Renewable Energy Market Set To Hit USD 4,393.6 Bn by 2034, At a CAGR of 12.9%

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Aboli More

Updated · Jan 29, 2025

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Introduction

The global renewable energy market is experiencing rapid growth, driven by the increasing demand for cleaner and more sustainable energy sources. As concerns over climate change and environmental degradation intensify, governments, businesses, and consumers are shifting towards renewable solutions. The global renewable energy market is expected to reach a value of USD 4,393.6 billion by 2034, up from USD 1,305.8 billion in 2024, growing at a robust compound annual growth rate (CAGR) of 12.9% during the forecast period from 2023 to 2033.

This growth is primarily fueled by the expansion of wind, solar, and hydroelectric power capacity, along with advancements in energy storage technologies and the falling costs of renewable energy generation. However, the industry also faces challenges such as the intermittency of renewable sources, high initial investment costs, and regulatory hurdles in some regions. Despite these obstacles, key developments such as the integration of artificial intelligence in grid management, breakthroughs in energy storage, and increasing investment in offshore wind energy are providing significant momentum to the market.

Additionally, supportive government policies and initiatives, including subsidies, tax incentives, and renewable energy targets, are playing a crucial role in accelerating the adoption of renewable energy worldwide. With growing focus on reducing carbon footprints and achieving sustainability goals, the renewable energy market is poised for significant expansion in the coming decade.

Key Takeaways

  • The Global Renewable Energy Market is expected to be worth around USD 4,393.6 Billion by 2034, up from USD 1305.8 Billion in 2024, and grow at a CAGR of 12.9% from 2025 to 2034.
  • Hydropower dominates the renewable energy market, accounting for 44.3% share globally.
  • On-grid renewable energy solutions lead, comprising 88.3% of total installations.
  • The industrial sector drives renewable adoption, contributing 47.4% of market demand worldwide.
  • In 2024, Asia-Pacific dominated the Renewable Energy Market with 45.2%, generating USD 591.5 billion.

Renewable Energy Statistics

  • The global renewable energy capacity reached approximately 3,000 GW, marking a significant milestone in the sector, with rapid adoption driven by technological advancements, policy support, and growing environmental concerns, highlighting a major shift towards clean energy sources worldwide to meet rising electricity demand and carbon reduction goals.
  • Asia added a record 450 GW of new renewable energy capacity in 2024, reinforcing its position as a global leader in clean energy expansion, with major contributions from China, India, and Southeast Asia, fueled by strong government policies, large-scale solar and wind projects, and increasing private sector investments.
  • India’s total renewable energy capacity reached 200 GW in November 2024, reflecting rapid growth in solar, wind, and hydro power, positioning the country among the top renewable energy markets globally, driven by ambitious government policies, corporate investments, and international partnerships aimed at clean energy transition.
  • Renewable energy accounted for 46.3% of India’s total installed power capacity in 2024, reflecting a steady shift away from fossil fuels, driven by policy reforms, declining costs of renewable technologies, and increasing industrial and residential adoption of clean energy sources to meet sustainability targets.
  • India secured $386 billion in financial commitments for renewable energy expansion as of September 2024, demonstrating strong investor confidence, with funds allocated for solar, wind, energy storage, and grid modernization projects to accelerate the transition to a sustainable power ecosystem.
  • India is set to add 35 GW of new solar and wind capacity by March 2025, reinforcing its renewable energy leadership, supported by government incentives, large-scale projects, and growing corporate investments aimed at meeting the country’s clean energy targets.
  • The global renewable energy sector is expected to expand by 2,400 GW between 2022 and 2027, covering over 90% of the total electricity capacity growth worldwide, driven by strong policy support, declining costs, and technological advancements in clean energy solutions.
  • Renewable energy is projected to account for 90% of global electricity capacity growth by 2027, as countries accelerate clean energy adoption to meet climate goals, reduce dependence on fossil fuels, and transition to more sustainable and resilient power systems.
  • India aims to achieve 500 GW of renewable energy capacity by 2030, requiring rapid expansion in solar, wind, and hybrid energy systems, backed by policy incentives, private sector investments, and international collaborations to meet its ambitious clean energy goals.
  • India needs to increase its renewable energy capacity by approximately 30% annually to reach its 500 GW target by 2030, requiring accelerated project execution, enhanced grid infrastructure, policy-driven market growth, and increased investments in energy storage solutions.

