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Renewable Energy Certificates Market Size - Global Industry, Share, Analysis, Trends and Forecast 2023 - 2032

Category : Energy and Power | Published at : May-2023 | Delivery Format : PDF | Status: Published | Pages : 250

The Global Renewable Energy Certificates (REC) Market Size accounted for USD 16.2 Billion in 2022 and is projected to achieve a market size of USD 186.6 Billion by 2032 growing at a CAGR of 24.7% from 2023 to 2032.

Renewable Energy Certificates Market Key Highlights

  • Global renewable energy certificates market revenue is expected to increase by USD 186.6 Billion by 2032, with a 24.7% CAGR from 2023 to 2032
  • North America region led with more than 42% of renewable energy certificates market share in 2022
  • 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 2022
  • Increasing adoption of renewable energy sources, drives the renewable energy certificates market value

Global Renewable Energy Certificates Market Trends

Renewable Energy Certificates (RECs) are tradable, market-based instruments that represent the environmental attributes associated with one megawatt-hour of electricity generated from a renewable energy source. The sale of RECs provides a financial incentive for renewable energy development and allows individuals and organizations to support renewable energy without physically purchasing and consuming the renewable energy themselves. RECs are used in both the voluntary and compliance markets, with the voluntary market comprising a larger share of the overall market.

The global renewable energy certificates market has experienced significant growth in recent years, driven by the increasing demand for renewable energy, the adoption of renewable energy targets and mandates, and the growth of voluntary carbon offset programs. Additionally, the adoption of renewable energy targets and mandates in various countries and regions, such as the Renewable Portfolio Standards (RPS) in the United States and the European Union's Renewable Energy Directive, is expected to further drive the growth of the REC market. Furthermore, the increasing focus on corporate sustainability and the growing demand for carbon neutrality is expected to drive the demand for RECs in the voluntary market.

Renewable Energy Certificates Market Dynamics

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 16.2 Billion
Renewable Energy Certificates Market Forecast 2032 USD 186.6 Billion
Renewable Energy Certificates Market CAGR During 2023 - 2032 24.7%
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 Market Dynamics

Renewable energy certificates (RECs) present the environmental attributes of the power that is generated from renewable energy projects. These certificates are marketed differently than commodity electricity. They are also known as renewable energy credits, green tags, tradable renewable certificates, or green certificates. These certificates are used for disclosure, marketing, and compliance monitoring. The customers buy green certificates irrespective of their access to green power through their competitive electricity marketer or local utility. Customers can buy RECs without having to change electricity suppliers.

These certificates can be classified into different types of renewable energy produced such as biomass energy, solar energy, hydroelectric energy, geothermal energy, wind energy, and certificate marketers across the world. A large number of rebates and tax benefits are provided for renewable energy-based power generation. RECs lead to the progress of the renewable energy sources market. An equivalent number of RECs are generated for every unit of electricity generated and these can be sold as a tradeable commodity in various international markets. The buying of renewable energy certificates neutralizes the generation of conventional energy. Also, the buyer receives a distinct electricity bill for the utility. However, a large number of environmental organizations claim that no ecological benefits are offered by the certification method currently being used. This is set to decline the growth of the market in the future.

Renewable energy generates electricity and is delivered through a huge transmission wire network. These transmission wires or grid is divided into regional power pools and is often not interconnected properly. In order to sell renewable electricity, a body was formed that distinguishes renewable electricity generation into two parts i.e. the electricity generated by renewable energy and the renewable attributes of that electricity generation. These attributes are sold in the international market as RECs. However, no certificates are given for the electricity part of the split as it is not considered renewable or green energy.

Global warming resulting from the burning of fossil will increase the demand for renewable energy certificates. These certificates are utilized in international trade for the development of the renewable energy sector. The renewable energy production cost is high and thus, these certificates will render an additional income to energy providers, thereby increasing their demand. Due to the rising population and increasing industrialization trends, developing nations such as Africa and Asia have a high demand for electricity. Also, owing to the rise in infrastructure development activities particularly in Asia, the demand for power has doubled. In Asia, China is the frontrunner in terms of renewable energy investments. However, in Europe, U.K. and Denmark are leading in terms of investments in renewable energy. Owing to the rising focus on the reduction of carbon footprints and green energy production, countries like Ireland and Scotland will emerge as lucrative markets for RECs.

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

In terms of energy types, the solar energy segment has seen significant growth in the renewable energy certificates market in recent years. Solar energy has emerged as a key source of renewable energy, driven by declining solar panel costs, increasing efficiency, and supportive government policies and incentives. As a result, solar energy has become one of the most commonly traded types of RECs in the market. This growth is driven by increasing demand for solar energy, particularly in emerging economies such as China and India, and the growing adoption of solar energy in the commercial and industrial sectors. Furthermore, the report highlights that the increasing focus on sustainability and the adoption of green procurement policies by corporates is expected to further drive the demand for solar RECs in the voluntary market.

Renewable Energy Certificates Market By End Use

  • Voluntary
  • Compliance

According to the renewable energy certificates market forecast, the voluntary segment is expected to witness significant growth in the coming years. The voluntary market comprises organizations that purchase RECs on a voluntary basis to offset their carbon emissions and support renewable energy development. The voluntary market has emerged as a significant contributor to the overall REC market, with the voluntary market share expected to grow at a higher rate compared to the compliance market. Furthermore, the voluntary market is expected to benefit from the increasing number of companies setting ambitious renewable energy targets, such as 100% renewable energy targets, which are expected to drive the demand for renewable energy certificates in the voluntary market.

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 Drivers

Renewable Energy Certificates Market Regional Analysis

North America has emerged as a dominant player in the Renewable Energy Certificates (REC) market, driven by various factors such as supportive government policies, increasing adoption of renewable energy, and growing corporate sustainability initiatives. The United States has been the largest market for RECs in North America, followed by Canada, and the region is expected to continue its dominance in the global market. One of the key drivers for the growth of the REC market in North America is the favorable government policies and incentives promoting renewable energy. Various federal and state-level regulations and incentives have been implemented to promote renewable energy adoption and reduce carbon emissions. For instance, the Renewable Portfolio Standards (RPS) mandates in the United States require electricity providers to source a certain percentage of their energy from renewable sources, which has created a significant demand for RECs.

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

The renewable energy certificates market size was USD 16.2 Billion in 2022.

The CAGR of renewable energy certificates is 24.7% during the analysis period of 2023 to 2032.

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.

North America held the dominating position in renewable energy certificates industry during the analysis period of 2023 to 2032.

Europe region exhibited fastest growing CAGR for market of renewable energy certificates during the analysis period of 2023 to 2032.

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.

The solar energy type held the maximum share of the renewable energy certificates industry.


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