Global Renewable Energy Certificate Market Share Is Likely To Reach At A CAGR Value Of Around 27.19% By 2032

21-Jun-2024 | Facts and Factors

According to Facts and Factors, the global renewable energy certificate market size was worth around USD 13.24 billion in 2023 and is predicted to grow to around USD 115.36 billion by 2032 with a compound annual growth rate (CAGR) of roughly 27.19% between 2024 and 2032.

Global Renewable Energy Certificate Market Size

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A renewable energy certificate (REC) is a market commodity or instrument representing the ownership of property rights to the social, environmental, and other types of non-power aspects of renewable electricity production. When one megawatt-hour (MWh) of electricity gets generated and delivered to the electricity grid, RFCs get generated. However, the electricity generated in such a case should be from renewable sources.

Browse the full “Renewable Energy Certificate Market Size, Share, Growth Analysis Report By Capacity (0 to 1000 kWh, 1100 kWh to 5000 kWh, and More than 5000 kWh), By Type of Energy Source (Solar Power, Hydro-electric Power, Biomass Power, and Wind Power), By End Use (Compliance and Voluntary), and By Region - Global and Regional Industry Insights, Overview, Comprehensive Analysis, Trends, Statistical Research, Market Intelligence, Historical Data and Forecast 2024 – 2032" report at https://www.fnfresearch.com/renewable-energy-certificate-market-report

Renewable energy certificates include various attributes like certificate type, data, project name, racking system identity, nameplate capacity of the project, renewable facility location, renewable fuel type, emission rate of the renewable source, certificate unique identification number, and some more relevant details. There is no way of concluding the source of physical electricity received in the household or industrial settings. RECs are created to account for, track, and assign ownership to the producers of renewable energy. It can be considered a way of incentivizing the efforts of people who are switching to renewable energy.

The global renewable energy certificate market is projected to grow owing to the rising adoption of renewable energy across the globe driven by factors like growing awareness of the depletion rate of non-renewable sources, the harmful environmental impact of using non-renewable energy, and the lack of a concrete plan for sustainable growth. Currently, the world majorly functions on non-renewable sources like fossil fuel. However, these sources are decreasing rapidly and at the same leaving an irreversible impact on the environment that leads to the emission of harmful greenhouse gasses which causes severe air pollution.

Furthermore, rising mandates laid down by regional governments on various large-scale companies functioning in the public utility segment are expected to drive the demand for RECs. For instance, many state governments have created an obligation for electricity providers to meet a certain quota of power generation using renewable sources as a means to promote clean energy. Additionally, the renewable energy certificate industry can benefit from the growing incorporation of RECs in private segments because REC can offset the air pollution index caused by the company thus benefiting both the original owner of the REC and the new buyer.

The global market growth may witness certain limitations due to the existence of various loopholes in regulations surrounding RECs. Many laws regulating the use and creation of RECs are incomplete which is not allowing the global market to reach its potential. Furthermore, state governments emphasize using locally generated RECs, which is good for the domestic production of renewable energy, however, it greatly impacts the international trade of RECs which results in a loss of revenue.

The growing revamping activities surrounding RECs may provide growth opportunities whereas less voluntary uptake of RECs could pose a major challenge to renewable energy certificate industry growth.

Segmental Overview

The global renewable energy certificate market is segmented based on end-user, energy type, capacity, and region

Based on the end-user, the global market is divided into voluntary and compliance.

  • In 2023, the global market was led by the compliance segment due to the various initiatives undertaken by government bodies to ensure the promotion of renewable energy and allow seamless compliance with renewable purchase obligations (RPO)
  • As per reports, currently, there are very limited voluntary buyers of RECs which can be attributed to multiple factors
  • Onligates units like open-access consumers and discoms are the major buyers of RECs. A recent Intellecap report in India showed that nearly 60% of the country’s RECs were bought by discoms

Based on capacity, the global market is divided into more than 5,000 kWh, 1,100 kWh to 5,000 kWh, and 0 to 1,000 kWh

Based on energy type, the global market is segmented into wind power, solar power, gas power, and hydroelectric power.

