The global renewable energy market was USD 881.7 billion in 2020, USD 959.5 billion in 2021, USD 1044.95 billion in 2022, USD 1136.02 billion in 2023, and is projected to reach a value of USD 1237.83 billion by the end of 2024, USD 1347.96 billion by 2025, USD 1466.52 billion by 2026, USD 1596.63 billion by 2027, USD 1738.36 billion by 2028, USD 1892.74 billion by 2029 and is expected to hit over USD 2060.03 billion by 2030 with a registered CAGR of 8.9% from 2024 to 2030.
Renewable energy or green energy is the energy produced from naturally replenishing sources including sunshine, wind, water currents, and geothermal heat. Currently, renewable energy is used for heating, cooling, power, and transportation. Increased investment in the creation of power projects related to clean and green energy is a significant trend currently being observed in the global green energy market. A subset of sustainable energy is referred to as renewable energy. Green energy comprises environmentally friendly electricity that is generated with little to no impact. This energy is a superior substitute for fossil fuels since it has fewer negative impacts on greenhouse gases and does not contribute to global warming. One can be chosen from a variety of renewable energy sources, including wind, hydropower, solar, geothermal, ocean power, and biofuel. According to estimates, only 7% of the energy consumed worldwide (26% of the electricity in the world) comes from renewable sources. This percentage is anticipated to increase significantly in the future. The significant factors that are anticipated to contribute to the growth of the global renewable energy market include rising public and private efforts to reduce carbon emissions, rising consumer adoption of clean and green energy, and rising environmental awareness. The use of renewable energy has enormous potential to both temporarily and permanently lower costs and dependence on fossil fuels. While the price of new solar photovoltaic (solar PV) and wind installations have climbed, reversing a decade-long trend of cost decrease, the price of natural gas, oil, and coal has increased far more quickly, further enhancing the competitiveness of renewable electricity. The speed at which renewable energy can displace fossil fuels, however, depends on a number of unknowns. Additionally, it is anticipated that during the projected period, demand for renewable energy sources, such as geothermal energy and solar energy, will increase in response to the accelerated industrialization and urbanization of developing nations worldwide.
Increasing government initiatives to reduce reliance on fossil fuels for power generation, rapid industrialization in developed and developing nations, and rising oil and gas costs are some of the key factors anticipated to propel the expansion of the global market. Governments all around the world are investing a considerable amount of money into renewable energy in an effort to fulfill their climate change commitments. The US, India, and China have already made significant investments in renewable energy. We expect this trend to continue as more countries strive to transition away from fossil fuels. To promote the creation and use of renewable energy sources, numerous nations have passed legislation. Mandates, tax advantages, and subsidies fall within this group of policies. Governments in both developed and developing countries give corporate sector subsidies in order to promote sustainability and the preservation of the environment through renewable energy. Additionally, governments' policies regarding the use of wind and solar energy for electricity generation are anticipated to boost the expansion of the global market. Energy storage system innovation and improvements in solar photovoltaic (solar PV) manufacturing technology are projected to create enormous market potential. Another factor that makes renewable technology more accessible to both individuals and businesses is; continually declining it's cost. As a result of technological advancements, the cost of renewable energy is declining, and battery storage solutions are becoming more competitive, which is excellent for the expansion of the renewable energy sector. In addition, rising environmental pollution from automobiles, expanding automotive sales in developing nations, and a tendency to use bio-diesel as an alternative fuel source are some other aspects anticipated to partially boost global market expansion. Due to increased worries about the environment, society, and governance as well as global climate change, financing for renewable energy sources is surging. Due to these trends, which are anticipated to continue for the foreseeable future, the renewable energy market is predicted to expand.
