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Renewable Energy Market Overview
Increasing demand for energy storage, microgrid and artificial intelligence (AI) technologies, and digitization, and falling costs of installation of renewable energy solutions are some of the key trends observed in the global renewable energy market. Pairing a storage system with a renewable energy source ensures a smooth and steady power supply, even when weather conditions are not optimal for energy generation. Microgrids provide energy independence, efficiency, and protection during emergencies, while AI with microgrid controller allows for continuous adaptation and improvement of operation. Using digital devices, one can optimize energy system settings in a real-time context, and monitor and analyze performance of energy-consuming devices. Along with, decrease in the installation costs of the solutions may also contribute to the adoption of renewable energy.
Renewable energy, often referred to as clean energy, comes from natural sources or processes, which are constantly replenished. Renewable energy technologies are the fastest growing energy technologies and are cost competitive in a variety of grid, off-grid, and remote applications worldwide. They utilize locally available resources, offsetting the need for costly fuel imports; are environmentally beneficial, without the harmful emissions of conventional energies; provide diversification to a country’s energy mix; and create local job and income opportunities. The renewable energy market is segmented based on type, application, and region.
The renewable energy market is categorized, based on type, into wind energy, solar energy, hydropower, bioenergy, and others. Among these, the solar energy category holds notable share in the market, due to the continuous decline in cost of its solutions, which as a result helps people to adopt the energy without any budgetary constraints. Further, government support in the form of incentive and feed-in tariff in installing solar energy systems also bolster the market growth.
The renewable energy market is categorized into residential, commercial, industrial, and utility, on the basis of application. Of these, the utility category holds significant share in the market, due to the rise in demand for renewable energy to reduce CO2 emission, which only be possible by generating energy at a large scale, and utility projects are one of the prime generators and users of renewable energy at a large scale. The residential and commercial sectors are also rapidly adopting renewable energy, due to the decline in costs of solar photovoltaic cells, which widens the gap with retail electricity prices, and as a result increasing the distributed photovoltaic economic attractiveness among private investors.
Geographically, the renewable energy market is categorized into North America, Europe, Latin America (LATAM), Asia-Pacific (APAC), and the Middle East and Africa (MEA). Among all regions, APAC holds significant share in the market, due to the environmental concerns regarding fossil fuels, rapid urbanization, and economic growth in emerging economies, such as China and India, which are contributing to the rapid growth of the market in the region. Further many countries are increasingly moving toward the auction system, a competitive selective process, compared to the traditional feed-in-tariff mechanism, along with government initiatives and fiscal incentives have proven to be an accelerator of the renewable energy ecosystem.
Renewable Energy Market Dynamics
Declining costs and rising capacity of renewable energy sources, along with increased competitiveness of battery storage, are some of the factors driving the growth of the renewable energy market. Further, the rapidly increasing investment for the clean energy is also impacting the market in a positive way. For instance, as per the Statista report in 2004, clean energy investment totaled just over $45 billion, which increased to $279.8 billion in 2017. The significant increase in investment indicates that the industry has matured greatly. The U.S. alone accounts for a significant share in the global clean energy investment. In 2018, funding for clean energy initiatives totaled $64 billion in the country.
To some extent, trade and tariff policy uncertainty will likely keep the industry on the lookout for risk mitigation tactics. Further, decrease in crude oil price may encourage governments and companies to use fossil fuel for energy generation. This may restrain the growth of the renewable energy market.
Renewable Energy Market Competitive Landscape
Some of the major companies operating in the global renewable energy market are Siemens Gamesa Renewable Energy S.A., Vestas Wind Systems A/S, First Solar Inc., Canadian Solar Inc., General Electric Company, Orsted A/S, NextEra Energy Inc., Électricité de France S.A., Suzlon Energy Ltd., and Eletrobras.
The study provides the historical as well the forecast market size for various countries, including the U.S., Canada, France, Germany, the U.K., Italy, Spain, Japan, China, India, South Korea, Brazil, Argentina, Saudi Arabia, and South Africa.
Renewable Energy Market Size Breakdown by Segment
Based on Type
Based on Application