Renewable Energy Market Size

Global Renewable Energy Market Overview

Renewable Energy Market Size was valued at USD 1,092.91 Billion in 2023. The Renewable Energy Market industry is projected to grow from USD 1,219.00 Billion in 2024 to USD 2,277.84 Billion by 2032, exhibiting a compound annual growth rate (CAGR) of 8.13% during the forecast period (2024 - 2032). Renewable energy refers to energy derived from natural resources that are continually replenished and naturally replenished on a human timescale. Unlike fossil fuels, which are finite and contribute to environmental degradation through greenhouse gas emissions, renewable energy sources include solar, wind, hydroelectric, geothermal, and biomass.

These sources harness natural processes—such as the sun’s rays, wind currents, water flow, and Earth's geothermal heat—to generate power. Renewable energy is central to efforts to reduce carbon emissions, combat climate change, and transition to a more sustainable energy system. By utilizing resources that are constantly replenished and minimizing environmental impact, renewable energy offers a cleaner, more sustainable alternative to traditional energy sources.

 Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Renewable Energy Market Trends

Government Incentives and Subsidies

One of the most significant ways that growing government incentives and subsidies drive the Renewable Energy Market is through financial incentives that reduce the upfront costs of renewable energy projects. For example, in 2024, the Federal Investment Tax Credit (ITC) allows homeowners and businesses in the United States to claim a tax credit equal to 30% of their solar system costs. This substantial financial benefit lowers the initial investment required for solar installations, making them more accessible to a broader range of consumers and businesses. Similarly, the Production Tax Credit (PTC) offers tax benefits based on the amount of energy produced by wind turbines, encouraging the development of wind power projects. These incentives make renewable energy investments more attractive and feasible, thereby accelerating market growth.

Government subsidies also play a crucial role in supporting research and development (R&D) in renewable energy technologies. For instance, the European Union’s Horizon 2020 program provides significant funding for R&D projects focused on advancing clean energy technologies. This program supports innovations in solar power, wind energy, and energy storage solutions, helping to drive technological advancements that reduce costs and improve efficiency. By funding R&D initiatives, governments help overcome technological barriers and bring new, more efficient renewable energy solutions to market, which in turn boosts overall market growth and competitiveness. For instance, In FY 2023, India ramped up subsidies for renewable energy, which were INR 14,843 crore (USD 1.8 billion) in FY 2023, an 8% increase over FY 2022.

Government mandates and standards that require a certain percentage of energy to come from renewable sources are also a key driver. For example, Germany's Energiewende policy mandates a significant shift towards renewable energy, aiming for a substantial reduction in greenhouse gas emissions and a complete phase-out of nuclear power by 2030. The policy requires that a major portion of energy consumption comes from renewable sources, such as wind, solar, and biomass. It also mandates improvements in energy efficiency across various sectors, including industry, transportation, and residential buildings. Additionally, the policy supports the development of energy storage solutions and grid infrastructure to accommodate the increased share of renewable energy and ensure a stable and reliable energy supply. These mandates create a guaranteed demand for renewable energy, driving investment in new projects and infrastructure. Utilities and energy providers are incentivized to develop and integrate renewable energy sources to meet these requirements, which fosters market expansion and encourages the development of new technologies and infrastructure.

Growing Environmental Awareness

Growing environmental awareness has significantly driven the Renewable Energy Market by increasing public demand for sustainable energy solutions. As concerns about climate change, air pollution, and resource depletion have become more pronounced, consumers and businesses alike are seeking ways to reduce their environmental impact. This heightened awareness has led to a greater willingness to invest in and adopt renewable energy technologies. For example, many individuals are now choosing to install solar panels on their homes or purchase green energy from their utility providers as a way to contribute to environmental preservation and support cleaner energy sources. This shift in consumer behavior is creating a robust demand for renewable energy products and services, thereby propelling market growth.

Corporations are increasingly integrating sustainability into their business strategies in response to growing environmental awareness among consumers, investors, and stakeholders. Many companies are setting ambitious targets for reducing their carbon footprints and transitioning to renewable energy sources as part of their corporate social responsibility (CSR) initiatives. For instance, major tech giants like Google and Apple have committed to powering their operations entirely with renewable energy. These corporate commitments not only drive significant investments in renewable energy projects but also encourage other businesses to follow suit, further expanding the market for clean energy technologies.

