Renewable Energy Market Size, Share & Industry Analysis, By Type (Wind, Solar, Bioenergy, Geothermal, Ocean Energy, and Hydropower), By End-User (Residential, Commercial, Industrial, and Utility), and Regional Forecast, 2024-2032

The global renewable energy market size was valued at USD 954 billion in 2023. The market is projected to grow from USD 1,020.94 billion in 2024 to USD 1,574.17 billion by 2032, exhibiting a CAGR of 5.56% during the forecast period.

Renewable energy refers to the energy that comes from natural resources, also known as finite resources. These sources include the sun, wind, rain, tides, waves, and heat. Equated to fossil fuels, such as natural gas, coal, and oil, renewable power sources are sustainable and have the least impact on the environment. With growing concerns about climate change, energy security, and declining fossil fuel reserves, the use of renewable energy has accelerated globally. Authorities, companies, and individuals invest in new energy technology to reduce greenhouse gas emissions, diversify energy sources, and promote sustainable development. In addition, technological advances and cost reductions have made renewable energy more competitive with conventional energy sources, rapidly expanding and integrating it into the energy mix. The market share of renewable energy is being fueled by a growing need for eco-friendly energy solutions, favorable government policies, and advancements in technology.

MARKET DYNAMICS

MARKET DRIVERS

Rising Efforts to Reduce Effects of High Carbon Emissions to Lead Market Growth

Increasing environmental, social, and governance (ESG) criteria among investors has led to a major shift toward sustainable investments. Companies and financial organizations are increasingly focusing on renewable energy projects to align with their ESG goals and attract a broader base of savvy investors. This trend will increase demand for the clean energy and increase innovation and competition in the sector.

According to the International Energy Agency, global energy-related CO2 emissions increased by 1.1% in 2023, increasing by 410 million tons (Mt) to a new record of 37.4 billion tons (Gt). This compares to an increase of 490 million tons in 2022 (1.3%). Greenhouse gas emissions account for more than 65% of the increase by 2023.

As more capital is poured into the clean energy industry, economies of scale will lower costs, and technological advances will further stimulate market growth and speed up the transition to a low-carbon economy. In addition, government policies and incentives play an important role in increasing the demand. All such factors are anticipated to drive market growth during the forecast period.

Growing Government Investments in Renewable Energy and Favorable Policies to Boost Market Expansion

Governments across the globe have executed laws to endorse the development and utilization of renewable energy sources, including mandates, tax incentives, and subsidies. As of August 2023, the world's total installed solar energy capacity was 1,624 gigawatts (GW). This would result in 447 GW of new PV capacity installed in 2023 alone. Globally, 77.6 GW of new wind capacity was connected to the grid in 2022, reaching 1,906 GW, a 9% increase over 2021.

Further, in September 2021, the U.K. government allotted a USD 1.2 billion package for both public and private investments in India's green enterprises and renewable power. To mobilize private finance for green infrastructure in India, they launched the Climate Finance Management Initiative (CFLI) India. These investments aim to support India in achieving its 2030 aim of 450 GW of renewable energy, helping the industry to grow over the expected period and increase the compound annual growth rate (CAGR) of the market.

MARKET RESTRAINTS

High Capital Investments to Establish Renewable Energy Plants Hinder Market Growth

High capital costs hinder the installation of renewable energy by small and medium-sized retailers. While the long-term savings from lower energy bills and the profits from selling excess electricity to the grid are significant, the initial costs of purchasing and installing energy systems are high. In addition, the cost of installing renewable energy infrastructure often requires advanced technology, specialized equipment, and extensive site preparation. The preliminary costs of installing solar panels are, for example, the panels and inverters themselves, installation systems, and labor. All these factors hinder the growth of the market.

MARKET OPPORTUNITIES

Integration of Renewable Energy into Smart Grids Creates New Growth Opportunities for the Market

The integration of renewable energy into smart grids enhances energy efficiency and reduces system losses. Smart meters, sensors, and automation technologies allow for more precise monitoring and control of electricity consumption, enabling utilities to identify inefficiencies and implement demand-side management strategies. In addition, distributed renewable energy generation at the local level, such as rooftop solar panels or community wind turbines, reduces the need for long-distance transmission of electricity, minimizing energy losses during transmission and distribution.