  • The global market registered the highest growth in the solar power segment in 2023 since the inception of the regulation was initially targeted toward encouraging the adoption of solar energy and to date, the majority of the players contribute to the same segment
  • Hydropower plants are not included in the RECs
  • The solar power segment is expected to continue dominating in the coming years as the efforts toward harnessing solar power continue to grow from strength to strength
  • As per official data, almost 2.79% of the world’s electricity in 2019 was generated using solar energy

Regional Overview

North America is projected to lead the global renewable energy certificate market due to the ongoing and consistently rising efforts of the US and Canadian governments toward encouraging renewable energy certificates. In Canada, RECs are mostly regulated through the EcoLogo label and big corporations like Ernst & Young or Deloitte work as auditors to track and maintain the sales of RECs. The growing demand for renewable energy further strengthened by the rising stringent laws pushing international corporations to reduce their carbon footprint could also lead to higher regional growth during the forecast period. Growth in Asia-Pacific is projected to be dominated by India as it continues to invest resources in higher adoption of RECs across the compliance and voluntary segments.

Report Scope

Report Attribute

Details

Market Size in 2023

USD 13.24 Billion

Projected Market Size in 2032

USD 115.36 Billion

CAGR Growth Rate

27.19% CAGR

Base Year

2023

Forecast Years

2024-2032

Key Market Players

Central Electricity Regulatory Commission, Environmental Tracking Network of North America, General Services Administration, Green-e Energy, US Environment Protection Agency, Defense Logistics Agency Energy, Western Area Power Administration, and Others.

Key Segment

By Capacity, By Type of Energy Source, By End Use, and By Region

Major Regions Covered

North America, Europe, Asia Pacific, Latin America, and the Middle East &, Africa

Purchase Options

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Competitive Landscape

The global renewable energy certificate market is led by players like Central Electricity Regulatory Commission, Environmental Tracking Network of North America, General Services Administration, Green-e Energy, US Environment Protection Agency and Defense Logistics Agency Energy, Western Area Power Administration, and others..

Recent Developments:

  • Recent Developments:

  • (In March 2024): KBank joins forces with INNPOWER to launch a groundbreaking renewable energy certificate (REC) platform in Thailand. This initiative aims to streamline REC registration and sales, facilitating wider adoption of clean energy and potentially helping large businesses achieve net-zero goals.
  • (In December 2023): The University of Oklahoma takes a step towards a greener future with a new program focused on renewable energy. This program equips business professionals with the knowledge and skills to navigate the growing renewable energy sector.
  • (In December 2022): The high court of Delhi throws a temporary curveball at India's renewable energy market by suspending REC trading for existing certificates. This moves stems from a legal challenge to new regulations, highlighting the need for clear and consistent policies to ensure a smoothly functioning REC market.

The global renewable energy certificate market is segmented as follows:

By Capacity

  • 0 to 1,000 kWh
  • 1,100 kWh to 5,000 kWh
  • More than 5,000 kWh

By Type of Energy Source 

  • Solar Power
  • Hydro-electric Power
  • Biomass Power
  • Wind Power

By End Use

  • Voluntary
  • Compliance

By Region

  • North America
    • The U.S.
    • Canada
    • Mexico
  • Europe
    • France
    • The UK
    • Spain
    • Germany
    • Italy
    • Nordic Countries
      • Denmark
      • Sweden
      • Norway
    • Benelux Union
      • Belgium
      • The Netherlands
      • Luxembourg
    • Rest of Europe
  • Asia Pacific
    • China
    • Japan
    • India
    • Australia
    • South Korea
    • Southeast Asia
      • Indonesia
      • Thailand
      • Malaysia
      • Singapore
      • Rest of Southeast Asia
    • Rest of Asia Pacific
  • The Middle East & Africa
    • Saudi Arabia
    • UAE
    • Egypt
    • South Africa
    • Rest of the Middle East & Africa
  • Latin America
    • Brazil
    • Argentina
    • Rest of Latin America

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