Renewable Energy Market By Source (Hydropower, Wind power, Solar power and Bioenergy and Geothermal), Application (Industrial, Residential and Commercial), and Region - Market Perspective, Market Intelligence, Comprehensive Analysis, Historical Data, and Forecast for 2023-2032

Market Perspective

The global Renewable Energy Market size was worth around USD 0.90 trillion in 2022 and is USD 2.06 trillion by 2032 at a CAGR of 8.6% from 2023-2032.

The renewable energy market is driven by favorable government policies promoting the use of clean, renewable resources for power generation. These resources have minimal impacts compared to traditional sources of energy.  In line with this, the global market has made significant progress in the last few years. In 2021, the installed capacity of global renewable energy exceeded 3,064 GW, with hydropower leading the way.

China and the USA are among the largest markets for renewable energy growth, with China's capacity increasing by 70% in 2021 and 2022. Other significant contributors to the shift towards clean energy include Russia, India, Germany, Spain, and other countries.

Key Insights

• Based on source, the hydropower segment held the largest market share
• Based on application, the industrial segment dominated the market
• On the basis of region, Asia Pacific was the leading contributor to the global market revenue

Rapid Shift from Fossil Fuel to Clean Energy to Drive Growth of the Renewable Energy Market

Rising environmental issues relating to carbon emissions with time have inclined towards utilizing alternative sources of energy which portray carbon neutral or minimal carbon emissions. Conventional energy sources such as coal, natural gas, fossil fuels, and others are perishable and are constantly depleting owing to excessive utilization of resources. A shift towards infinitely available energy resources like renewable energy, geothermal energy, biomass energy, and others has been prominent. Active participation of numerous countries with the aim of reducing the impacts of carbon emissions has steadily resulted in setting trends for the alternative energy sources market.

Advancing technologies in harnessing energy and power through alternative energy sources have resulted in descending prices of equipment utilized. Global energy consumption from the renewables sector saw an increase of 1.75%. In 2021, 28.1% of the total energy demand was supplied through energy generated from renewable resources.

Growing Demand for Cost-Effective Alternatives to Traditional Energy Sources

Renewable energy sources, such as hydro, wind, and solar, provide a cost-effective alternative to traditional, non-renewable energy sources. As technology advances, the cost difference between renewable and non-renewable energy continues to widen, making renewable energy an increasingly attractive investment opportunity for companies and individuals. Additionally, renewable energy sources are sustainable and have a minimal impact on the environment, reducing carbon emissions and preserving natural resources.

Apart from this, investing in renewable energy can contribute to energy independence, reducing dependence on non-renewable energy imports. As governments around the world prioritize efforts to combat climate change and promote sustainable energy, the demand for renewable energy is expected to continue to grow, making it a wise long-term investment for businesses and individuals.

Segment Analysis

The global renewable energy market share is dominated by the hydropower segment, which accounted for over 30% of total revenues generated in 2022. Hydropower is generated by harnessing the energy from moving water and is mainly used to supply electricity in rural areas. Developing countries like China, India, Vietnam, Colombia, and Brazil are major contributors to the hydropower industry. Although the initial costs of setting up hydroelectric power plants are high, the operational and maintenance costs are relatively low.

Solar energy is the fastest-growing segment in the renewable energy market. Solar energy set-ups have low costs as compared to hydropower plants, as solar panels can be set up at residential, industrial, commercial, and barren land sites. Additionally, the transmission of electricity generated through solar panels is relatively low, and government initiatives such as smart cities and policies encouraging the deployment of solar panels will further boost the solar energy segment.

In terms of applications, the industrial segment dominated the global renewable energy market in 2022 with revenues generating over 53.7%. This is due to the increased demand and utility of power in industrial locations. The excessive demand for solar energy has resulted in a decrease in solar equipment and solar set-up prices by over 50%. Industrial goals focusing on solar energy have also boosted the segment.

Recent Development

In January 2023- Suburban Propane Partners LP through its subsidiary Suburban Renewable Energy LLC acquired renewable natural gas facilities worth USD 190 million from Equilibrium Capital Group. The deal encloses a total of 2 RNG facilities in Stanfield and Columbus.

In January 2023- the Cabinet of India approved the National Green Hydrogen mission with a disbursement of INR 200 billion. The mission launched by India aims at attaining the production of 5MMT (million metric tons) of green hydrogen by 2030. Achieving this mission will in turn reduce carbon emissions by 50mmt annually.

