Renewable Power Market

The global Renewable Power Market is valued at USD 1326.4 Billion in 2023 and is projected to reach a value of USD 2834.6 Billion by 2032 at a CAGR (Compound Annual Growth Rate) of 8.8% between 2024 and 2032.

Key highlights of Renewable Power Market

• Asia Pacific dominated the Renewable Power market in 2023 and obtaining the largest revenue share of 42.3%
• In 2023, the solar power segment dominated the Renewable Power market with a revenue share of 32.4%
• The industrial segment asserted its dominance in the Renewable Power Market and capturing the largest revenue share of 63.2% in 2023
• According to IEA, the global capacity for producing Renewable Power is increasing at a pace unprecedented in the last thirty years, offering a tangible opportunity to reach the target of tripling global capacity by 2030, as outlined by governments at the recent COP28 climate change conference.

Renewable Power Market: Regional Overview

In 2023, Asia Pacific accounted to have a revenue share of 42.3% in the Renewable Power Market. The rising installation of solar power projects in India and China is propelling the growth of the Renewable Power Market in this region. According to the Ministry of New and Renewable Energy (MNRE), India's current capacity for installed renewable energy stands at 133.89 GW. Likewise, China's solar industry is poised to achieve unprecedented milestones in the years ahead. Surpassing the 500 gigawatts (GW) threshold by the conclusion of 2023 will mark a significant achievement, accomplished over a span of 13 years. In addition, countries in the region such as Australia and Japan, demonstrate substantial growth prospects due to their significant investments in solar power generation over recent years.

U.S. Renewable Power Market Overview

The US Renewable Power market, valued at USD 134.6 Billion in 2023 to USD 270.2 Billion in 2032, is anticipated to grow at a CAGR of 8.1% from 2024 to 2032. Increasing government incentives and rising demand for clean energy sources is accelerating the growth of the Renewable Power Market in United States. For instance, In June 2023, NJR Clean Energy Ventures (CEV) finished building an 8.9-megawatt (MW) floating solar array, spanning 17 acres across the Canoe Brook reservoir in Short Hills, New Jersey. This array stands as the largest of its kind in North America, catering to approximately 95% of the power demand for New Jersey American Water's Canoe Brook Water Treatment Plant. Operational since January, the facility generates sufficient electricity to supply 1,400 homes. In addition, the United States witnessed a historic peak in Renewable Power utilization, constituting roughly 13% of the nation's overall power consumption in 2022. Within this, the electric power sector contributed around 61% to the total Renewable Power consumption, while renewable energy sources contributed approximately 21% to the total electricity generation in the U.S.

The global Renewable Power market can be categorized as Product, Application, and Region.

Renewable Power Market: Product Overview

In 2023, Product generated a significant revenue share of 32.4% in the Renewable Power Market. The Product segment is divided into Hydropower, Wind Power, Solar Power, Bioenergy, and Others. The use of solar power is expanding quickly all over the world. Investments in the installation of solar panels to produce electricity from solar thermal energy are growing all over the world for use in a variety of commercial and residential buildings, industries, and homes. For instance, as per Freyr Energy, investing in solar panels is considered secure and can yield a return on investment (ROI) ranging from 25% to 30%, typically recouping the initial investment within 3 to 5 years. Homeowners are eligible for government subsidies when installing on-grid solar systems, while businesses can benefit from tax credits, including accelerated depreciation of up to 40%. The global market for Renewable Power is anticipated to witness rise in the solar segment due to a surge in the government sector's use of solar electricity.

Renewable Power Market: Application Overview

In 2023, the industrial segment held a significant revenue share of 63.2% in Renewable Power Market. The application segment is classified into Industrial, Residential, and Commercial. Renewable energy sources offer a means to reduce carbon emissions and cut down on operating expenses within the industrial sector. The number of utility projects and the expansion of the PV module business throughout the industrial sector are predicted to increase due to the growing demand for clean electricity. The Solar Energy Industries Association estimates that, there will be approximately 37 GW of operating power plants in the United States, and an additional 112 GW are under development. Over the course of the projection period, these factors are anticipated to fuel demand for solar PV panels in the industrial application segment.

Key Trends

• The integration of energy storage solutions offers renewable energy management and enhance the grid stability. This trend augments the growth of the Renewable Power Market. For example, Tesla's deployment of large-scale battery storage systems, like the Hornsdale Power Reserve in South Australia, demonstrates this trend.
• The advancement in offshore wind projects is gaining traction because of its high energy potential and reduced visual impact compared to onshore wind technology. Projects like the Hornsea One offshore wind farm in the UK exemplify this trend, being one of the world's largest offshore wind farms.
• The supportive government policies and regulations to accelerate renewable energy deployment is a revolutionizing trend in the growth of the Renewable Power Market. Some of these government authorities includes Renewable Energy Target (RET) in Australia and the Renewable Energy Standard (RES) in the United States.