Furthermore, smart grids facilitate the integration of electric vehicles (EVs) and other forms of distributed energy resources (DERs). As the adoption of EVs continues to rise, smart grids support vehicle-to-grid (V2G) technology, enabling EV batteries to store and discharge electricity back to the grid as needed. All these factors are expected to provide new growth opportunities for the global market during the forecast period.

In May 2024, Tata Power Delhi Distribution Limited (Tata Power-DDL) has amalgamated with the India Smart Grid Forum (ISGF) to set up a Vehicle-to-Grid (V2G) technology demonstration project in North Delhi. The Memorandum of Understanding (MoU) was signed, marking an important step toward the introduction of electric vehicles (EV) and electric power to increase the sustainability of inventory and electrical equipment.

MARKET CHALLENGES

Lack of Affordable Energy Storage is A Challenge for Renewable Energy

Renewable energy sources produce the most energy at certain times of the day. Its power output does not match peak demand hours. Solar radiation and wind cannot provide a sufficient source of energy for 24 hours per week. Solar and wind power are unpredictable. The output is different and the loads are different. Energy generation is more efficient than fossil fuels.

On the other hand, regular power generation from renewable energy sources creates a need for an efficient battery storage system. A battery storage system helps store excess energy for later use. This can disrupt the network and cause power outages. Technological advances have improved battery life and storage system capacity. High cost prevents widespread adoption. The cost of batteries should be reduced to make solar energy storage more affordable.

RENEWABLE ENERGY MARKET TRENDS

Growing Technological Advances to Support the Market Development

As renewable energy grows more important to technology and energy systems, it plays an important role in maintaining energy supplies while ensuring energy security and stability. Since new energy sources, especially wind and solar, are vulnerable to environmental conditions, it is important to ensure optimal generation and distribution to provide a reliable supply of electricity. Renewable energy forecasting is fast becoming an important tool in the energy transition.

For example, solutions, such as IBM's Renewable Energy Forecasting Platform in IBM's Environmental Intelligence Suite, can provide wind and solar forecasts with 92% accuracy. Better storage helps make electronic systems more flexible.

Solar, wind, and hydropower require energy storage systems (ESS) to provide a stable energy source. As grid-scale battery technology develops, utilities can store energy for longer periods to better handle loads in little or no downtime. For example, flow batteries are a low-cost, long-term hybrid type of grid-based energy storage that is being developed.

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IMPACT OF COVID-19 

The global impact of COVID-19 on the renewable energy market growth trends is significant due to the reduction in industrial activities and lockdowns, which further led to a decline in energy demand, including wind energy. In addition, the restrictions on public movement, workforce shortages, and supply chain constraints caused delays in plant establishment activities, with many projects postponed or slowed, thus leading to the downfall of the market.

SEGMENTATION ANALYSIS

By Type 

Solar Segment Leads the Market with Its Rapid Installation Across Developing Countries 

Based on type, the market is segmented into wind, solar, bioenergy, geothermal, ocean energy, and hydropower.

Solar power leads the market in both revenue and volume terms. Solar generation increased by 270 terawatt hours (a 26% increase) to 1,300 terawatt hours by 2022. Rapid cost reductions, supportive government policies, technological advancements, diverse applications, growing demand for clean energy, enhanced energy independence, rising electricity demand, increased public awareness, and expansion of utility-scale projects drives the market growth.

Wind energy has grown rapidly since 2000, thanks to R&D, supportive policies, and cost reductions. According to IRNA, the world's installed wind generation capacity - onshore and offshore - has increased 98 times in the last two years. From 7.5 GW in 1997 to 733 GW in 2018. Onshore wind capacity has increased from 178 GW in 2010 to 699 GW in 2020, as wind growth has increased on land, but from a low base, from 3.1 GW in 2010 to 34.4 GW in 2020. Wind power generation has increased by 5.2% between 2009 and 2019 to reach 1412 terawatt hours.

Hydropower, also known as hydroelectricity, provides benefits to local communities and plays an important role in helping to combat climate change by providing storage, energy and livelihood services.

By End-User 

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Increased Demand for Renewable Energy in the Utility Sector Boosts Segment Growth

By end-user, the market is divided into residential, commercial, industrial, and utility.