Growing environmental awareness has also influenced regulatory and policy changes that promote the use of renewable energy. Governments around the world are implementing policies and regulations aimed at reducing greenhouse gas emissions and combating climate change. For example, the European Union's Green Deal outlines a plan to achieve climate neutrality by 2050, which includes significant investments in renewable energy infrastructure and incentives for clean energy adoption. These regulatory frameworks are designed to support the transition to renewable energy by providing financial incentives, setting renewable energy targets, and creating a favorable policy environment for investment in clean energy technologies. Such policies not only drive market growth but also provide long-term stability and predictability for investors and developers.

Educational campaigns and advocacy efforts have played a pivotal role in raising environmental awareness and driving the renewable energy market. Organizations such as the Sierra Club and Greenpeace engage in public education and advocacy to highlight the benefits of renewable energy and the dangers of continued fossil fuel use. These efforts have increased public knowledge about the environmental and health impacts of traditional energy sources and the advantages of renewable alternatives. By influencing public opinion and encouraging grassroots support for clean energy, these campaigns help to create a more favorable environment for renewable energy investments and policy changes.

Increasing Demand for Energy Storage Solutions

The increasing demand for energy storage solutions presents a significant opportunity for the Renewable Energy Market by enhancing grid stability and reliability. As renewable energy sources such as wind and solar are inherently intermittent, energy storage systems can play a crucial role in balancing supply and demand. By storing excess energy generated during periods of high production and releasing it during periods of low production, storage solutions help maintain a stable and continuous power supply. For instance, Tesla's Powerwall and Powerpack systems are designed to store solar energy for later use, helping to smooth out fluctuations in energy availability. This capability is essential for integrating higher shares of renewable energy into the grid, thus driving further investments and developments in storage technologies.

Energy storage solutions facilitate the broader adoption of renewable energy by addressing one of the key barriers to its deployment—intermittency. With effective storage systems, energy generated from renewable sources can be stored and used when needed, reducing reliance on fossil fuels and improving the overall efficiency of energy systems. For example, large-scale battery storage projects, such as those implemented by companies like AES Energy Storage and Fluence, allow for the integration of significant amounts of renewable energy into the grid. This ability to store and deploy renewable energy on demand encourages utilities and businesses to invest in and adopt renewable technologies, thus driving market growth.

Energy storage solutions also present opportunities in off-grid and remote applications where traditional grid infrastructure is either unavailable or economically unfeasible. In such areas, renewable energy sources combined with storage systems can provide a reliable and independent power supply. For example, in remote locations of Africa, solar microgrids paired with battery storage are being deployed to provide electricity to communities that are not connected to the main grid. These systems offer a sustainable and cost-effective solution for energy access, driving the growth of the renewable energy market in underserved regions and promoting global energy equity.

The growing interest in energy storage solutions also aligns with efforts to enhance energy independence and security. By investing in storage technologies, countries can reduce their dependence on imported fossil fuels and improve their energy resilience. For instance, countries like Germany and Japan are investing heavily in energy storage as part of their energy transition strategies to increase self-sufficiency and mitigate risks associated with energy supply disruptions. This shift towards localized energy production and storage supports the expansion of renewable energy markets and reduces vulnerability to global energy market fluctuations.

Renewable Energy Market Segment Insights:

Renewable Energy by Type Insights

The Renewable Energy Market segmentation, based on Type has been segmented as Hydropower, Wind Energy, Solar Energy, Bioenergy, Geothermal Energy and Ocean Energy. Among these, the Solar Energy segment is projected to dominate the Renewable Energy Market revenue through the projected period. Solar energy, radiation from the sun capable of producing heat, causing chemical reactions, or generating electricity. The total amount of solar energy incident on earth is vastly in excess of the world’s current and anticipated energy requirements. If suitably harnessed, this highly diffused source has the potential to satisfy all future energy needs. In the 21st century solar energy has become increasingly attractive as a renewable energy source because of its inexhaustible supply and its nonpolluting character, in stark contrast to the finite fossil fuels coal, petroleum, and natural gas. Solar energy drives and affects countless natural processes on Earth.

