Renewable Energy Market Size
The Global Renewable Energy Market reached USD 1.1 trillion in 2022 and is expected to reach USD 2.0 trillion by 2031, growing with a CAGR of 8.4% during the forecast period 2024-2031. Globally, renewable energy is witnessing rising adoption, mainly due to increasing investment in the rector. For instance, the European Union (EU) has targeted €210 billion (USD 223 billion) investment in renewable energy by 2027.
The International Renewable Energy Agency (IRENA) forecasts that 85% of generated energy would be derived from renewable sources by 2050. The global renewable energy market is expected to witness significant growth during the forecast period, especially due to rapid capacity addition by major countries such as India, China and the U.S.
Global initiatives and agreements, such as the Paris Agreement, have set ambitious targets for reducing greenhouse gas emissions and increasing renewable energy adoption. For instance, China has committed to install over 1200 GW of solar and wind energy generation capacity by 2031, as part of a larger plan to achieve carbon neutrality by 2060.
Market Summary
| Metrics | Details |
| CAGR | 8.4% |
| Size Available for Years | 2022-2031 |
| Forecast Period | 2024-2031 |
| Data Availability | Value (US$) |
| Segments Covered | Type, End-User, and Region |
| Regions Covered | North America, Europe, Asia-Pacific, South America and Middle East & Africa |
| Fastest Growing Region | Asia-Pacific |
| Largest Region | Asia-Pacific |
| Report Insights Covered | Competitive Landscape Analysis, Company Profile Analysis, Market Size, Share, Growth, Demand, Recent Developments, Mergers and Acquisitions, New Product Launches, Growth Strategies, Revenue Analysis, Porter’s Analysis, Pricing Analysis, Regulatory Analysis, Supply-Chain Analysis and Other key Insights. |
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Market Dynamics
Growing Adoption of Smart Grid Technology
Smart grids enable modernizing traditional electricity grids by incorporating advanced technologies and communication systems. The grids replace aging infrastructure with digital, interconnected systems that can handle the evolving energy landscape, including the integration of renewable energy sources, energy storage, electric vehicles, and other emerging technologies.
Smart grid technologies facilitate the integration of energy storage systems with renewable energy sources. Energy storage helps address the intermittent nature of renewable generation by storing excess energy during times of high production and releasing it during periods of low or no age. Smart grids improve the reliability and dispatchability of renewable energy, making it a key factor in increasing the global adoption of renewable energy.
Increasing Public Awareness And Consumer Demand
Increasing public awareness of environmental issues, such as climate change and air pollution, has led to a greater emphasis on clean and sustainable energy sources. Consumers are becoming more conscious of conventional energy sources' environmental impact and actively seeking renewable alternatives. This awareness has resulted in a shift in consumer preferences and an increased demand for renewable energy solutions.
Supportive government policies and incentives have reinforced public awareness and demand for renewable energy. Many governments have implemented favorable regulatory frameworks, financial incentives, and feed-in tariffs to encourage the adoption of renewable energy. It has led to increased adoption of residential renewable energy solutions such as rooftop solar power systems.
Fossil Fuel Subsidies Creating Market Distortion
Fossil fuel usage is heavily subsided by many developing and underdeveloped countries globally. The most prominent and direct subsidy is for fuel products like gasoline and diesel. Due to powerful lobbying, fossil fuel producers can also garner indirect support such as tax credits and fixed-price government purchase contracts.
These subsidies artificially lower the cost for fossil fuel energy sources, making them appear much more competitive than renewable energy sources. The artificial market distortion creates a preference for fossil fuels over renewable energy since fossil fuels are widely available and do not require expensive upfront investment. Fossil fuel subsidies discourage investment in renewable energy, thus inhibiting market growth.
Market Segment Analysis
The Global Renewable Energy Market is segmented based on type, end-user and region.
Reliability and Energy Density Give Hydroelectric Energy A Major Share In The Global Market
Hydroelectric energy accounted for nearly 16% of the total installed power generation capacity globally in 2022, according to the International Renewable Energy Agency (IRENA) Hydropower is a well-established and mature technology with a long history of development and deployment. The technology for harnessing energy from flowing or falling water has been refined over many decades, leading to reliable and efficient hydropower systems.
Hydropower offers a higher energy density compared to solar and wind energy. The high energy density makes hydropower a favorable choice for large-scale electricity generation. Hydropower plants can provide consistent and reliable power generation, unlike solar and wind energy, which are intermittent and dependent on weather conditions.