The utility segment dominates the renewable energy industry. The utility sector uses electricity to run industrial machines, lighting, computers, and office equipment, as well as equipment for cooling and heating spaces. In the industrial sector, manufacturing accounts for the largest share of annual industrial energy consumption, followed by mining, construction, and agriculture. Solar panel installation on the spot, wind energy, and hydropower on a large scale in the industrial installation increased the demand in the industrial sector.

There is a huge demand for thermal energy for heating applications in the residential sector of the world. Rapid urbanization and rising need for electricity are boosting the demand for thermal energy in the residential sector. Increasing consumer awareness in developed and developing economies is expected to support the adoption sources in the future.

Commercial solar PV panels have a lifecycle of 15-20 years and can be cast-off to power industrial buildings outdoors or in remote areas and water heating in office companies. The rapid use of PV modules in corporate offices, hotels and hospitals is necessary. Driving product demand across industries and increasing power needs in information base stations and data centers.

RENEWABLE ENERGY MARKET REGIONAL OUTLOOK

The market has been studied geographically across five main regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Asia Pacific

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Economic Growth of Asian Countries is Promoting the Expansion of the Renewable Energy Sector

As the world's fastest-growing region, Asia Pacific needs to increase energy resources to accelerate its economic growth. The geographical size of the Asia Pacific region, its diversity, and its diverse regulatory capacity provide a large market. Renewable energy is another opportunity for the region to achieve a major global position in the market and a leader in the transition to clean energy. Many Asian countries have abundant geothermal resources. Countries, such as Indonesia and the Philippines use geothermal energy to generate electricity, but the undeviating use of geothermal heat is popular in other countries. At the end of 2017, the total thermal energy capacity of the 18 countries was 22.4 GWh. Biomass, especially traditional biomass as a fuel, is used for heating in remote areas, although there is little data on this use.

Nine countries in the region produce biofuel for transportation, with the largest share coming from the People's Republic of China, India, Thailand, and Indonesia, which are also among the world's leading biofuel producers. The total production in this area was 12 million tons in 2018, an increase of 2.5 million tons compared to the previous year. About 45% of this fuel production, and the remaining 55% is biodiesel Fatty Acid Methyl Esters (FAME). Renewable capacity has increased to 988.9 gigawatts (GW) in 2018, due to the acceleration of wind and solar technologies. While hydropower had the largest share at 46%, the share of solar cells and wind energy reached 28% and 23%, respectively. Bioenergy is about 3%, and geothermal (in China, Indonesia, Japan, and the Philippines) is 0.45%. The Republic of Korea and China have 255 megawatts (MW) and 4.3 MW, respectively.

China

Rapid Expansion of Solar and Wind Power in China is Advancing Market Growth

China is the world leader in renewable energy consumption, with an annual installation of 312 GW of renewable energy in 2023. In 2023, China's solar power generation reached 584 TWh. In 2022, China installed roughly as much solar capacity as the rest of the world combined and doubled new solar installations in 2023. Chinese investments in energy remained extremely strong, accounting for one-third of clean energy investments globally and an important share of China’s overall GDP growth. China has announced dual carbon goals – to peak carbon emissions before 2030 and achieve carbon neutrality before 2060 – and has shown remarkable progress in adding renewable capacity. In 2023, China commissioned as much solar PV as the entire world did in 2022, while its wind additions also grew by 66% year-on-year. Over the past five years, China also added 11 GW of nuclear power, by far the largest of any country in the world.

North America

Technological Advancements to Boost Market Growth

North America is a growing market with advancements in technology and the adoption of new policies to increase the penetration in the region. In Canada, water, gas, and wind energy technologies play an important role in future energy self-sufficiency. Increased energy trade between countries could bring USD 10-30 billion in net value to the system. Expanding inter-border transit could bring net benefits of USD 180 billion. Although these amounts are a small percentage (less than 4%) of the total system cost of USD 5-8 trillion (including all capital and operating costs of the generation and transmission system), they have a great opportunity to offer to reduce costs.

U.S.

Rapid Growth of Solar Energy to Boost Renewable Energy Penetration in the U.S. 