For example, photosynthesis by plants, algae, and cyanobacteria relies on energy from the Sun, and it is nearly impossible to overstate the importance of that process in the maintenance of life on Earth. If photosynthesis ceased, there would soon be little food or other organic matter on Earth. Most organisms would disappear, and in time Earth’s atmosphere would become nearly devoid of gaseous oxygen. Solar energy is also essential for the evaporation of water in the water cycle, land and water temperatures, and the formation of wind, all of which are major factors in the climate patterns that shape life on Earth. The potential for solar energy to be harnessed as solar power is enormous, since about 200,000 times the world’s total daily electric-generating capacity is received by Earth every day in the form of solar energy. Unfortunately, though solar energy itself is free, the high cost of its collection, conversion, and storage still limits its exploitation in many places.

Solar radiation can be converted either into thermal energy (heat) or into electrical energy, though the former is easier to accomplish. Solar energy has long been used directly as a source of thermal energy. Beginning in the 20th century, technological advances have increased the number of uses and applications of the Sun’s thermal energy and opened the doors for the generation of solar power. Solar is one of the fastest-growing energy sources in the world. The rapid development of solar power nationwide and globally has also led to parallel growth in several adjacent areas. Solar battery systems, electric vehicles, and heat pumps are all sectors likely to explode, amplifying the benefits of solar.

Renewable Energy by Type, 2023, 2032 (USD Billion)

Renewable Energy by Application Insights

Based on Application, the Renewable Energy Market is segmented into Residential, Industrial and Commercial. The Industrial dominated base year market and is also projected to dominate the Renewable Energy Market revenue through the projected period. In industrial applications, renewable energy is increasingly utilized to enhance sustainability and reduce operational costs. Integrated renewable energy systems have numerous advantages and benefits compared to conventional energy systems, such as decentralized energy production, environmental impact reduction, and better energy security. Renewable energy systems can be classified under various categories: solar, wind, hydroelectric, biomass, geothermal, and ocean.

The integration of these renewable energy resources can bring sustainable solutions and multiple products. The case studies signify the potential integration options of renewable energy systems including energy storage. Non-conventional renewable energy sources and systems (RESS) including but not limited to biomass, biogas, geothermal etc. are increasingly playing an important role for electric power distribution and storage. The idea is to develop a resilient energy infrastructure minimizing the cost of remote power and support green and sustainable development efforts. Smart Grids use digital technologies and IOT solutions to intelligently react and adapt to changes in the Grid. Siemens Accelerator for Grids portfolio is the key to exploiting the data in the grid. This allows operators to make grid operation more flexible, cost-efficient, more reliable, maintainable, safer and therefore feasible.

Renewable Energy by Application, 2023, 2032 (USD Billion)

Renewable Energy Regional Insights

Based on region, the Renewable Energy market is segmented into North America, Europe, Asia Pacific, South America, Middle East & Africa. The Asia Pacific Renewable Energy market held the maximum market share and is also expected to account for the significant revenue share during the forecast period. The renewable energy sector has witnessed significant global expansion with the expectation that worldwide renewable energy consumption will increase continuously. This is likely in a bid to combat heavy reliance on non-renewable energy resources. The Asia-Pacific region hosts half of the world's population and yet its dependence on fossil fuels is also questionable. Presently, the region is increasing much-needed investments in renewable energy production, therefore making it the most promising region when compared against North America and Europe. All the big players involved, including Australia, China, India, and Japan, have increased their investments in renewable energy manifold.

While these efforts have been in place, a lot about renewable energy infrastructures creates challenges for the Asia-Pacific region. Among the major ones are the high costs and pre-requisites of good facilities and land for renewable energy projects. Almost all the countries in this region, despite these facts, have nonetheless developed renewable energy infrastructures in one way or another. Many countries of the Asian-Pacific are perceived by their people to have very good solar and wind energy systems. It comes as no surprise, then, that this leading role in the area has placed a number of the world's leaders in the field of renewable energy in this region-the Asia-Pacific. The initiation of renewable energy projects has been taken up by various countries in the region, including China, India, and Japan. Other countries in the region have started dabbling with renewable energy. Very soon, countries in Southeast Asia, for example, Indonesia and Malaysia, are expected to dramatically raise their development budget for renewable energy.

