How Big is the Renewable Energy Market?

The renewable energy market is huge and expanding rapidly, valued at over $1 trillion in 2024, with projections reaching $2 trillion to $4.6 trillion by 2030 to 2035. The market is driven by a positive CAGR (around 9% to 16%) due to net zero efforts, supportive policies, and falling costs. Key segments include solar and wind, with Asia-Pacific (especially China) leading the market. Major global players include Iberdrola, NextEra, and Siemens.

Understanding the Global Renewable Energy Market Size

The global renewable energy market has emerged as one of the most dynamic and fastest-growing sectors in the world economy. According to recent industry reports, the renewable energy market size was estimated at USD 1.51 trillion in 2024 and is projected to reach USD 4.86 trillion by 2033, demonstrating a compound annual growth rate (CAGR) of 14.9%. Multiple research firms foresee different valuations from USD 1.08 trillion to USD 1.74 trillion in 2024, with all forecasts pointing to exponential growth through the next decade.

The renewable energy market value continues to surge as countries worldwide commit to aggressive decarbonization targets. The International Energy Agency (IEA) has forecast that renewable energy will provide almost half of the world’s electricity demand by 2030, and this is a game-changing transition in the way the world produces power. This growth trajectory makes renewables the mainstay of the global energy transition, with investments pouring into solar and wind, as well as hydro and in new technologies such as ocean energy.

Existing Market Valuation and Outlook

Renewable Energy Market Growth: Key Drivers

Net-Zero Commitments and Climate Goals

Global efforts to combat climate change have fueled dramatic growth in the renewable energy market. The COP28 commitment to triple renewable energy capacity by 2030 means over 5,500 GW of new renewable energy capacity must be added to the grid, nearly three times the growth seen between 2017 and 2023. Achieving this ambitious target will require $4.5 trillion to $5.5 trillion in investments through 2030, creating unprecedented opportunities across the value chain.

Strengthening of Policy Frameworks

Government regulations and incentives are continuing to drive the expansion of the markets. Policies such as the U.S. Inflation Reduction Act, the EU’s REPowerEU initiative, as well as incentives linked to Asia-Pacific production have put a collective effort to boost a forecasted increase of 35% in national solar capacity. The EU’s fast-track permitting sets a limit of a maximum of two years, with the total number of renewable installations doubling for Spain in 2024 after the implementation of streamlined processes.

Power Purchase Agreements by Companies

Corporate power purchase agreements (PPAs) secured 46 GW in 2023, with another 19 GW added in Europe in 2024, propelling renewables to the forefront of energy financing. Technology firms are using virtual PPAs to hedge against price risk. Today, voluntary corporate demand accounts for about half of new U.S. utility-scale capacity. This trend lowers average capital costs and speeds up project financing, further expanding the renewable energy industry.

Falling Technology Costs

The decreasing costs of solar photovoltaics, wind turbines, and battery storage have made renewables the most affordable electricity option in most markets. Advancements and economies of scale have driven solar panel prices to historic lows, while wind turbine manufacturers are also benefiting from scale. These falling costs create a cycle of increased investment and faster deployment.

Renewable Energy Market Forecast Through 2035

Short-Term Outlook (2025-2027)

The renewable energy market forecast indicates strong near-term growth for the renewable energy market, expanding from $1.74 trillion in 2025 to over $2 trillion by 2027. Rising demand from hyperscale data centers is driving solar and wind procurement, especially in the Nordics and near Ireland. Global electricity demand is expected to reach 945 TWh by 2030, nearly three times the 2024 level. Microsoft’s 30 MW wind power agreement at Lenalea highlights this accelerating trend.

Medium-Term Projections (2028-2030)

By 2030, renewables are expected to make up 46% of global electricity generation, up from 30% in 2023. More than 5,500 GW of new renewable power capacity could be added between 2024 and 2030, equivalent to the combined capacity of China, the European Union, India, and the United States. Solar and wind will drive this explosive growth, with solar energy maintaining the biggest share at 42%.

Long-Term Vision (2031-2035)

Long-term forecasts estimate the global renewable energy market will reach between $2.88 trillion and $7.28 trillion by 2033 to 2035, depending on methodology and scope. Massive green hydrogen projects are driving capacity additions in the MENA region and Australia. For example, MENA projects plan to use 242 GW of renewables for electrolysis by 2030. This positions the region as a future hydrogen export powerhouse, fueling further expansion of renewable infrastructure.

