Renewable Energy Transition Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The renewable energy market is expected to grow at a CAGR of 18.6% from 2024 to 2035. The CAGR for the period 2025–2035 is 9.52%, indicating a strong upward trend. The growth is mainly driven by the growing need for sustainable energy solutions. In addition, the transition to renewable energy is driven by a combination of regulatory support, technological advancement, and the growing awareness of climate change. This awareness is compelling governments and businesses to invest in cleaner energy alternatives. This is further facilitated by the declining cost of solar and wind power and the development of energy storage solutions and smart grids that enhance energy efficiency. The major players in the industry, such as NextEra Energy, Siemens-Gamesa, and Tesla, are actively involved in strategic initiatives, such as collaborations and new investments in order to expand their renewable energy portfolio. These include the development of new battery technology by Tesla and the deployment of large-scale solar projects by NextEra Energy.

Regional Market Size

Regional Deep Dive

The market for the transition to renewable energy is gaining momentum in several regions, driven by the world-wide trend towards sustainable energy solutions. In North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America, the market is characterized by a combination of political support, technological development, and an increasing demand for clean energy. Each region presents its own opportunities and challenges, influenced by local legislation, economic conditions, and the cultural acceptance of clean energy.

Europe

• Fortunately, the European Union's Green Plan, which aims to make Europe the first climate-neutral continent by 2050, has resulted in a huge influx of investment in green energy and in particular in offshore wind farms in countries such as Denmark and the United Kingdom.
• Germany's Energiewende policy continues to influence the market, with a focus on phasing out coal and increasing the share of renewables in the energy mix, leading to innovations in energy storage and grid management technologies.

Asia Pacific

• China remains a global leader in renewable energy production, with significant investments in solar and wind energy, supported by government initiatives like the 14th Five-Year Plan, which emphasizes clean energy development.
• India's ambitious target of achieving 450 GW of renewable energy capacity by 2030 has led to the establishment of large-scale solar parks and wind farms, with companies like Adani Green Energy and ReNew Power playing pivotal roles.

Latin America

• Brazil is leading the way in renewable energy in Latin America, with a strong emphasis on hydropower and wind energy, supported by government policies that promote sustainable energy sources.
• Chile's commitment to generating 70% of its electricity from renewable sources by 2050 has spurred investments in solar energy, making it one of the top countries for solar energy generation in the region.

North America

• During the administration of Joe Biden, a carbon-free power sector was promised by 2035. This led to increased investment in new projects, especially in the solar and wind sectors, and to companies such as NextEra Energy and Duke Energy.
• The goal of California to be entirely supplied with energy from renewable sources by 2045 has led to many changes in its regulatory system. The Californian Renewable Portfolio Standard (RPS) will promote innovation and investment in renewable energy sources.

Middle East And Africa

• The UAE's Masdar initiative is at the forefront of renewable energy development in the Middle East, focusing on solar and wind projects, and aims to diversify the energy mix away from oil dependency.
• South Africa's Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) has successfully attracted private investment in renewable energy, leading to a significant increase in solar and wind capacity in the region.

Did You Know?

“As of 2023, renewable energy sources accounted for nearly 30% of global electricity generation, with solar and wind being the fastest-growing segments.” — International Energy Agency (IEA)

Segmental Market Size

The transition to renewable energy is a growth industry. The emphasis on sustainable development and the necessity of reducing carbon emissions are the driving forces behind this growth. There are also regulatory drivers, such as the need to achieve zero-emissions targets, and technological developments that increase the efficiency of renewable energy sources. In Europe, the Green Deal and the American Inflation-Proofing Act have a significant impact on the market and on investment in clean energy. In the present phase of the transition to clean energy, the market is in a period of scaling up, with notable leaders like Tesla in the solar sector and rsted in offshore wind energy setting the pace in terms of innovation and implementation. The main applications are domestic solar systems, large-scale wind farms and energy storage solutions, which are increasingly being integrated into smart grids. In addition to these trends, macro-economic factors such as the worldwide drive for decarbonisation and the effects of climate change will also spur on the market. The development of energy-storage systems and artificial intelligence in the management of energy are important for the future of the market.

Future Outlook

The renewable energy transition market is expected to grow at a substantial CAGR of 9.52% from 2024 to 2035. The market is driven by a worldwide shift towards sustainable energy solutions, resulting from the growing regulatory support, technological advancements, and the growing awareness of consumers towards climate change. In 2035, the share of renewables in the global energy mix is expected to surpass 50%, with solar and wind energy taking the lead owing to the decreasing costs and scalability. The government initiatives aimed at reducing carbon emissions, such as carbon taxes and the implementation of renewable portfolio standards, are driving the transition. Also, the innovations in energy storage and smart grids are enabling the renewable energy sources to compete with the conventional fossil fuels. The emerging trends, such as the decentralization of energy production and the integration of artificial intelligence in energy management systems, are also expected to have a significant impact on the market. The growing demand for sustainable solutions from the business and the consumers is expected to drive the growth of the renewable energy transition market.