for demanding applications including dual-glass bifacial modules and N-type solar cells. EPE production utilizes co-extrusion technology enabling cost-effective manufacturing while providing superior combined properties compared to single-material films. EPE adoption increases as module technologies advance and performance requirements intensify, representing important development direction balancing cost and performance considerations. Combined POE and EPE market share projected to exceed 52% by 2025, reflecting structural shift toward advanced encapsulation materials.
Others encompass alternative encapsulation films including PDMS/silicone film, PVB film, and TPU film serving specialized applications. These materials address specific requirements including extreme temperature cycling resistance, enhanced flexibility for novel form factors, and specialty optical properties, though combined market share remains limited.

Key Market Players
Hangzhou First Applied Material Co. Ltd. maintains commanding global market leadership with approximately 50% market share for photovoltaic encapsulation film products. The company operates multiple large-scale production facilities across China providing substantial manufacturing capacity, comprehensive product portfolio spanning EVA, POE, and EPE technologies, technology expertise supporting customer application development, and extensive relationships with major module manufacturers worldwide. Hangzhou First Applied demonstrates consistent market leadership through scale advantages, technology innovation, quality reliability, and customer service excellence.
Jiangsu Sveck Photovoltaic New Material Co. Ltd. operates as second-tier market leader with market share exceeding 10%. The company focuses on advanced materials including anti-PID EVA, white EVA film, white EPE, POE, EPE, and specialty products supporting evolving module technologies. Jiangsu Sveck operates four production bases in Changzhou, Suqian, Yancheng, and Yiwu providing geographic diversification and manufacturing flexibility.
Shanghai HIUV New Material Co. Ltd. maintains second-tier position with market share exceeding 10%. The company specializes in innovative thin film materials with strong research and development capabilities developing advanced formulations for emerging module technologies.
Changzhou Betterial Film Technologies Co. Ltd. achieved third position ranking in 2024 despite challenging market conditions affecting industry profitability. Zhejiang Sinopont Technology Co. Ltd. ranks fourth position alongside Shanghai HIUV. The top five manufacturers collectively supply over 75% of global encapsulation film volume, demonstrating significant industry concentration.
Mitsui Chemicals represents major international supplier with particular strength in POE technologies and Japanese market presence. SKC and Hanwha operate as Korean manufacturers with materials expertise and domestic photovoltaic industry relationships. 3M provides specialty materials serving specific applications. Guangzhou Lushan New Materials Co. Ltd., Tianyang New Materials (Shanghai) Technology Co. Ltd., Cybrid Technologies Inc., and Crown Advanced Material Co. Ltd. represent additional Chinese manufacturers contributing to competitive market structure. Specialized Technology Resources (STR) announced dissolution on September 14, 2023, removing one participant from competitive landscape.

Industry Value Chain Analysis
The solar encapsulation film value chain spans from petrochemical raw material production through film manufacturing to photovoltaic module assembly integration. Upstream raw material supply constitutes critical foundation, with EVA and POE resin production requiring substantial scale, technology capability, and capital investment. EVA resin serves dual primary consumption markets spanning photovoltaic and foaming applications. Chinese photovoltaic-grade EVA resin production reached 1.04 million tons in 2022, with industry concentration ratio for top four producers at 76.9%. Planned capacity additions from 2023-2025 include 3.1 million tons of total EVA capacity expansion with 1.45 million tons designated for photovoltaic-grade material, promising to improve supply security and reduce import dependence though timing and ramp progression create near-term uncertainty. POE resin production remains dominated by international chemical companies, creating import dependence and supply constraints for Chinese encapsulation film manufacturers. Multiple domestic companies pursue POE technology development and production capacity investment, with Wanhua Chemical advancing fastest toward commercial production though overall domestic POE capacity expansion requires extended timeline before achieving supply security.
Film manufacturing processes encompass granulation processing raw resin with functional additives, mixing operations achieving homogeneous formulations, extrusion forming continuous film through controlled temperature and pressure conditions, and cutting and winding producing finished products meeting customer specifications. EVA and POE film manufacturing processes demonstrate similarity in equipment and basic procedures, with primary differences relating to formulation composition and processing parameter optimization specific to material properties. Manufacturing operations require precise process control maintaining consistent film characteristics, comprehensive quality testing verifying optical transmission, adhesive strength, mechanical properties, and contamination levels, and clean production environments preventing particulate contamination affecting module reliability.
Distribution primarily involves direct supply relationships between film manufacturers and module producers, with large-scale customers establishing long-term agreements ensuring material availability, quality consistency, and price stability. Technical collaboration between film suppliers and module manufacturers supports application development, process optimization, and new product commercialization. Prior to 2024, encapsulation film manufacturers concentrated facilities in Southeast Asian countries including Vietnam, Thailand, and Malaysia benefiting from proximity to module manufacturing clusters and favorable trade conditions. During 2024, Southeast Asian trade policy changes and United States domestic module manufacturing growth drove encapsulation film producers to pursue geographic diversification, with primary expansion focus on Indonesia, Turkey, and United States. These new manufacturing locations provide customer proximity, potential trade advantages, and supply chain resilience though require substantial capital investment and operational expertise transfer.

