Renewable Energy Certificates Market Size - Global Industry, Share, Analysis, Trends and Forecast 2024 - 2032
The Renewable Energy Certificates Market Size accounted for USD 20.5 Billion in 2023 and is projected to achieve a market size of USD 186.5 Billion by 2032 growing at a CAGR of 28% from 2024 to 2032.
Renewable Energy Certificates Market Key Highlights
- Global renewable energy certificates market revenue is expected to increase by USD 186.5 billion by 2032, with a 28% CAGR from 2024 to 2032
- North America region led with more than 42% of renewable energy certificates market share in 2023
- The International Renewable Energy Agency (IRENA) reports that the global capacity of renewable energy sources reached 2,799 GW in 2020, accounting for 72% of net additions to global power capacity that year
- In Europe, the European Commission reports that the total installed capacity of renewable energy sources in the EU reached 388 GW in 2020, accounting for 38% of the EU's electricity generation
- By energy type, the solar energy segment captured the largest market share in 2023
- Increasing adoption of renewable energy sources, drives the renewable energy certificates market value
Renewable energy certificates (RECs) are market-based, tradable instruments that signify the environmental benefits of generating one megawatt-hour of electricity from a renewable source. By selling RECs, producers of renewable energy receive financial incentives, promoting further development in the sector. These certificates allow individuals and organizations to support renewable energy initiatives without directly purchasing or consuming the energy. RECs are utilized in both voluntary and compliance markets, with the voluntary market representing a larger portion of the total market.
The renewable energy certificates (RECs) market has seen significant expansion recently, fueled by rising demand for renewable energy, the implementation of renewable energy goals and requirements, and the surge in voluntary carbon offset initiatives. Moreover, the enforcement of renewable energy objectives and regulations in different nations and regions, such as the Renewable Portfolio Standards (RPS) in the U.S. and the European Union's Renewable Energy Directive, is projected to propel REC market growth further. Additionally, the escalating emphasis on corporate sustainability and the increasing desire for carbon neutrality are anticipated to boost demand for RECs in the voluntary sector.
Global Renewable Energy Certificates Market Trends
Market Drivers
- Increasing adoption of renewable energy sources
- Rising demand for carbon neutrality and corporate sustainability
- Government mandates and policies promoting renewable energy
- Growing awareness about the environmental benefits of renewable energy
Market Restraints
- Lack of standardization and transparency in REC certification and trading
- High transaction costs associated with REC trading
Market Opportunities
- Growing interest in renewable energy investment and financing
- Increasing demand for green and sustainable products and services
Renewable Energy Certificates Market Report Coverage
| Market | Renewable Energy Certificates Market |
| Renewable Energy Certificates Market Size 2022 | USD 20.5 Billion |
| Renewable Energy Certificates Market Forecast 2032 | USD 186.5 Billion |
| Renewable Energy Certificates Market CAGR During 2023 - 2032 | 28% |
| Renewable Energy Certificates Market Analysis Period | 2020 - 2032 |
| Renewable Energy Certificates Market Base Year |
2022 |
| Renewable Energy Certificates Market Forecast Data | 2023 - 2032 |
| Segments Covered | By Energy Type, By End Use, And By Geography |
| Regional Scope | North America, Europe, Asia Pacific, Latin America, and Middle East & Africa |
| Key Companies Profiled | 3Degrees Group, Inc., Renewable Choice Energy, 3 Phases Energy Services, ECOHZ, First Environment, Inc., Schneider Electric SE, Enel Green Power, NextEra Energy Resources, LLC, NRG Energy, Inc., Dominion Energy Solutions, Green-e Energy, and NativeEnergy. |
| Report Coverage |
Market Trends, Drivers, Restraints, Competitive Analysis, Player Profiling, Covid-19 Analysis, Regulation Analysis |
Renewable energy certificates (RECs) represent the environmental characteristics of electricity generated from renewable energy projects. Marketed distinctively from conventional electricity, they go by various names such as renewable energy credits, green tags, tradable renewable certificates, or green certificates. These certificates serve purposes like disclosure, marketing, and compliance monitoring. Customers purchase them regardless of whether they access green power from their competitive electricity provider or local utility, enabling them to buy RECs without switching electricity suppliers.
Renewable Energy Certificates (RECs) categorize renewable energy production into various types such as biomass, solar, hydroelectric, geothermal, and wind energy. They are traded globally by certificate marketers. Many incentives, including rebates and tax benefits, support renewable energy generation. RECs stimulate the renewable energy market by ensuring that an equivalent number of certificates are generated for each unit of renewable electricity produced. These certificates can be traded internationally, offsetting the use of conventional energy. Despite this, environmental organizations argue that the current certification process lacks ecological benefits, potentially hindering market growth in the future.
Renewable energy produces electricity transmitted through an extensive grid network. This grid is divided into regional power pools, often lacking proper interconnection. To facilitate the sale of renewable electricity, a governing body was established to differentiate between the electricity generated by renewables and the renewable attributes of that generation. These attributes are marketed internationally as Renewable Energy Certificates (RECs). However, no certificates are issued for the electricity itself, as it's not classified as renewable or green energy.
The collaborations by key player’s offers opportunity for large businesses to achieve net zero emissions. For instance, KBank and INNPOWER joined together in March 2024 to launch Thailand's first renewable energy certification platform. This effort attempts to promote the use of renewable energy in Thailand. KBank has also launched a variety of products and services. Moreover, the escalating global warming triggered by fossil fuel combustion is poised to amplify the necessity for renewable energy certificates. These certificates play a pivotal role in international trade, facilitating the advancement of the renewable energy sector. Given the substantial production costs associated with renewable energy, these certificates will provide an additional revenue stream for energy providers, consequently boosting their demand. With burgeoning populations and escalating industrialization, nations across Africa and Asia are witnessing a surge in electricity demand. Moreover, the doubling of power demand is propelled by intensified infrastructure development, particularly in Asia. China leads the pack in renewable energy investments in Asia, while the United Kingdom and Denmark take the helm in Europe. With a mounting emphasis on reducing carbon footprints and promoting green energy, markets such as Ireland and Scotland are poised for significant growth in renewable energy certificate demand.