Renewable Energy Region Insights, 2023 (USD Billion)

Renewable Energy Key Market Players & Competitive Insights

The Renewable Energy Market is characterized by a moderate to strong level of competition in the market. The players in the market are constantly innovating and expanding their offerings and presence. Despite the challenges, there are several factors that are driving growth in the Renewable Energy Market. The growing use of renewable energies is basically driven by concerns on the environmental impact brought about by the use of fossil fuel, increasing population, urbanization, and falling costs of renewable technologies. The need to ensure energy security has also encouraged the adoption of renewable and distributed energy systems. However, full decentralization of energy remains a challenge due to technological limitations and outdated infrastructure. Large projects can be of special importance to rural and developing areas where electrical supplies are often poor quality, inefficient, and unreliable. Renewable energy technologies are usually leading to improvements in energy access and quality, better quality of life, economic productivity, and environmental benefits.

Thus, these advantages are key factors driving the market growth. The market is benefiting from the development of new technologies. The key players in the Renewable Energy Market include ABB, Xcel Energy Inc., Acciona, Innergex, Invenergy, General Electric, Tata Power, Siemens Gamesa Renewable Energy SA, National Grid Renewables and EDF Renewables. These companies compete based on service quality, innovation, price, customer service, and market share. Companies also engage in various strategic initiatives, such as mergers and acquisitions, contracts, partnerships, joint ventures, and expansions, to enhance their market position and expand their reach. For instance, on 07 February 2022, GE Renewable Energy announced today the opening of a new Renewable Hybrids factory in Vallam, near Chennai, India, where 250 people are employed.

The site will manufacture the FLEXINVERTER and FLEXRESERVOIR products, and help integrate them with the FLEXIQ offering, from GE’s newly launched FLEX portfolio, designed to solve customer needs through multiple applications to enable dispatchable, green MWhs. FLEXIQ* is a digital platform that provides design, operation and fleet management solutions to enable grid compliance and maximize lifetime customer value. The FLEXRESERVOIR* is a system-integrated battery energy storage and power electronics solution for multiple configurations and market applications. The FLEXINVERTER is a containerized solution that delivers a reliable, cost-effective, plug & play, factory integrated power conversion platform for utility scale solar and storage applications.

Renewable Energy Industry Developments

April 5, 2024: Xcel Energy, along with the co-owning energy providers Dairyland Power Cooperative, Rochester Public Utilities and Southern Minnesota Municipal Power Agency, is proposing to build a new transmission line in southern Minnesota that will help deliver more low-cost renewable energy to electric customers throughout the Upper Midwest while improving overall system reliability and resiliency during extreme weather. The new infrastructure, stretching about 100 miles between Mankato and the Wisconsin border, will also reduce transmission system congestion and help energy companies in the region reduce carbon emissions and manage the system as older coal plants retire in the coming years.

Jul 27, 2023: Spanish renewables company Acciona Energia announced that it has started building a 280-MW wind farm in Alberta, Canada, its largest such project in North America. The Forty Mile wind farm, located in the County of Forty Mile No 8, will carry 49 units of Nordex turbines in what could be the first phase of the project. There is potential to expand the wind farm up to 400 MW in the second phase, Acciona Energia said. The project was developed by Renewable Energy Systems Canada Inc, part of UK-based RES Group. Acciona Energia expects its construction to finalise in the first quarter of 2025.

Key Companies in the Renewable Energy Market includes.

• ABB Ltd.


• Xcel Energy Inc.


• Acciona


• Innergex


• Invenergy


• General Electric


• Tata Power


• Siemens Gamesa Renewable Energy SA


• National Grid Renewables


• EDF Renewables

Renewable Energy Market Segmentation:

Renewable Energy Type Outlook

• Hydropower


• Wind Energy


• Solar Energy


• Bioenergy


• Geothermal Energy


• Ocean Energy

Renewable Energy Application Outlook

• Residential


• Industrial


• Commercial

Renewable Energy Regional Outlook

• Norh America


• Europe


• Asia Pacific


• South America


• Middle East & Africa