In December 2022- BP Plc, a British oil and gas company, completed the acquisition of Archaea Energy Inc., a US-based renewable natural gas producer. The acquisition was valued at USD 3.3 billion plus USD 800 million in net debt. Bioenergy being amongst BP’s strategic transition growth, the acquisition would help the company achieve its decarburization goals and focus on reducing the carbon intensity of its energy products.

In November 2022- Tallarna, a UK-based start-up focusing on climate tech, received investments from ABB. The partnership would focus on smart technologies in decarburization.

Ever Increasing Demand for Power and Energy Makes Asia Pacific the Largest Revenue Generator

The Asia Pacific region dominated the renewable energy market in 2021 by contributing over 38.5% of revenue to the global market. This is due to the increasing density of the population and progressing industrialization in countries like India, China, Japan, and Australia, which have led to rising demand for sustainable renewable energy. The industrial growth in the region has created a high demand for electricity, which is being met to some extent by electricity generated from solar, wind, and hydropower sources.

Asia Pacific is the largest consumer of renewable energy globally, accounting for over 50% of global consumption. China continued its dominance in the market share with 45% of global renewable energy capacity. The country has been investing heavily in renewable energy, particularly in solar and wind power. Additionally, the Chinese government has implemented policies to encourage the deployment of renewable energy, which has contributed to the country's dominance in the market.

Other countries in the Asia Pacific region such as Japan and Australia are also investing in renewable energy to meet their energy needs and reduce their carbon footprint. Japan has been focusing on solar power and has set ambitious targets to increase the share of renewable energy in its energy mix. Similarly, Australia has been investing in wind and solar power, with a goal to reach 50% renewable energy by 2030.

High Capital Investments in Renewable Energy Sector Indicate Potential Growth in Europe

Europe has shown significant growth in the global renewable energy market driven by technological advancements that have led to more efficient and innovative products. The region has observed higher capital expenditures, particularly in the European Union, due to increasing competition resulting from the reduction in costs of energy-generating products. Additionally, a shift towards sustainable investments has accelerated the growth of renewable energy in the region.

Europe is the second-largest market for renewable energy, with a high installed capacity of renewable power. Solar PV has accounted for most of the expansion in the renewable energy sector, with an acceleration of projects in Germany, Poland, Spain, and France. These countries have implemented favorable policies and regulations to support the deployment of solar PV, which has led to a significant increase in the installed capacity of solar PV in the region.

The European Union has set ambitious targets to increase the share of renewable energy in its energy mix and reduce its carbon footprint. The bloc has set a target of 32% renewable energy by 2030 and aims to achieve climate neutrality by 2050. The EU member states are taking various measures to achieve these targets, including increasing the deployment of renewable energy, promoting energy efficiency, and research and development in the renewable energy sector.

Furthermore, the European Renewable Energy Directive aims to increase the share of renewable energy in the EU's total energy consumption to 20% by 2020 and 27% by 2030. The directive also sets binding targets for the share of renewable energy in final energy consumption for each EU member state. This has led to a significant increase in investments in the renewable energy sector, particularly in wind and solar energy.

 Competitive Landscape

• ABB
• Acconia
• ENEL SPA
• General Electric
• Innergex
• Invenergy
• Schneider Electric
• Siemens Gamesa Renewable Energy, S.A.
• Tata Power
• NEXTERA ENERGY, INC.
• Iberdrola SA
• Xcel Energy, Inc.
• Suzlon Energy Ltd.

The global renewable energy market is segmented as follows:

By Source

• Hydropower
• Wind power
• Solar power
• Bioenergy
• Geothermal

By Application

• Industrial
• Residential
• Commercial

By Region

• North America
  • The U.S.
  • Canada
  • Mexico
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Nordic countries
    • Denmark
    • Finland
    • Iceland
    • Sweden
    • Norway
  • Benelux Reunion
    • Belgium
    • The Netherlands
    • Luxembourg
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • New Zealand
  • Australia
  • South Korea
  • Southeast Asia
    • Indonesia
    • Thailand
    • Malaysia
    • Singapore
    • Rest of Southeast Asia
  • Rest of Asia Pacific
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • Egypt
  • Kuwait
  • South Africa
  • Rest of the Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America