Market Geographical Share
Strong Government Initiatives Helps To Propel Market Growth In Asia-Pacific
Asia-Pacific accounts for nearly half of the market share in the Global Renewable Energy Market. Asia-Pacific is home to a rapidly growing population. To meet growing energy demands and stave off the effects of climate change, countries are investing in the comprehensive development of renewable energy, such as solar and wind.
India and China are among the leading countries augmenting their renewable energy generation capacity. The Draft National Energy Policy, unveiled by the Indian government in 2022, aims to increase the share of renewables in the energy mix to 40% by 2030. The Indian government provided subsidies of ₹11,529 crore (USD 1.3 billion) for renewable energy generation in 2022. India also offers a subsidy of up to 40% of the total cost for rooftop solar panel installation.
China invested nearly USD 546 billion in renewable energy in 2022 and accounted for almost half of the global investment in renewable energy, according to data from the news site Bloomberg. China is expected to add approximately 100 GW of solar energy capacity and 61 GW of wind energy capacity in 2023. China is expected to continue to add significant renewable energy generation capacity throughout this decade.
Market Companies
The major global players include Acciona Energia, EDF Renewables, Vestas, Ørsted A/S, First Solar, Adani Green Energy, Tata Power, Duke Energy Corporation, Iberdrola, S.A. and NextEra Energy, Inc.
COVID-19 Impact
The COVID-19 pandemic has had a mixed impact on the global renewable energy market. On one hand, the initial outbreak and subsequent lockdown measures disrupted supply chains, delayed projects and caused a decline in investment. Many renewable energy projects faced challenges in sourcing components and equipment, as well as in accessing financing. Consequently, the pandemic caused a slowdown in the construction and deployment of renewable energy infrastructure globally.
However, the pandemic highlighted the importance of sustainable energy systems. As governments and societies sought to recover from the crisis, there was an increased recognition of the need to transition towards cleaner energy sources. Stimulus packages and recovery plans in various countries included provisions to support renewable energy projects and accelerate the transition to a low-carbon economy. This has resulted in a renewed focus on renewable energy development.
AI Impact
Artificial intelligence (AI) has played a significant role in advancing renewable energy technologies and optimizing their efficiency. AI algorithms and machine learning techniques have been applied to improve the performance of renewable energy systems, enhance forecasting models for solar and wind power generation and optimize the operation of renewable energy grids. The solutions help to increase renewable energy integration and reduce costs.
Furthermore, AI has facilitated advancements in energy storage technologies, which are crucial for the widespread adoption of renewable energy sources. AI algorithms can optimize the charging and discharging patterns of batteries, improving their lifespan and efficiency. It has led to the development of more effective and affordable energy storage solutions, enabling the integration of intermittent renewable energy sources into the grid.
Ukraine-Russia War Impact
The Ukraine-Russia war has geopolitical and economic implications that have affected the global renewable energy market. European countries imposed sanctions on Russia due to the war. It caused disruptions in energy supplies, since Russia is a major supplier to Europe. Soaring energy inflation has led to the European Union (EU) to invest significantly in expanding renewable energy production capacity.
The EU has unveiled plans to more than triple solar and wind energy generation capacity by 2030. The plan is projected to increase the share of renewables in the energy mix to 45% by 2030. The EU has also unveiled a plan to quit Russian fossil fuel-based energy sources by 2027. It is also exploring legal proposals to make it easier for renewable energy projects to get permits and licenses.
Key Developments
- In May 2023, ONGC, India’s state-owned oil and gas company, announced an investment of USD 12 billion in renewable energy. The company plans to add 10 GW of renewable energy generation capacity to its portfolio by 2030.
- In May 2023, the Chinese installed wind and solar energy capacity reached 820 GW, accounting for nearly 31% of the total installed power generation capacity, according to data released by the Chinese government.
- In May 2023, Germany announced a tender for constructing ground-mounted solar energy plants with a total capacity of 1.6 GW. It is part of a larger plan to allocate and build 5.8 GW of installed solar energy generation capacity in 2023.
Why Purchase the Report?
- To visualize the Global Renewable Energy Market segmentation based on type, end-user and region, and understand key commercial assets and players.
- Identify commercial opportunities by analyzing trends and co-development.
- Excel data sheet with numerous data points of renewable energy market level with all segments.
- PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
- Product mapping available as Excel consisting of key products of all the major players.
The Global Renewable Energy Market Report Would Provide Approximately 53 Tables, 50 Figures And 192 Pages.
Target Audience 2024
- End-User Companies
- Manufacturers/ Buyers
- Industry Investors/Investment Bankers
- Research Professionals
- Emerging Companies