Market Opportunities and Challenges
Opportunities
●Advanced Module Technology Adoption: Continuing evolution in solar cell and module technologies creates substantial demand for sophisticated encapsulation materials. N-type solar cells including TOPCon, HJT, and back-contact architectures demonstrate increasing market share driven by superior efficiency and declining cost premiums. These advanced cells require encapsulation materials offering enhanced moisture barrier protection, superior thermal stability, and specialized optical properties optimizing light management. Bifacial module adoption accelerates as energy yield advantages become widely recognized, demanding encapsulation materials preventing internal corrosion and ensuring long-term dual-side power generation stability. Manufacturers developing optimized encapsulation solutions for advanced module technologies can capture premium market segments and establish technology leadership positions.
●Material Technology Transition: Structural shift from conventional EVA toward POE and EPE films presents significant growth opportunity. POE film penetration projected to accelerate substantially as N-type module market share increases and POE cost competitiveness improves through expanded domestic resin production. EPE film combining performance advantages through co-extruded construction demonstrates strong adoption trajectory. Companies developing advanced POE and EPE formulations, establishing cost-competitive supply chains, and building customer qualification portfolios can capture growing market segments. Combined POE and EPE market share projected to exceed 50% within several years, representing major market transition and growth opportunity for producers establishing competitive positions in advanced materials.
●Geographic Expansion and Localization: Growing global module manufacturing investment creates opportunities for encapsulation film production expansion serving emerging production clusters. Southeast Asian manufacturing remains important though trade policy evolution drives geographic diversification requirements. Indonesia, Turkey, and United States represent primary expansion focus as film manufacturers pursue customer proximity and supply security. Companies establishing capabilities in multiple regions can capture market growth while mitigating trade policy risks and meeting customer localization requirements.
●Raw Material Localization: Domestic POE resin production capacity development in China promises to address supply constraints, improve cost competitiveness, and accelerate POE film market penetration. Encapsulation film manufacturers establishing strong relationships with emerging domestic POE producers can secure competitive supply positions. Vertical integration opportunities into additive production and specialty formulation development enable differentiation and margin protection.
Challenges
●Intense Competition and Profitability Pressure: Solar encapsulation film market experienced severe profitability challenges during 2024, with manufacturers facing margin compression from overcapacity, intense price competition, and customer cost reduction pressure. Industry concentration with top five manufacturers supplying over 75% of global volume creates competitive dynamics where market leaders leverage scale advantages. Smaller manufacturers struggle to maintain viability against larger competitors with superior cost structures. Encapsulation film costs represent only 4%-7% of module costs, creating continuous downward pricing pressure even as performance requirements increase.
●Raw Material Supply and Cost Volatility: Encapsulation film profitability demonstrates high sensitivity to raw material costs comprising approximately 90% of total expenses. EVA and POE resin price fluctuations driven by petrochemical market dynamics create margin volatility and business uncertainty. POE supply remains concentrated among international producers, creating import dependence, supply security concerns, and cost disadvantages. While domestic POE capacity development promises improvement, technology barriers and production ramp timelines create extended transition period with continued supply constraints.
●Quality Requirements and Liability Concerns: Encapsulation materials directly determine photovoltaic module long-term reliability and warranty performance, creating stringent quality requirements. Module manufacturers demand comprehensive testing validation, field performance verification, and financial assurance from suppliers. Achieving consistent quality across high-volume production requires sophisticated processes, analytical capabilities, and quality management systems. Material deviations can cause module failures, warranty claims, and substantial liability exposure, creating ongoing quality pressure.
●Technology Transition Risks: Rapid solar cell and module technology evolution creates material obsolescence risks. Companies optimizing formulations for current technologies face displacement as architectures evolve. Balancing near-term production focus and long-term development investment challenges manufacturers, particularly smaller participants with limited research resources. Successful navigation requires deep application understanding, strong customer collaboration, and sustained technology investment.
●Trump Administration Tariff Policy and Global Supply Chain Restructuring: Trade policy uncertainty and potential tariff implementations create significant challenges for globally integrated supply chains. Encapsulation film manufacturing demonstrates extreme geographic concentration with China accounting for over 90% of global capacity, benefiting from cost advantages, infrastructure, and proximity to module manufacturing. However, evolving trade policies including potential tariffs on materials or modules could substantially increase costs, disrupt supply relationships, and accelerate restructuring pressures. Film manufacturers must evaluate diversification strategies, assess regional investment requirements, and balance cost efficiency against supply security and customer proximity. Companies establishing multi-region capabilities can mitigate trade risks though capacity investment and complexity increase substantially. Raw material concentration among international chemical producers creates additional challenges, as regional film manufacturing requires access to EVA and POE resin where capacity and technology remain concentrated. Trade policy uncertainty compounds existing profitability challenges, creating difficult strategic decisions regarding capacity timing and geographic allocation.