Dominant Technologies and Market Segments

Solar Energy Dominance

Solar power is now the largest part of the renewable energy market, accounting for 42% of the total. In 2024, the solar market reached about $420 billion to $500 billion, with 1,864 GW of installed capacity. Utility-scale projects benefit from economies of scale, while rooftop solar is expanding through third-party leasing programs that lower upfront costs. With a 15% to 18% annual growth rate, solar continues to advance thanks to ongoing technology improvements and falling photovoltaic costs.

Wind Power Expansion

Wind energy is the second largest segment of renewable technologies, making up 25% to 30% of the market and valued at $350 billion to $420 billion in 2024. About 80% of this market is onshore and 20% is offshore. Leading markets include China (520 GW), the U.S. (96.4 GW), and Germany (59.3 GW). European manufacturers are moving toward digital service contracts and recyclable blades to stay competitive with lower-cost Asian companies.

Emerging Ocean Energy

Ocean energy, currently at just 3 GW worldwide, is expected to exceed 20 GW by 2030, making it the fastest-growing sector. Wave-converter arrays like Orbital’s O2 turbine in Scotland achieve 80% availability, and tidal energy now bids at under $120 per MWh. Predictable marine output helps balance the variable nature of solar and wind, making ocean resources a key support for the broader renewable energy market.

Hydropower and Bioenergy

Hydroelectric power made the biggest contribution among traditional renewables in 2024. Bioenergy continues to grow, thanks to innovations in biogas and waste-to-energy, such as Martin Energy Group’s acquisition of Chomp to expand biogas capabilities. Geothermal energy is also gaining momentum in regions with favorable geology, especially in North America and Asia-Pacific.

Markets – Regional Analysis and Opportunities

Asia-Pacific: The Market Leader

Asia-Pacific is the largest regional market, accounting for 54.1% of global capacity. China alone contributed 64% of new additions in 2024, driven by utility-scale solar and record wind installations. Industry reports estimate the Asia-Pacific renewable energy market at about $1.5 trillion in 2025, projected to reach $5.79 trillion by 2035 with a 14% CAGR. India’s production-linked incentives and rooftop subsidies could quadruple domestic installations to 62 GW by 2030.

North America: Policies that Drive Growth

North America accounts for 20-25% of the total global market, with the 2024 market size standing at around $280-375 billion. The U.S. Inflation Reduction Act gives impetus for a predicted 35% increase in national solar power capacity by 2025. Wind and solar combined accounted for a record 17% of total U.S. electricity generation in 2024, ripping away coal power’s position for the first time in history. Key states such as California, Texas, Iowa, Kansas, and Oklahoma are contributing to key capacity additions.

Europe: Leadership of Regulatory

Europe aims for 42.5% renewable energy by 2030 under the REPowerEU plan, which means 1,200 GW of installed capacity. Spain doubled its capacity in 2024 thanks to fast-track permits and corporate agreements. The Nordics are attracting hyperscale data centers due to high wind demand and strong project bankability. However, high interest rates and competition from low-cost Chinese turbines are putting pressure on local manufacturers.

South America: Most Rapidly Growing Region in the World

South America is the fastest-growing region, boasting an 18.5% compound annual growth rate. Brazil added 14 GW of solar and wind capacity in 2024. Colombia’s auction pipeline, Chile’s merchant solar fleet, and Argentina’s hybrid wind-solar projects all showcase diverse regulatory approaches. Flexible hydropower and bilateral corporate PPAs help manage variable output, keeping investor interest high.

Middle East and Africa: New Potential

The Middle East and North Africa (MENA) region is rapidly developing solar mega-projects to support hydrogen export plans. Saudi Arabia’s latest tender includes a 3.7 GW shortlist, featuring the 2 GW Al Sadawi project. South Africa is setting records in utility-scale solar installations to address load-shedding, while Egypt is expanding the Benban solar complex. Regional grids are integrating concentrated solar power in the evenings to boost energy diversification.

