Global Renewable Energy Certificate Market 2024–2033

Reports Description

As per the current market research conducted by the CMI Team, the global Renewable Energy Certificate Market is expected to record a CAGR of 26.5% from 2024 to 2033. In 2024, the market size is projected to reach a valuation of USD 17.5 Billion. By 2033, the valuation is anticipated to reach USD 132.2 Billion.

Renewable Energy Certificate Market: Overview

Renewable Energy Certificates (RECs) are market-based instruments that certify the bearer’s ownership of one megawatt-hour (MWh) of electricity generated by a renewable energy source. After the power supplier feeds the energy into the system, the REC can be traded on the open market as an energy commodity.

Earned RECs can be sold to other polluting companies as carbon credits, for example, to offset their emissions. It is a market-based mechanism provided by REC Registry India to assist states in achieving administrative requirements (such as RPOs) by overcoming geographic constraints on renewable potential in various states.

RECs distinguish the electricity component (commodity) from the green/environmental aspects of renewable-energy-generated power. Following that, both components may be exchanged individually. Since the geographical boundaries of commodity electricity do not bind marketable certificates, Renewable Energy Certificates help to stimulate renewable energy output above and beyond the RPO state limits.

The renewable energy certificate market is driven by several factors, such as the rising adoption of renewable energy, the global push for decarbonization, economic benefits for renewable energy producers, increased demand for green certificates, and technological advancements in tracking systems. However, the lack of standardization across the regions might restrain the industry’s expansion.

• According to the International Energy Agency, the share of renewables in final energy consumption is forecast to increase to nearly 20% by 2030, up from 13% in 2023.

• As per the data given by the US Energy Information Administration, in 2023, the U.S. electric power sector produced 4,017 billion kilowatt hours (kWh) of electric power. Renewable sources—wind, solar, hydro, biomass, and geothermal—accounted for 22% of generation, or 874 billion kWh, last year. Annual renewable power generation surpassed nuclear generation for the first time in 2021 and coal generation for the first time in 2022.

Renewable Energy Certificate Market: Growth Factors

Rising voluntary RE energy buyers

Voluntary buyers actively seek RECs to demonstrate their support for renewable energy, including environmentally conscious people and sustainability-focused organizations. The demand for RECs increases as the market expands and more opportunities to create and sell certificates become available.

Voluntary buyers come from different industries, including firms, nonprofit organizations, schools, and individuals. This diverse group of buyers assists in stabilizing the REC sector by lowering reliance on government laws and regulations.

As more people and businesses buy RECs on their initiative, the market for REC is expanding beyond the legal requirements. This expanded customer base encourages the development of more renewable energy projects to meet rising demand.

Penetration of IoT and smart meters

Smart meters connected to the Internet of Things provide real-time energy output and consumption data. This information can be used to certify the production of renewable energy and ensure that RECs accurately reflect the environmental features of the power.

Smart meters automate data collecting methods, hence eliminating the need for manual meter readings and audits. This technology streamlines the issuance of RECs, increasing efficacy and lowering costs. Transparent and impermeable data from IoT-connected devices is required to confirm renewable energy production. Transparency between market players and the government promotes trust.

Renewable Energy Certificate Market: Recent Development

The renewable energy certificate industry adopted several strategies, which include product launches, acquisitions, collaboration, expansion, and others. Some of the company strategies include:

• In March 2024, KBank and INNPOWER partnered to unveil a renewable energy certification platform for Thailand. This initiative aims to promote the expansion of renewable energy utilization in Thailand. KBank has also launched a wide range of products and services under the concept, and the collaboration offers an opportunity for large businesses to achieve net zero emissions targets.

• In December 2023, the University of Oklahoma announced the launch of a new program to focus on renewable energy. The program aims to create an avenue for business professionals to gain certification in renewable energy.

• In August 2024, PT PLN (Persero) took a significant step towards promoting clean energy by introducing its Renewable Energy Certificate (REC) service. This initiative begins with a collaboration with media company Kumparan, which is demonstrating a strong commitment to incorporating environmentally friendly energy sources across various sectors, including mass media.

This product launch, expansion and collaboration strategies have expanded the company’s market presence in the renewable energy certificate industry and gained its competitive edge.

Renewable Energy Certificate Market: Challenge

Lack of standardization across regions

The global Renewable Energy Certificate (REC) industry suffers from a lack of uniformity across regions. This issue causes inefficiencies, restricts market expansion, and presents challenges for organizations and investors operating in different markets.

Different countries and localities define RECs and renewable energy generation requirements uniquely. Some jurisdictions, for example, only accept solar and wind energy as suitable sources, while others consider biomass, hydro, and even nuclear energy renewable.

Furthermore, countries create Renewable Portfolio Standards (RPS) and other compliance systems with varying laws and objectives, resulting in fragmented markets. Some regions have voluntary REC markets, but others rely solely on forced compliance markets.

Renewable Energy Certificate Market: Category-Wise Insights

By Energy Type:

The solar energy segment is expected to dominate the market. Solar energy output has grown significantly, accounting for a significant percentage of RECs in markets with renewable portfolio standards (RPS) or voluntary green programs. Large-scale solar projects in the United States, China, India, and Europe have increased the issuance of solar renewable energy certificates.

Besides, the wind power segment is growing at a rapid rate. The growing deployment of wind farms, spurred by lower costs and technological breakthroughs, has increased REC supply.

By End Use:

The compliance segment is expected to dominate the market. Many countries, states, or regions have laws requiring utilities to source a particular percentage of their energy from renewables. For example, in the United States, numerous states have strong RPS programs that impose renewable energy generation quotas, which drives demand for REC.

Besides, the voluntary segment is growing at a rapid rate. Many businesses establish ambitious environmental goals, such as net zero emissions or 100% renewable energy. Voluntarily acquiring RECs is one way individuals express their commitment to decreasing their carbon impact.

Report Scope

Renewable Energy Certificate Market: Regional Analysis

North America is projected to dominate the renewable energy certificate market. The market growth of renewable energy certificates in the region is attributed to the growing consumer demand for green energy. Furthermore, the presence of major regional players drives the industry expansion. Also, the increasing regulatory support propels the industry expansion.

However, the Asia Pacific is growing significantly in the global renewable energy certificate industry. The growing adoption of renewable energy, along with government initiatives, drives the industry expansion.

List of the prominent players in the Renewable Energy Certificate Market:

• Central Electricity Regulatory Commission
• Defense Logistics Agency Energy
• Environmental Tracking Network of North America
• General Services Administration
• Green-e Energy
• S. Environment Protection Agency
• Western Area Power Administration
• Ecohz
• The Green Certificate Company
• Statkraft
• STX Group
• Others

The Renewable Energy Certificate Market is segmented as follows:

By Energy Type

• Solar Energy
• Wind Power
• Hydro-electric Power
• Gas Power

By Capacity

• 0-1,000KWH
• 1,100-5,000KWH
• More than 5,000KWH

By End Use

• Voluntary
• Compliance

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America