There are various renewable sources of energy such as wind, solar, geothermal, hydropower, and bioenergy. It is estimated that around 7% of the global energy demand is fulfilled by the renewable energy sources
The renewable energy market size accounted for US$ 952.16 billion in 2021 and is expected to reach around US$ 1.9 trillion by 2030, growing at a CAGR of 8.6% every year.
The rising government and corporate investments towards the adoption and deployment of the renewable energy sources in the industrial and commercial sectors is driving the growth of the renewable energy market. The government across the developed and developing economies is undergoing several regulatory changes and is offering subsidies to the corporate sector to adopt the renewable energy. The rising technological advancements are fueling the demand for the renewable energy sources as the costs of the renewable energy are declining.
With the rising investments in the industrialization and urbanization, the demand for the sustainable energy is growing significantly across the globe. The growing concerns related to the climate change and increasing pollution levels is driving the adoption of the renewable energy. At present, around 7% of the energy consumed is renewable energy across the globe. With rising investments in the solar, wind, and hydroelectric power infrastructure, the demand for the renewable energy is expected to foresee a burgeoning growth in the forthcoming future.
Asia Pacific garnered a market share of over 35% and dominated the global renewable energy market in 2021. Asia Pacific is witnessing huge FDIs, rising industrialization, rapid urbanization, and a rapid growth in the population. All these factors are propelling the demand for the electricity. The increased pollution levels in the region owing to the previous growth in industrialization and urbanization has forced the government to focus towards the adoption of the renewable, clean, and green energy sources. China is one of the largest producers of the bioelectricity, geothermal energy, wind energy, ands solar energy. China is the manufacturing hub of the world and is among the most populated countries. The demand for the clean energy is significantly high in China owing to the increased pollution levels. The demand for the renewable energy is rising significantly in India owing to the growing number of industrial and residential projects. Rajiv Gandhi Grameen Vidyutikaran Yojana was an initiative adopted by the Government of India for the electrification of rural areas in India. This type of government initiatives is expected to foster the growth of the Asia Pacific renewable energy market in the forthcoming years.
North America is anticipated to exhibit a significant growth rate in the renewable energy market during the forecast period. The government policies regarding clean fuel standards, biofuel production, tax credit extension, and US emission targets are the major factors that are expected to drive the growth of the market in this region. The growing consumer awareness regarding the benefits of using renewable energy is fueling the demand for the renewable energy in the residential sector.
Driver: Declining costs of the solar energy to foster market growth
It has been observed that there has been a decline of around 85% in the costs of the solar power in the past decade and the solar photovoltaic system has become one of the cost competitive resources. The solar-storage buildout, floating solar PV models, and community solar projects are anticipated to be the key trends in the emerging markets. The development of the storage for solar energies will help in improving the operational efficiencies and control costs. Furthermore, the expansion of the community solar projects in the developed markets like US is expected to significantly drive the growth of the renewable energy market during the forecast period.
Restraint: High capital investments
The development of new resource involves huge capital investments towards building new infrastructure. The high capital requirements ultimately increase the costs of the electricity from the renewable sources. Therefore, the high initial capital investments and lack of resources in several countries is playing a major role in hindering the growth of the renewable energy market.
Opportunity: Advancements in the technologies to reduce the cost
The increasing investments in the research and development and the techno logical advancements play a significant role in reducing the costs of the electricity from the renewable energy sources. The rising adoption of the grid technology is facilitating in reducing the costs, which is expected to foster the adoption of the renewable energy sources during the forecast period.
Challenge: Unfavorable climatic conditions in several countries
The climatic conditions are cold in several developed countries of North America and Europe. Due to this there is a lack of adequate sunlight that hinders the adoption of the solar energy and solar panels in the residential sector. This is a major challenge faced by the market players and the consumers.
The top companies are listed below:
➢ Xcel Energy Inc.
➢ National Grid Renewables
➢ Enel Spa
➢ The Tata Power Company Limited
➢ General Electric