Report Scope

Report FeaturesDescription
Market Value (2024)USD 1,305.8 Billion
Forecast Revenue (2034)USD 4,393.6 Billion
CAGR (2025-2034)12.9%
Segments CoveredBy Product (Hydropower, Wind Power, Solar Power, Bioenergy, Others), By Deployment (On-Grid, Off-Grid), By Application (Industrial, Residential, Commercial)
Competitive LandscapeABB, Acconia S.A., Enel Spa, General Electric, Innergex, Invenergy, Schneider Electric, Siemens Gamesa Renewable Energy, S.A., Suzlon Energy Ltd., Tata Power, ACCIONA, EDF Renewables, Xcel Energy Inc., Enel Green Power S.p.A., National Grid Renewables

Emerging Trends

  • Decentralized Energy Systems: One of the most prominent trends in the renewable energy sector is the shift toward decentralized energy production. This is primarily driven by the growing adoption of small-scale solar and wind installations, enabling individuals and businesses to generate their own energy. With the integration of smart grid technologies, energy can be produced and consumed locally, reducing transmission losses and enhancing grid stability. The International Energy Agency (IEA) forecasts that by 2026, the global capacity of solar PV will rise to 1,000 GW, highlighting the strong growth in decentralized energy systems.
  • Energy Storage Solutions: As Renewable Energy Market generation (particularly solar and wind) is intermittent, energy storage solutions have become a key focus. Battery storage technologies, such as lithium-ion batteries, are advancing, making it possible to store excess energy generated during peak production hours for later use. This development is critical to addressing the challenges of grid stability and reliability. According to a report by the International Renewable Energy Agency (IRENA), the global market for battery storage is expected to grow at an annual rate of 25% through 2030.
  • Green Hydrogen: Green hydrogen, produced using renewable energy sources like wind or solar, is gaining traction as a clean alternative to fossil fuels, especially in sectors that are difficult to decarbonize, such as heavy industry and transportation. Hydrogen is expected to play a pivotal role in reducing carbon emissions, with several countries and companies making significant investments in its development. According to the Hydrogen Council, green hydrogen could account for 18% of global energy consumption by 2050.
  • Offshore Wind Energy: Offshore wind energy is emerging as a game-changer, particularly in countries with expansive coastlines. The development of large-scale offshore wind farms is accelerating, offering a more consistent and powerful energy source compared to land-based wind turbines. As turbine technology improves and the cost of offshore wind energy continues to fall, this sector is becoming increasingly competitive with traditional energy sources. A report by the Global Wind Energy Council (GWEC) predicts that the offshore wind market will grow by over 15% annually between 2020 and 2030.
  • Corporate Renewable Energy Procurement: There is a rising trend of corporations committing to renewable energy procurement through power purchase agreements (PPAs). Many large corporations, including Google, Amazon, and Microsoft, are aiming for 100% renewable energy usage. This trend is not only a response to increasing pressure to meet sustainability goals but also reflects a growing recognition of the cost-effectiveness of renewable energy. According to the Renewable Energy Buyers Alliance (REBA), global corporate renewable energy purchases have increased by 20% annually in recent years.
  • Artificial Intelligence (AI) and Big Data: The integration of AI and big data into renewable energy management is enhancing efficiency and optimizing performance. AI algorithms are being used for predictive maintenance, load forecasting, and to improve energy storage management. This allows for better grid integration and the efficient use of renewable resources. According to a study by PwC, AI could contribute to up to $1.4 trillion in cost savings for the global energy sector by 2030.

Use Cases

  • Residential Solar Power: One of the most common use cases for renewable energy is the adoption of solar power in residential settings. Homeowners are increasingly installing solar photovoltaic (PV) systems on rooftops to generate their own electricity, reduce utility bills, and decrease their carbon footprint. According to the U.S. Energy Information Administration (EIA), the number of residential solar installations in the U.S. grew by over 20% from 2019 to 2020, driven by falling solar panel costs and favorable policies such as tax incentives.
  • Electric Vehicles (EVs) and Charging Stations: The rise of electric vehicles (EVs) presents a significant use case for renewable energy. EVs require charging infrastructure, and many cities and companies are increasingly powering EV charging stations with renewable energy. This integration helps to reduce emissions associated with transportation while supporting the transition to a cleaner energy grid. According to the International Energy Agency (IEA), over 10 million electric cars were on the road globally in 2020, and many of them are powered by renewable energy sources like solar and wind.
  • Renewable-Powered Data Centers: With the growing demand for data and cloud services, data centers consume vast amounts of energy. Many major tech companies, including Google, Apple, and Microsoft, have committed to running their data centers on 100% renewable energy. By using renewable sources like wind, solar, and hydropower, these companies are significantly reducing their carbon footprints. Microsoft’s commitment to being carbon-negative by 2030, which includes renewable energy for its data centers, is a leading example of how the tech industry is leveraging clean energy to meet sustainability targets.
  • Agriculture and Solar-Powered Irrigation: Renewable energy market is increasingly being used in the agriculture sector to power irrigation systems, particularly in remote areas where access to the grid is limited. Solar-powered irrigation pumps offer a cost-effective and sustainable solution for farmers, helping them to improve water management and crop yields. According to the International Renewable Energy Agency (IRENA), solar-powered irrigation systems are becoming more widespread in regions like Sub-Saharan Africa, where farmers rely on these systems to mitigate water scarcity.
  • Industrial Decarbonization: Industries such as steel, cement, and chemicals are some of the most challenging sectors to decarbonize due to their high energy demand and reliance on fossil fuels. Renewable energy is playing a crucial role in this process by providing clean alternatives to fossil fuel-based energy sources. For instance, the Swedish steel producer SSAB has successfully demonstrated a method of producing steel using hydrogen instead of coal, powered by renewable electricity. This process, known as “HYBRIT,” is a groundbreaking use case for decarbonizing heavy industries and reducing carbon emissions in the production of steel.
  • Off-Grid Communities: In many developing countries, particularly in rural or remote areas, access to electricity is limited or nonexistent. Renewable energy, especially solar power, is being used to provide off-grid communities with affordable and reliable electricity. Solar home systems (SHS), solar mini-grids, and wind-powered solutions are improving the quality of life in such areas by powering homes, schools, health clinics, and businesses. According to the World Bank, nearly 1 billion people around the world still lack access to electricity, and renewable energy solutions are becoming a key enabler for expanding energy access.

