According to Latest Report Study, the global renewable energy certificate market size is expanding around USD 100.96 billion by 2030 and growing at a CAGR of 25.9% from 20221 to 2030.

Renewable Energy Certificates (RECs) are designed as a market-based instrument to provide an economic incentive for electricity generation from renewable energy sources. Each REC represents proof that 1 MWh of renewable energy has been produced and embodies the environmental benefits that amount of renewable energy generated. REC registries electronically issue RECs based on renewable energy generators' output. A REC, and its associated attributes and benefits, can be sold together or separately from the underlying physical electricity associated with the renewable-energy generation. RECs are an effective and recognized way of reaching emission targets and improving sustainability.

RECs are traded. When a company buys RECs as documentation for the electricity delivered or consumed, those RECs are cancelled in the registry. This single standardized instrument makes it easy to track ownership, verify claims, and ensure that RECs are only sold once and there is no double counting.

The global renewable energy certificate market size was accounted at USD 12.72 billion in 2021 and is expected to surpass around USD 100.96 billion by 2030 with a CAGR of 25.9% from 20221 to 2030.

Impact

RECs are a market-based instrument and an effective way to increase the market demand for renewable energy. Buying RECs demonstrates environmental leadership, sends a signal to the market that you prefer to consume renewable energy, and shows your commitment to changing energy behaviour. RECs also give power producers an extra income source, making it more appealing to build more renewable energy production.

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Regulation

RECs can be used for voluntary Scope 2 reporting. Corporate stakeholders have increasing expectations about reporting the origin of the power consumed. They expect that companies report according to international standards including the CDP reporting and the Greenhouse Gas Protocol. The updated Greenhouse Gas Protocol Scope 2 Guidance features Guarantees of Origin, RECs and I-RECs as mainstream instruments for documenting and tracking electricity consumed from renewable sources. Over the years the REC market has developed its references and criteria.

Drivers, restraints, and opportunities

Surge in the environmental awareness and availability of excess power from small-scale renewable energy resources drive the growth of the global renewable energy certificate market. However, lack of standard regulations and unawareness regarding the sales of renewable energy hinder the market growth. On the other hand, accelerated innovation activities and investments in the development of sustainable renewable energy resources create new opportunities in the coming years.

The increase in demand for power from renewable energy resources led to the high demand for renewable energy certificate market. The presence of developing countries such as India and China are under rapid development renewable energy infrastructure is also a factor driving the growth of the market. As of 2021, India had 96.96 GW of renewable energy capacity and represents 25.2% of the overall installed power capacity which provides great opportunity for the expansion of renewable energy certificates. The rapid development in communication and internet technology led to the development of green energy centres which can be used to track the total production and consumption of green attribute energy resources. The above mentioned rapid development and application of IoT in this market will provide ample of opportunities for the development of renewable energy certificate market. The increase in GHG emission and global warming across the world and rapid development in the conversion efficiency of the renewable energy are the major driving factors for the growth of the market.

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The rising demand for the green energy

The extensive usage of the fossil fuel has depleted this energy source. Therefore, the need for sustainable and renewable energy sources has increased in the past few years. Moreover, rising concerns regarding the drowning health of the environment owing to the pollution has necessitated the adoption of the green energy across the globe. Hence, the increased demand for the green energy and development of the renewable energy sources is projected to drive the growth of the global renewable energy certificate market during the forecast period.

Restraints

Lack of awareness in underdeveloped nations

There is a lack of awareness regarding the renewable energy certificate in the underdeveloped countries. Moreover, lack of sufficient funds in the underdeveloped nations is restricting the development of various renewable energy sources like hydro power plants and other source of flowing water. This may hamper the market growth in the upcoming years.

Opportunities

Rising government and private investments in the development of renewable power plants

The rising investments of the government and the private sector to develop and build the various renewable power plants is expected to drive the market growth in the foreseeable future. Moreover, the government initiatives in promoting the renewable energy certificates is offering lucrative growth opportunities.

Challenges

Lack of regulation

Lack of proper regulations in the developing and underdeveloped markets is a major challenge that may potentially restrict the market growth in the future.

Covid-19 Scenario

- The declined demand for non-essential products and complete or partial closedown of automotive, electrical, and other energy-related industries impacted the growth of the renewable energy certificate market during the Covid-19 pandemic.

- Improper supply of raw materials and disrupted operations in the power generation sector led to the negative impact on the renewable energy certificate market.

- Moreover, governments invested and supported the development of renewable energy resources through various policies due to the uncertainties that occurred during the Covid-19 pandemic.

The solar energy segment to continue its lead in terms of revenue during the forecast period

Based on energy type, the solar energy segment accounted for the largest share in 2020, contributing to more than half of the global renewable energy certificate market, and is projected to continue its lead in terms of revenue during the forecast period. This is due to rapid development of solar power generation worldwide, surge in demand for renewable energy, and depletion of fossil fuel resources. However, the gas power segment is expected to witness the largest CAGR of 28.3% from 2021 to 2030, owing to the demand for power, presence of biofuels that can be produced from plants, and rise in municipal waste management and recycling across the world.

The voluntary segment to maintain its leadership status during the forecast period

Based on end use, the voluntary segment contributed to the highest share in 2020, holding nearly three-fourths of the global renewable energy certificate market, and is estimated to maintain its leadership status during the forecast period. This is due to rise in the demand for power and increase in awareness among the people regarding the emission of GHG during the production of energy. However, the compliance segment is expected to portray the highest CAGR of 27.3% from 2021 to 2030. This is attributed to surge in the market share value of renewable power generation and demand for government policies to offset the GHG emissions.

Asia-Pacific, followed by Europe and North America, to maintain its dominant share by 2030

Based on region, Asia-Pacific, followed by Europe and North America, held the highest market share in 2020, accounting for more than one-third of the global renewable energy certificate market, and is estimated to maintain its dominant share by 2030. Moreover, this region is projected to manifest the fastest CAGR of 29.2% during the forecast period. This is due to presence of developing countries such as India and China that are under rapid development renewable energy infrastructure.

Leading market players

Central Electricity Regulatory Commission

Green-e Energy

Environmental Tracking Network of North America

Western Area Power Administration

General Services Administration

U.S. Environment Protection Agency

Defense Logistics Agency Energy

Segments Covered in the Report

By Energy Type

Wind Power

Solar Energy

Gas Power

Hydro-electric Power

By End Use

Compliance

Voluntary

By Capacity

0-1000 KWh

1000-5000 KWH

Greater that 5000 KWH

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