Important Market Players and Competitive Scenario

Industry Leaders

Major companies driving the renewable energy industry include NextEra Energy, Iberdrola, Enel, Orsted, Vestas Wind Systems, Siemens Gamesa, Canadian Solar, First Solar, Brookfield Renewable Partners, and EDP Renewables. These global leaders hold significant market share with integrated offerings, combining generation, storage, and software solutions.

Manufacturing Concentration

Solar manufacturing remains highly concentrated, with the top five Chinese companies producing about 60% to 65% of the world’s modules. Western governments are responding with domestic manufacturing tax credits, including programs in the U.S. Inflation Reduction Act. However, it will take several years for new factories to reach gigawatt-scale production.

Making a Difference: Innovation and Differentiation

Innovation is the key competitive differentiator. AI-powered siting tools like REplace can cut greenfield site evaluation from months to seconds. Battery energy storage is projected to reach over 170 GW by 2030, creating a $120 billion to $150 billion market. New technologies like long-duration batteries, modular electrolyzers, and smart inverters are expanding the industry’s value and competitiveness.

Mergers and Acquisitions

Mergers and acquisitions in the energy transition sector totaled $497 billion in 2024, reflecting a maturing market. Deal activity is shifting from single-asset purchases to full platform acquisitions, with notable examples like UbiQD’s acquisition of BlueDot Photonics for advanced photovoltaic materials. This consolidation trend strengthens industry leaders and creates opportunities for specialized innovators.

Challenges Affecting Market Expansion

Grid Infrastructure Limitations

Grid congestion and curtailment risks threaten growth, especially in Texas’s ERCOT market and China’s Inner Mongolia province. Curtailment in ERCOT is projected to rise 29% in 2024, reaching 3.4 million MWh. Over 1 TW of solar-plus-storage is waiting in U.S. interconnection queues. Battery storage, dynamic line rating, and transmission expansion can help, but battery deployment is lagging behind new installations.

Regulatory and Permitting Delays

Despite improvements such as the fast-track permitting of the EU’s REPowerEU, a lack of staff and conflicting spatial planning at a regional scale continues across regions. Interconnection queues and long approval processes sometimes put projects on hold for years, which raises costs and disheartens investors.

End-of-Life Management

Landfill restrictions on composite turbine blades in Germany, along with proposed regulations in France, are pushing companies toward costly recycling solutions. Global blade waste could reach 40 million tons by 2050, and current mechanical recycling methods produce only low-value material. Advanced pyrolysis is also expensive. These end-of-life issues raise the total life-cycle costs for wind energy developers.

Storage Challenges and Integration Challenges

Lack of long-duration storage slows high variable renewable energy penetration in Southeast Asia and other emerging markets. While battery prices keep coming down, deployment needs to increase to allow more renewable penetration rates and a stable grid.

Outlook for Future and Areas for Investment

The renewable energy market holds exceptional investment possibilities as the world shifts to renewable sources of energy. Required investments of $4.5-5.5 trillion through 2030 to meet the COP28 tripling goal will flow into manufacturing, project development, grid infrastructure, and energy storage. Residential sector expansion shows particular promise, with the renewable energy market worth approximately $280-375 billion in 2024 in this segment alone, driven by rooftop solar, small wind systems and energy storage solutions.

Corporate demand for clean energy continues accelerating, and technology companies, manufacturers, and commercial enterprises are looking to purchase long-term PPAs to support sustainability commitments. The commercial and industrial sector reached 390 GW in 2024 and will reach 860 GW by 2030, driven by a compound annual growth rate (CAGR) of 17.2%, as businesses tap behind-the-meter energy systems to avoid the peak tariff and make progress on their ESG targets.

Nexus Expert Research: Your Renewable Energy Intelligence Partner

Nexus Expert Research offers end-to-end market analysis and strategic insights to decision-makers doing business in the rapidly changing renewable energy market. Our research empowers VCs, startups, and businesses to find high growth opportunities, competitive dynamics, and make data-driven investment decisions. The multi-trillion dollar expansion of the renewable energy sector through 2035 explains new opportunities for forward-thinking organizations in a position to benefit from this global transformation.

Get in touch with Nexus Expert Research today and get the competitive intelligence and market insight that makes for success in the renewable energy industry. Contact us to bring actionable strategies customized to your business objectives.