Renewable Energy Certificates Market Segmentation
The global renewable energy certificates market segmentation is based on energy type, end use, and geography.
Renewable Energy Certificates Market By Energy type
- Solar Energy
- Hydro-electric power
- Wind power
- Gas power
The renewable energy certificates market has witnessed substantial growth in the solar energy segment in recent years. Solar power has emerged as a pivotal renewable energy source, buoyed by decreasing costs of solar panels, enhanced efficiency, and supportive governmental initiatives. Consequently, solar energy has become a prevalent commodity in REC trading, spurred by escalating demand, especially in burgeoning economies like China and India, and the rising integration of solar energy in commercial and industrial spheres. Additionally, the report underscores that the escalating emphasis on sustainability and the implementation of eco-friendly procurement policies by corporations are anticipated to bolster the demand for solar RECs in the voluntary market.
Renewable Energy Certificates Market By End Use
- Voluntary
- Compliance
The forecast for the renewable energy certificates market suggests a notable surge in the voluntary segment in the upcoming years. This sector encompasses organizations procuring RECs voluntarily to counterbalance their carbon footprint and bolster renewable energy initiatives. It's becoming a prominent player in the REC market, anticipated to expand at a faster pace than the compliance market. Moreover, the voluntary segment stands to gain from the growing adoption of ambitious renewable energy goals by companies, like aiming for 100% renewable energy, which is projected to fuel demand for RECs in this sector.
Renewable Energy Certificates Market Regional Outlook
North America
- U.S.
- Canada
Europe
- U.K.
- Germany
- France
- Spain
- Rest of Europe
Asia-Pacific
- India
- Japan
- China
- Australia
- South Korea
- Rest of Asia-Pacific
Latin America
- Brazil
- Mexico
- Rest of Latin America
The Middle East & Africa
- South Africa
- GCC Countries
- Rest of the Middle East & Africa (ME&A)
Renewable Energy Certificates Market Regional Analysis
North America has raised as a prominent force in the renewable energy certificates (REC) market, propelled by several factors such as supportive governmental policies, the escalating embrace of renewable energy, and the burgeoning corporate focus on sustainability. For instance, in December 2023, the University of Oklahoma announced the commencement of a new program focused on renewable energy. The program seeks to provide an outlet for business professionals to obtain certification in the renewable energy industry. The United States stands as the primary market for RECs in North America, trailed by Canada, and the region is poised to sustain its leadership in the global arena. A pivotal catalyst fueling the REC market's expansion in North America is the favorable governmental policies and incentives aimed at advancing renewable energy. Diverse federal and state-level regulations and incentives have been instituted to promote the adoption of renewable energy and curb carbon emissions. For instance, the Renewable Portfolio Standards (RPS) mandates in the United States oblige electricity providers to procure a specific proportion of their energy from renewable sources, thus generating substantial demand for RECs.
Europe is fastest growing region in renewable energy certificates market driven by ambitious sustainability goals and robust regulatory frameworks. The region's concerted efforts in transitioning towards renewable energy sources have attracted significant investments and spurred innovation. Favorable policies, coupled with increasing awareness of environmental concerns, have propelled the adoption of renewable energy certificates across various sectors. For instance, according to results of Office for National Statistics, one of new measures collected between May and June 2023, more than eight in ten (86.5%) adults in Great Britain have made at least some lifestyle modifications to assist address environmental challenges. As a result, Europe stands out as the frontrunner in renewable energy and mitigating climate change impacts.
Renewable Energy Certificates Market Player
Some of the top renewable energy certificates market companies offered in the professional report include 3Degrees Group, Inc., Renewable Choice Energy, 3 Phases Energy Services, ECOHZ, First Environment, Inc., Schneider Electric SE, Enel Green Power, NextEra Energy Resources, LLC, NRG Energy, Inc., Dominion Energy Solutions, Green-e Energy, and NativeEnergy.
Frequently Asked Questions
How big is the renewable energy certificates market?
The renewable energy certificates market size was USD 20.5 billion in 2023.
What is the CAGR of the global renewable energy certificates market from 2024 to 2032?
The CAGR of renewable energy certificates is 28% during the analysis period of 2024 to 2032.
Which are the key players in the renewable energy certificates market?
The key players operating in the global market are including 3Degrees Group, Inc., Renewable Choice Energy, 3 Phases Energy Services, ECOHZ, First Environment, Inc., Schneider Electric SE, Enel Green Power, NextEra Energy Resources, LLC, NRG Energy, Inc., Dominion Energy Solutions, Green-e Energy, and NativeEnergy.
Which region dominated the global renewable energy certificates market share?
North America held the dominating position in renewable energy certificates industry during the analysis period of 2024 to 2032.
Which region registered fastest CAGR from 2024 to 2032?
Europe region exhibited fastest growing CAGR for market of renewable energy certificates during the analysis period of 2024 to 2032.
What are the current trends and dynamics in the global renewable energy certificates industry?
The current trends and dynamics in the renewable energy certificates market growth include increasing adoption of renewable energy sources, rising demand for carbon neutrality and corporate sustainability, and government mandates and policies promoting renewable energy.
Which energy type held the maximum share in 2023?
The solar energy type held the maximum share of the renewable energy certificates industry.
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