In the U.S., between 1,200 and 2,000 GW of renewable energy could be used to generate 70 to 80% of U.S. electricity by 2050 while meeting projected storage needs. The country depends on renewable energy for significant power generation, particularly in the form of hydropower. In Canada, hydropower accounts for 63% of electricity generation, and some of the dams are over 100 years old. The U.S., home to famous hydroelectric projects, such as the Hoover Dam, which dams the Colorado River, pioneered solar power and remains a powerhouse of energy technology.  The solar industry employs more than 260,000 people in this country, creating jobs 17 times faster than the average.

Europe

Government Initiatives in Europe are Helping in the Regional Growth

In the last two years, the production and consumption of renewable energy have increased rapidly across Europe in response to dedicated policies and measures due to the rapid development of technology and the use of renewable electricity. As a result, greenhouse gas emissions in the EU energy system have been steadily decreasing since 1990, and the EU reached its 2020 target of 20%. EU aims to raise the share of renewables in final energy consumption to 42.5% by 2030. Solar panels on rooftops, electric cars, and wind turbines on the horizon are becoming increasingly visible across Europe. However, fossil fuels are still the chief source of energy.

The share of energy consumed in Europe in 2022 coming from renewable sources was 23%. This increase, from a level of 21.9% in 2021, is due to the strong growth of solar energy. This sector was also strengthened by the reduction of non-renewable energy consumption in 2022 linked to high energy prices, but renewable energy in Europe will continue to grow. Achieving the new target of 42.5% by 2030 would more than double the deployment of renewable energy seen in the past decade and profoundly transform the European energy system.

Latin America

Accelerating Growth of Biofuels to Fuel Market Growth

Latin America is vast and diverse in terms of economic development and natural resources. The country is rich in fossil fuels, and precious minerals. While biofuels are used in Brazil, hydroelectric power in Brazil, Venezuela, Mexico, Colombia, Argentina, and Paraguay, and solar and wind resources in Brazil, Mexico, Chile, and Argentina. The production of copper or lithium in Chile, Peru, and Argentina, the most important minerals for clean energy technology, or using large oil and natural gas resources in Venezuela, Brazil, Colombia, Argentina, Mexico or Guyana, Latin America and the Caribbean are well positioned to promote the transition to clean energy and have opportunities to global energy security and climate goals.

According to the World Economic Forum, Brazil has increased its renewable energy and share of clean energy due to long-term investment in hydropower and biomass while using solar and wind energy. Brazil's focus on planning and policy tools guarantees that businesses have created the necessary ecosystem for the energy transition movement. Brazil, the largest country in South America and the fifth in the world, has for many years demonstrated its commitment to transition to renewable energy. It currently uses almost half of its energy (49%) from renewable sources.

Middle East & Africa

Government Initiatives are Creating Opportunities for the Regional Market

According to the IRNA World Energy Transition Outlook (WETO) analysis, the Middle East & Africa can obtain approximately 26% of the total primary energy from renewables by 2050, which is the share of renewable energy reaching 53% in the electricity sector. This will decrease greenhouse gas emissions corresponding to 1.1 Gt CO2 per year. The number of professions in the sector in the region under the energy transition scenario will reach 2 million, from 542,000 in 2017. Accordingly, the green hydrogen market in the Middle East is moving from what seems to be the future to reality, with many initiatives at the national level to meet demand from export and export markets.

COMPETITIVE LANDSCAPE 

Key Industry Players

GE Vernova Leads with Its Innovative Energy Solutions 

The global market is mostly fragmented, with key players operating in the industry.  Globally, GE Renewable Energy (Vernova), Tata Power Solar, and Renewable Energy Group are dominating the market. GE Renewable Energy (Vernova) was a manufacturing and services division of the American company General Electric. It is an American multinational conglomerate that was established in 1892, incorporated in New York State, and headquartered in Boston. GE Vernova brings to market innovative solutions that deliver essential energy, renewable energy, and transportation infrastructure. The company also works with the utmost integrity, amenability culture, and admiration for human rights while also reducing the impact of environmental and technology footprint.

Some of the Key Renewable Energy Companies Profiled in the Report:

• Enel Green Power (Italy)


• Canadian Solar Inc. (Canada)


• First Solar Inc. (U.S.)


