Renewable energy is increasingly becoming popular in today's world. With climate change and global warming becoming more pressing concerns, the need for renewable energy sources has never been greater. The renewable energy market is a rapidly growing industry, with many opportunities for investors and businesses looking to capitalize on this trend. The worldwide renewable energy market was valued at US$ 1030.95 billion in 2022 and is predicted to exceed US$ 1,998.03 billion by 2030, with an 8.6% CAGR from 2022 to 2030.
What is renewable energy?
Renewable energy refers to the energy that is derived from natural resources that are replenished over time, such as sunlight, wind, rain, and geothermal heat. These sources of energy are considered renewable because they are naturally occurring and can be replenished over time, unlike non-renewable sources such as coal, oil, and natural gas, which are finite resources.
Factors driving the market growth
The global renewable energy market size was estimated at US$ 1030.95 billion in 2022 and is expected to hit over US$ 1,998.03 billion by 2030 with a registered CAGR of 8.6% from 2022 to 2030.
The renewable energy market is a rapidly growing industry that is expected to continue to expand in the coming years. According to a report by the International Energy Agency, renewable energy is expected to account for 80% of the growth in global electricity generation over the next decade. This growth is being driven by a combination of factors, including government incentives, technological advancements, and increasing public awareness of the need for clean energy.
One of the key drivers of growth in the renewable energy market is government incentives. Many governments around the world are offering incentives to encourage the development and use of renewable energy sources. These incentives can include tax credits, subsidies, and grants for research and development. In addition, many countries have set renewable energy targets, which require a certain percentage of their energy to come from renewable sources by a certain date.
Technological advancements are also playing a key role in the growth of the renewable energy market. Advances in technology have made renewable energy sources more efficient and cost-effective, making them more competitive with non-renewable sources of energy. For example, the cost of solar panels has dropped dramatically in recent years, making solar power a more viable option for many consumers and businesses. Moreover, increasing public awareness of the need for clean energy is driving demand for renewable energy sources. Many consumers and businesses are choosing to switch to renewable energy sources because they want to reduce their carbon footprint and support sustainable energy practices.
The increasing transition from fossil fuels towards sustainable sources of energy is driving the development of the industry. Growing advancement in renewable energy along with cost-effectiveness is expected to be one of the major factors adding to the industry's growth. Rising prices of fossil fuels and natural gas are shifting the industry towards sustainable resources.
Overall, the renewable energy market is a rapidly growing industry with many opportunities for investors and businesses. As governments around the world continue to offer incentives and set renewable energy targets, and as technological advancements continue to drive down the cost of renewable energy sources, we can expect to see continued growth in this important industry.
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Renewable Energy Market Insights
The current global energy crisis has made it even more urgent to move towards clean energy and has once again brought attention to the crucial role that renewable energy plays. In our revised prediction, pre-crisis policies result in stronger growth for renewable electricity. Moreover, by 2023, the reliance of the European Union's power sector on Russian natural gas might be reduced thanks to wind and solar PV.
In the meantime, in the absence of swift policy execution, it is too early to evaluate the potential impact of newly announced targets following the Russian invasion of Ukraine on our prediction for 2022 and 2023.
Notwithstanding ongoing pandemic-related supply chain issues, construction holdups, and record-high commodity prices for raw materials, annual renewable capacity additions reached a new record in 2021, rising 6% to approximately 295 GW.
Due to increasing commodity and freight prices, solar PV and wind costs are anticipated to remain higher in 2022 and 2023 than pre-pandemic levels. Nevertheless, because natural gas and coal costs have increased considerably more suddenly, their competitiveness actually increases.
In 2022, the capacity for renewable energy is predicted to grow by more than 8%, reaching over 320 GW. To make up for decreased hydropower and constant year-over-year wind additions, solar PV expansion is unable to fully offset growth in 2023 unless new rules are quickly put into place.
Asia Pacific to lead the market growth
Asia Pacific is anticipated to dominate the overall market growth. Based on regions, the market is segmented into Latin America, North America, Europe, Middle East, Africa, and Asia Pacific. China acquired the major share of the overall market in 2021. The rising population in various economies such as India along with increasing power demand is anticipated to propel the market. Moreover, the growing installation of various solar projects in China and India is anticipated to propel the industry demand. The growing investment by various economies such as India, Japan, and China is providing lucrative opportunities to the growth of the industry.
North America is likely to gain significant growth during the forecast period. Also, the industry's escalating competitiveness has aided in lowering production costs for electricity and expanding the selection of solar panels. Throughout the course of the forecast period, these elements are anticipated to increase the region's need for renewable energy. Throughout the forecast period, it is anticipated that factors such as rising concerns about greenhouse gas (GHG) emissions, energy costs, and requirements to reduce carbon footprint will fuel expansion.
Industrial segment led the market growth
The global market is further segmented into industrial, commercial, and residential segments based on applications. In 2021, the industrial sector held the largest market share, accounting for more than 62.40% of total revenue. The rise in utility projects and the expansion of the PV modules market in the industrial sector are both predicted to be fueled by the rising demand for clean electricity. In the United States in 2020, there will be approximately 37 GW of operating power plants and another 112 GW under construction, according to the Solar Energy Industries Association. Over the projected period, these elements are anticipated to fuel demand for solar PV panels in the industrial application segment.
Over the projection period, it is anticipated that the introduction of solar PV panels for residential applications will raise product demand. For instance, Solaria unveiled a black solar panel with a 430 W power output for residential use in September 2021. The new panel, designated PowerXT 430R-PL, measures 1,076 x 1,957 x 35 mm, weighs 21.3 kg, and has a power conversion efficiency of 20.40%. Commercial solar PV panels can be used to heat water in offices, businesses, and other buildings, pre-heat ventilation air, and power industrial facilities in off-grid or remote regions. They have a lifespan of over 15 to 20 years. The quick uptake of PV modules in corporate buildings, lodging facilities, and healthcare facilities is anticipated to stimulate product demand across the various sector.
Market Share Insight
The key players in the sector are concentrating on technological developments and innovations to reduce the cost of producing renewable energy. Also, industry participants are putting many strategic initiatives into practise in order to increase their market share during the ensuing years. For instance, in July 2022, ACCIONA signed a contract with FORTIA under which FORTIA will deliver more than 1TWh of renewable electricity physically over a five- to ten-year period, as well as an energy management platform for key industrial clients. The following are a few of the major players in the worldwide market for renewable energy:
- Enel Spa
- General Electric
- Schneider Electric
- Siemens Gamesa Renewable Energy, S.A.
- Suzlon Energy Ltd.
- Tata Power
- Xcel Energy, Inc
Segments Covered in the Report
- Wind Power
- Hydroelectric Power
- Solar Power
- Bio Energy
By End User
- Chemicals & Petrochemicals
- Oil & Gas
- Food & Beverage
- North America
- South Korea
- Latin America
- Rest of Latin America
- Middle East & Africa (MEA)
- North Africa
- South Africa
- Rest of the Middle East & Africa
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