The global renewable energy certificate market size was estimated to be US$ 11.26 Billion in 2022 and is expected grow at a CAGR of 18.9% between 2023 to 2032.
A Renewable Energy Certificate (REC) is a certificate that represents the environmental attributes of one megawatt-hour (MWh) of renewable energy generation, such as wind or solar power. These certificates are tradable, allowing organizations that do not generate their own renewable energy to purchase them in order to demonstrate their commitment to using clean energy and reducing their carbon footprint.
Each REC represents the environmental benefits of renewable energy generation, such as reduced greenhouse gas emissions, and allows the owner of the certificate to claim that they are using renewable energy. The purchase of RECs helps to increase demand for renewable energy, which in turn can drive investment in new renewable energy projects.
RECs are often used by organizations that are required to meet renewable energy targets or quotas, as well as by companies that want to improve their sustainability profile and signal their commitment to reducing their impact on the environment.
Major drivers for growth:
Rising demand for renewable energy is driving the market growth
The global Renewable Energy Certificate (REC) market is experiencing significant growth due to a combination of rising demand for renewable energy, supportive government policies and regulations, growing corporate sustainability goals, and technological advancements in renewable energy.
The demand for renewable energy has been growing rapidly in recent years, driven by concerns about climate change and the need to reduce carbon emissions. Governments around the world have implemented policies and regulations to encourage the adoption of renewable energy, and an increasing number of companies are setting sustainability goals that include reducing their carbon footprint and increasing their use of renewable energy.
Technological advancements in renewable energy, such as the development of low-cost solar panels and wind turbines, have made it more cost-effective to generate electricity from renewable sources, boosting demand for RECs. These factors are expected to continue to play a significant role in the growth of the global REC market in the coming years.
Energy Type segmentation of Global Renewable Energy Certificate Market:
Solar energy type to lead the market due to the growing number of solar projects
On the basis of type of energy, the market is segmented into, Wind Power, Solar Energy, Gas Power, and Hydro-electric Power. Currently, the solar energy segment is the largest, accounting for a significant share of the global REC market. This is due to the increasing demand for solar energy and the growing number of solar projects around the world.
Additionally, the cost of solar energy has been decreasing, making it more accessible and attractive to a wider range of organizations.
The fastest-growing segment in the REC market is wind power, which has been growing at a rapid pace in recent years. This is due to the increasing demand for wind energy, driven by the falling cost of wind power and the increasing number of wind projects being developed around the world.
Additionally, the development of more efficient wind turbines and the growth of offshore wind projects are contributing to the growth of the wind power segment in the REC market.
Application segmentation of Global Renewable Energy Certificate Market:
Compliance segment accounts for a significant share of the market
On the basis of application, the market is segmented into Compliance, and Voluntary. Among these the compliance segment is the largest segment, accounting for a significant share of the market. This segment is primarily driven by government policies and regulations that require organizations to purchase a certain amount of renewable energy or to offset their carbon emissions through the purchase of RECs.
For example, many countries have established renewable portfolio standards that require utilities to generate a certain percentage of their electricity from renewable sources, such as wind and solar power. These requirements have led to strong demand for RECs in the compliance segment, as organizations look to meet their regulatory obligations.
In contrast, the voluntary segment is driven by the growing number of organizations that are setting sustainability goals and looking to demonstrate their commitment to using renewable energy and reducing their carbon footprint.
Despite being smaller in size than the compliance segment, the voluntary segment is growing rapidly, driven by increasing demand from companies and households that want to reduce their carbon footprint and support the growth of renewable energy.
Capacity segmentation of Global Renewable Energy Certificate Market:
Capacity greater than 5000 KWH is the largest segment of the market
On the basis of capacity, the market is segmented into 0-1000 KWH, 1000-5000 KWH, and Greater that 5000 KWH. Amon these, the segment with capacity greater than 5000 KWH is the largest segment. This is due to the fact that many large organizations and utility companies generate a large amount of renewable energy, and therefore require large-capacity RECs.
These organizations and companies often have significant financial resources and can invest in large-scale renewable energy projects, such as wind and solar farms, which generate a significant amount of electricity.
On the other hand, the fastest-growing segment is likely to be the segment with capacity between 1000-5000 KWH. This segment is growing rapidly because it includes a large number of medium-sized organizations and households that are adopting renewable energy.
These organizations and households are driven by concerns about climate change and the need to reduce their carbon footprint, and they are attracted to the cost savings and environmental benefits of renewable energy.
Additionally, many countries have established feed-in tariffs and other incentives to support the development of medium-sized renewable energy projects, which is further boosting demand for RECs in this segment.
Regional trends of the Global Renewable Energy Certificate Market:
Europe region will lead the market due to the growing demand for renewable energy
Geographically the global renewable energy certificate market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa, and South America. The largest segment of the global REC market is Europe, driven by a combination of supportive government policies and regulations, growing demand for renewable energy, and a long history of investment in renewable energy.
Europe has been a leader in the adoption of renewable energy, and has established ambitious targets for the use of renewable energy sources, which has fueled demand for RECs in the region.
The fastest-growing segment of the global REC market is Asia-Pacific, driven by the rapid growth of the economies in the region and increasing demand for energy. The region has seen significant investment in renewable energy in recent years, driven by supportive government policies and regulations, as well as by a growing awareness of the need to reduce carbon emissions and to adopt sustainable energy sources.
Additionally, the region is home to some of the fastest-growing economies in the world, such as China and India, which are rapidly increasing their use of renewable energy to meet their growing energy needs.
These trends are expected to continue to drive growth in the global REC market in the coming years, and to shape the regional dynamics of the market.
Key players and market strategies:
The companies operating in the global Renewable Energy Certificate (REC) market have adopted a number of growth strategies in order to capitalize on the growing demand for renewable energy.
One common strategy is to expand their offerings in the market, either by increasing the number of RECs available for sale or by expanding into new geographic regions. This allows companies to tap into new sources of demand for renewable energy and to increase their market share.
Another key strategy is to invest in research and development in order to improve the efficiency and cost-effectiveness of renewable energy technologies. This can help companies to increase the competitiveness of their products in the market, and to differentiate themselves from competitors.
Additionally, companies are also working to build strong partnerships and collaborations with other organizations in the renewable energy industry, such as manufacturers, installers, and energy utilities, in order to expand their reach in the market and to increase their access to new customers.
These strategies are helping companies operating in the global Renewable Energy Certificate market to capture a greater share of the growing demand for renewable energy, and to position themselves for long-term growth and success.
Some of the biggest companies operating in the global renewable energy certificate market are APX, Inc. (USA), ECOHZ AS (Norway), EDP Renewables (Portugal), ENGIE (France), Enova (Norway), EON SE (Germany), EPEX SPOT SE (France), EREC Renewable Energy Certificate Ltd. (UK), European Energy A/S (Denmark), Iberdrola (Spain), Innergex Renewable Energy Inc. (Canada), Naturgy Energy Group (Spain), NextEra Energy (USA), Origin Energy (Australia), RWE AG (Germany), and many more.
Based on Energy Type
- Wind Power
- Solar Energy
- Gas Power
- Hydro-electric Power
Based on Application
Based on Capacity
- 0-1000 KWH
- 1000-5000 KWH
- Greater that 5000 KWH
- North America
- United States
- Rest of North America
- United Kingdom
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Middle East & Africa
- Saudi Arabia
- South Africa
- Rest of the Middle East & Africa
- South America
- Rest of South America