• Jinko Solar Holding (China)


• Tata Power Solar (India)


• Engie (France)


• Vestas Wind System (Denmark)


• Siemens Gamesa Renewable Energy (Germany)


• GE Renewable Energy (Vernova) (U.S.)


• Goldwind (China)


• Envision Energy (China)


• Renewable Energy Group (U.S.)


• POET (U.S.)


• Drax Group (U.K.)


• Cosan (Brazil)


• ADM (U.S.)


• Toshiba (Japan)


• Centrais Eletricas Brasileiras (Brazil)


• RusHydro (Russia)


• Statkraft  (Norway)


• ANDRITZ AG (Austria)


• Nova Innovation (Scotland)


• SIMEC Atlantis Energy (U.K.)


• Orbital Marine Power (U.K.)


• Sustainable Marine Energy Ltd. (Scotland)


• Calpine (U.S.)


• Ormat Technologies, Inc. (U.S.)


• Chevron (U.S.)


• Mitsubishi Power (Japan)


• Fuji Electric (Japan)


• Veolia (France)

KEY INDUSTRY DEVELOPMENTS:

• In September 2024, Vestas received an order for a 134 MW wind turbine from Invenergy in Japan. Wind sensors will be installed at the Inaniwa Wind Energy Center in Iwate Prefecture. This is the largest order Vestas has ever received in Japan. The company will supply and install 32 of its V117-4.2MW engines. The Danish wind turbine manufacturer has also signed a 20-year Active Output Management 5000 (AOM 5000) service contract for wind turbines.


• In September 2024, GE Vernova announced the expansion of its existing manufacturing facility in Stafford, England, with the aim of supporting the growing demand for high voltage transmission (HVDC) systems that support renewable energy projects worldwide.


• In September 2024, Tata Solar Ltd, a subsidiary of Tata Power Renewable Energy Ltd, said it had started commercial operations on its 2GW solar array at its new manufacturing plant in Tirunelveli, Tamil Nadu. With a total capacity of 4.3 GW, this plant is the largest solar and module plant in India. This sign follows the early start of investment this year.


• In January 2024, GE's offshore wind business Vernova established the signing of a strategic framework agreement with Squadron Energy for 1.4 gigawatts (GW) of onshore wind developments in New South Wales, Australia.


• In May 2021, GE Renewable Energy completed supply contracts with Dogger Bank Wind Farm (a 50:50 joint venture between SSE Renewables and Equinor) for the first two phases of what will become the world's largest wind farm more of the world. The first two phases (Doggerbank A and B) will have 95 13 MW Haliade-X wind turbines.

INVESTMENT ANALYSIS AND OPPORTUNITIES

In 2023, private equity and venture capital transactions in the renewable energy sector reached nearly USD 15 billion, the highest total in the last five years. Private equity firms are drawn to renewable energy due to its economic benefits, such as low-cost power, reduced reliance on imported fuel, and a more reliable energy supply. There are opportunities for higher cash flows and capital value improvement in adjacent technologies, such as green hydrogen, battery energy storage systems, and the electrification of heat, cooling, and transport.

GE Renewable Energy is a USD 16 billion business that combines one of the broadest portfolios in the renewable energy industry to provide end-to-end solutions for customers demanding reliable and affordable green power. GE Renewable Energy has installed more than 400+ gigawatts of clean, renewable energy and equipped more than 90% of utilities worldwide with its grid solutions.

Further, GE is strengthening its financial services in India's market through its partnership with Continuum, an India-focused renewable energy group, with 4 GW of which 855.4 MW of operating capacity, 444.4 MW is under construction, supported by strong government support, and a renewable energy target of 500 GW by 2030. By 2021, more than 1.2 GW of orders will be received from GE Renewable Energy in India, as it is the largest producer of wind power equipment.

REPORT COVERAGE

The global renewable energy market report delivers a detailed insight into the market. It focuses on key aspects such as leading companies and their operations in drilling and producing renewable energy. Besides, the report offers insights into the market trends & technology and highlights key industry developments. In addition to the factors above, the report encompasses several factors and challenges that contributed to the growth and downfall of the market in recent years.

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Report Scope and Segmentation