According to type, hydroelectric power, solar power, and wind power make up the majority of the Renewable Energy Market's earnings. Solar is predicted to be the market with the quickest growth throughout the projection period. In sunny climates, solar panels are a great alternative for homes and businesses since they can turn sunlight straight into electricity. Solar energy is gaining ground swiftly all around the world. Growing investments are being made in the utilization of solar panels to convert solar thermal energy into electricity for usage in a variety of commercial and residential buildings around the world. In the future years, it is anticipated that the government's stated plans to develop smart cities in nations like China, Saudi Arabia, and India will increase demand for solar energy. Solar panels require a large amount of space to operate effectively, and their original cost and continuous maintenance can be high. In recent years, demand for small-scale hydropower plants has surged due to increased investment in the production of hydroelectric energy and the electrification of rural areas in developing nations like India, China, Russia, Brazil, Vietnam, and Colombia. Many countries are projected to move to install hydropower systems due to rising electricity distribution costs, power outages caused by problems in the main grid, and incentive schemes put out by governments. Between 2024 and 2030, the solar energy market is anticipated to increase at a CAGR of around 15%. From 2024 to 2030, the hydroelectric power segment is anticipated to expand at a CAGR of almost 7%. As renewable energy sources replace conventional energy sources, the wind power and bioenergy industries are also anticipated to grow gradually over the projected period. Geothermal energy is a renewable resource that is obtained from the heat of the ground and may be used to generate renewable power as well as for cooling and heating purposes. With around 4 GW, the U.S. has the largest geothermal energy capacity in the world. California is home to the largest geothermal plant in the world, and with significant industrial acceptance, geothermal energy is predicted to soon supply 10% of the U.S.'s electricity needs. On the other side, it is projected that markets like China and India will be the ones driving the need for geothermal energy. Due to a surge in investments in renewable energy projects in countries like China and India, energy consumption has dramatically grown.
According to end users, the residential sector led the market for renewable energy. The greatest market for renewable energy in the world is the residential sector. This is attributable to the public's growing awareness of the value of switching to green energy. Globally, there has been a significant demand for geothermal energy for domestic heating purposes. Given the increasing need for electricity and growing urbanization, geothermal power demand is anticipated to rise dramatically in the residential sector over the next several years. As a result of growing consumer awareness among consumers in both developed and emerging countries, it is predicted that the adoption of renewable energy sources would increase over the course of the projection period. As a result, the residential sector will dominate during the entire predicted period. However, the industrial sector may surpass the residential sector in the next years in terms of the growth of renewable energy. The industrial sector is where renewable energy finds its second-largest market. This is due to the fact that companies are actively utilizing renewable energy sources to reduce their carbon footprint. Due to more effective solar cells becoming available on the market, power generation from the industrial sector has increased over time. The price of electricity produced has also decreased thanks to increased industry rivalry, which has also increased the selection of solar panels. Commercial businesses rank third among all end users of renewable energy in terms of consumption. The cost of deploying renewable energy is falling as a result of technological developments in the field, which is increasing demand for renewable energy in the commercial sector. The residential segment is anticipated to expand at a CAGR of 8.7% between 2024 and 2030. From 2024 to 2030, the industrial segment will expand at a CAGR of 8.9%.
It is projected that the Asia Pacific area consumes more than half of all renewable energy produced worldwide. The need for power is also being fueled by the region's industrialization, rapid population growth, and surge in residential construction projects. The market in Asia Pacific is anticipated to have considerable market expansion with the highest CAGR in the near future. The market expansion of renewable energy in the region can be attributed to the growing industrialization and economic development in countries like China and India. Solar panels are mostly sold in these nations, both internationally and in the Asia Pacific. China is the Asia Pacific region's largest market for renewable energy and is making significant investments to advance the field. As a result of an increase in investments in renewable energy projects, India is one of the most important countries in the Asia-Pacific region that is seeing rapid growth in the renewable energy sector. As a result of their recent significant investments in solar power generation, nations in the region including Australia and Japan have a strong growth potential for the market of renewable energy. In addition to Asia Pacific, North America is predicted to have rapid market growth throughout the projection period. The main factors boosting the growth of the renewable energy market in North America are the expanding investments in renewable energy sources, the rising government initiatives to minimize carbon footprint, and the growing awareness of the deteriorating environmental conditions. Europe is anticipated to grow significantly during the predicted period as a result of rising consumer spending power, more awareness of green and cleaner energy, and European Union initiatives to make the continent carbon-neutral within the next several decades. Asia-Pacific will expand significantly faster than Europe between 2024 and 2030, with a CAGR of 9.9%, as Europe's predicted CAGR of 8.7%.
However, one key issue that is anticipated to impede the growth of the global market is the absence of infrastructure facilities for the quick adoption of green energy. High installation costs are another issue that is anticipated to restrict the use of green energy and hinder the expansion of the global market. Renewable energy is usually more expensive when compared to fossil sources. Clean energy's cost-effectiveness can only be seen after it has been utilized for a while, which causes skepticism among consumer organizations. Along with this, the development of an energy-harvesting architecture takes time and requires substantial study, which could hinder the growth of the global market. On the other hand, the market expansion is projected to be slowed down by the growing use of alternative, clean energy sources including gas-fired power plants and nuclear energy projects.