Major Challenges

  • Intermittency and Reliability: One of the primary challenges of renewable energy, particularly solar and wind power, is their intermittent nature. Both sources are weather-dependent and produce energy only when the sun is shining or the wind is blowing. This can lead to periods of low energy generation, especially during cloudy days or calm weather. To address this, large-scale energy storage solutions, such as batteries, are required to store excess energy for use during periods of low generation. According to the International Energy Agency (IEA), energy storage technologies must scale rapidly to support the global energy transition and improve grid reliability.
  • High Initial Investment Costs: Although renewable energy technologies are becoming more cost-competitive in terms of operational expenses, the upfront capital required for installation and infrastructure can still be significant. For instance, installing solar panels, wind turbines, and building out necessary grid infrastructure requires substantial investment. In many developing countries, these initial costs remain a barrier, despite the long-term cost savings associated with renewable energy. According to the World Economic Forum (WEF), while the cost of renewables has fallen dramatically, financing these technologies remains a challenge for some regions.
  • Grid Integration and Infrastructure: Integrating renewable energy into existing energy grids presents a technical challenge, especially as renewable generation fluctuates. Traditional grids were designed for a consistent, centralized energy flow from large power plants. As renewable energy sources like wind and solar are decentralized and variable, the grid needs to be modernized to accommodate this new type of energy flow. This includes building smart grids, improving transmission infrastructure, and implementing advanced grid management technologies. A report by the U.S. Department of Energy emphasizes the need for extensive grid modernization to ensure reliable renewable energy integration.
  • Land Use and Environmental Impact: Although renewable energy sources like wind and solar are far cleaner than fossil fuels, they still have environmental impacts. For example, large solar farms require significant land area, and wind turbines can affect local wildlife, particularly bird populations. In some regions, these environmental concerns have led to opposition from local communities and environmental groups. Balancing renewable energy development with environmental preservation is an ongoing challenge. The U.S. National Renewable Energy Laboratory (NREL) has published research on the land-use considerations necessary for scaling renewable energy without causing harm to ecosystems.
  • Energy Storage Limitations: While battery storage technologies are advancing, current storage solutions are still not sufficient to fully address the intermittency of renewable energy on a large scale. The energy density, cost, and lifecycle of existing batteries are limiting factors. Technologies like pumped hydro storage, compressed air energy storage, and other forms of long-duration storage are being explored, but these solutions require further research and development. According to the International Renewable Energy Agency (IRENA), energy storage capacity must significantly increase to keep pace with the growing adoption of renewable energy.