Premium Insights

The Energy Information Administration projects that by 2024, the deployment of Renewable Power will have increased by 17% to 42 GW, or over a quarter of all electricity generated. This indicates that the market for Renewable Power is expected to develop significantly. These measures have the potential to accelerate the yearly deployment rates of wind and solar power to 44 GW to 93 GW between 2023 and 2030. This can result in the deployment of additional utility-scale solar, wind, and storage capacity, which could reach 850 GW cumulatively by 2030. This projected spike in the use of renewable energy highlights the market's development and growing importance in supplying energy needs in a sustainable manner.

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Market Dynamics

Surge in installation of hydropower projects fuels the Renewable Power Market growth

The Renewable Power market is witnessing significant momentum, particularly in the hydropower segment. According to the International Renewable Energy Agency, global hydropower installed capacity surged to 1,393 gigawatts (GW) in 2022, marking a notable increase of 2.19% from the previous year. This growth trajectory is expected to continue, driven by upcoming hydro projects and technological advancements. In August 2022, Natel Energy, founded by MIT alumni siblings, introduced innovative hydropower systems featuring fish-safe turbines and other eco-friendly features designed to mimic natural river conditions. In addition, government initiatives, such as the Government of India's declaration regarding the development of two hydroelectric projects in Nepal, the West Seti hydroelectric Project and the Seti River Hydropower Project is accelerated the rapid expansion of the market. With the estimated USD 2.4 billion in investments required for these projects, the hydropower market is expected to grow rapidly in the near future thanks to a combination of smart investments and technology advancements.

Increasing adoption of ambitious renewable energy goals and policies across various utilities drives the Renewable Power Market growth

Increasing adoption of ambitious renewable energy goals and policies across various jurisdictions and utilities is propelled the expansion of the Renewable Power Market in recent years. Presently, twenty-nine jurisdictions, accounting for nearly half of US electricity retail sales, have implemented mandatory renewable portfolio standards, while twenty-four jurisdictions, including two newcomers in 2023, have committed to achieving zero greenhouse gas emissions or 100% renewable energy goals by 2030 through 2050. These initiatives are anticipated to drive a substantial demand for clean electricity, estimated at an additional 300-terawatt hours (TWh) by 2030. Furthermore, a growing number of individual utilities, consisting of 56 individual and 28 parent utilities serving 83% of US customer accounts, have set carbon reduction targets, with twenty-five utilities pledging to achieve either an 80% carbon reduction or an 80% share of clean generation by 2030.

Competitive Landscape

Major industry players are directing their efforts towards technological advancements and innovation aimed at reducing the cost of Renewable Power generation. Additionally, these participants are implementing various strategic initiatives to enhance their market presence. For example, in July 2022, ACCIONA finalized an agreement with FORTIA, facilitating the provision of an energy management platform to significant industrial consumers, coupled with the physical delivery of over 1TWh of renewable electricity over a 5 to 10-year duration.

The key players in the global Renewable Power market include - ABB, Acconia S.A., Enel Spa, General Electric, Innergex, Invenergy, Schneider Electric, Siemens Gamesa Renewable Energy S.A., Suzlon Energy Ltd., Tata Power among others.

Recent Market Developments

• In April 2023, ArcelorMittal revealed that its Brazilian division, ArcelorMittal Brazil, has established a partnership with the Brazilian renewable energy firm Casa dos Ventos to undertake the development of the Babilonia wind power project, boasting a capacity of 554 MW. This project, estimated to require an investment of USD 800 million, is slated to be situated in the central region of Bahia, northeast Brazil. Under the joint venture, ArcelorMittal is expected to possess a 55% stake, with Casa dos Ventos holding the remaining share.
• In January 2023, Cepsa revealed plans to construct three additional solar power projects in Castilla-La Mancha, Spain, with a combined capacity of 400 MW. These solar energy farms are anticipated to be established in the towns of Campo de Criptana and Arenales de San Gregorio, with an estimated investment of USD 305 million.
• In May 2022, Construction has commenced on an 8.9-MW floating solar installation in Millburn, New Jersey, by NJR Clean Energy Ventures (CEV), slated to become the largest floating array in the United States. This project utilizes a floating racking system and is set to accommodate 16,510 solar panels on a reservoir situated at the New Jersey American Water Canoe Brook Water Treatment Plant. Through a power purchase agreement with CEV, the clean energy generated by the array is projected to meet approximately 95% of the facility's annual power requirements.