Market Growth Opportunities

  • Expansion of Solar Power: Solar energy remains one of the most promising growth opportunities within renewable energy. With falling costs for solar panels and advancements in photovoltaic technology, solar power is becoming increasingly affordable and accessible. A key opportunity lies in expanding solar installations in residential, commercial, and industrial sectors. According to the International Energy Agency (IEA), the global solar PV market is expected to grow by 17% annually through 2026, driven by declining costs, government incentives, and increased grid parity in many regions.
  • Offshore Wind Development: Offshore wind energy presents one of the largest growth opportunities within the renewable energy sector, particularly for countries with vast coastlines. Offshore wind farms can generate significantly higher capacity than onshore wind farms due to stronger and more consistent winds. As turbine technology improves and costs continue to fall, offshore wind is expected to see rapid expansion. The Global Wind Energy Council (GWEC) projects that the offshore wind market will grow by over 15% annually between 2020 and 2030.
  • Green Hydrogen Production: Green hydrogen, produced from renewable energy sources such as wind or solar, is rapidly gaining attention as a viable solution for decarbonizing sectors that are difficult to electrify, such as heavy industry and long-haul transportation. With countries like Germany, Japan, and Australia investing heavily in green hydrogen infrastructure, this sector presents a major growth opportunity. According to the Hydrogen Council, green hydrogen could contribute up to 18% of global energy consumption by 2050.
  • Energy Storage and Battery Technologies: The increasing demand for renewable energy is driving a corresponding need for efficient energy storage solutions to address intermittency. The growth of energy storage technologies, such as lithium-ion batteries and emerging solutions like solid-state batteries, presents a significant opportunity. Battery storage systems can help store excess energy generated from renewable sources, ensuring a stable and reliable power supply. According to the U.S. Department of Energy (DOE), the energy storage market is projected to grow at an annual rate of 30% over the next decade, driven by advancements in battery technologies and declining costs.
  • Corporate Renewable Energy Procurement: More companies are committing to sustainability goals, including achieving 100% renewable energy usage. This trend is creating a growing demand for renewable energy, particularly in the form of power purchase agreements (PPAs) and corporate renewable energy procurement. Large companies like Google, Amazon, and Microsoft are leading the charge in shifting their operations to renewable energy. According to the Renewable Energy Buyers Alliance (REBA), corporate renewable energy purchases have increased by 20% annually, creating a robust market for renewable energy projects.

Top Key Players in the Market

  • ABB
  • Acconia S.A.
  • Enel Spa
  • General Electric
  • Innergex
  • Invenergy
  • Schneider Electric
  • Siemens Gamesa Renewable Energy, S.A.
  • Suzlon Energy Ltd.
  • Tata Power
  • ACCIONA
  • EDF Renewables
  • Xcel Energy Inc.
  • Enel Green Power S.p.A.
  • National Grid Renewables

Recent Developments

In 2024, ABB reported securing contracts worth over $2 billion in renewable energy projects, which include providing electrical systems for large-scale offshore wind farms and energy storage installations. Their partnership with companies like Vestas and Ørsted further underscores ABB’s critical role in offshore wind development, with ABB’s systems supporting more than 40 gigawatts of wind power globally.

In 2024, Acciona continued to focus heavily on expanding its renewable energy portfolio, particularly in wind and solar power. The company now operates over 11,000 MW of renewable energy capacity globally, with wind power accounting for around 8,000 MW and solar power contributing more than 3,000 MW.

In 2024, Enel continued to expand its renewable energy capacity, focusing on wind, solar, and hydroelectric power. The company now operates more than 56,000 MW of renewable energy globally, making it one of the world’s largest renewable energy producers. In 2024 alone, Enel added over 2,500 MW of new renewable capacity, including significant investments in solar energy projects in Latin America and wind farms in the United States.

In 2024, GE secured contracts worth over $2 billion in renewable energy projects, including the supply of wind turbines for offshore wind farms in Europe and North America. One of GE’s key achievements in 2024 was the launch of its new offshore wind turbine, the Haliade-X, which has a capacity of 14 MW per unit, marking a significant step forward in offshore wind technology.

In 2024 Innergex, the company’s renewable energy capacity reached over 4,000 MW, primarily driven by its 2,400 MW hydroelectric plants and expanding wind and solar projects. Innergex invested more than CAD 1.2 billion in new renewable energy projects in 2024, including the development of a 200 MW solar farm in the U.S. and a 150 MW wind farm in Europe. The company has been focused on diversifying its energy mix, and in 2024, it secured long-term power purchase agreements (PPAs) for over 1,000 MW of renewable energy, which is expected to generate stable revenue streams.

In 2024 Schneider Electric’s renewable energy division saw strong growth, with over 2,500 MW of renewable capacity being managed through its digital energy platforms. In 2024, the company secured over €800 million in contracts, focusing on energy management solutions for wind and solar power plants. Schneider Electric has also focused heavily on decarbonization, aiming to help businesses and utilities achieve net-zero emissions by 2050 through its EcoStruxure platform, which optimizes the performance of renewable assets.

Conclusion

Renewable energy is no longer just an alternative to traditional energy sources; it is rapidly becoming the cornerstone of global energy strategies. With advancements in technologies like solar, wind, energy storage, and green hydrogen, the sector is poised for substantial growth. As governments, corporations, and individuals commit to reducing carbon footprints and meeting sustainability goals, the demand for clean energy solutions is accelerating. While challenges such as intermittency, grid integration, and high initial costs remain, ongoing innovations, policy support, and global cooperation will play a pivotal role in overcoming these barriers.

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