Renewable Energy Certificate (REC) Market Poised for Strong Growth Driven by Green Demand

According to the latest research by InsightAce Analytic, the Renewable Energy Certificate (REC) Market is valued at USD 25.3 Bn in 2024 , and it is expected to reach USD 69.1 Bn by the year 2034, with a CAGR of  10.8% during the forecast period of 2025-2034.

Green tags, renewable energy credits, and tradable renewable certificates are alternative designations for Renewable Energy Certificates (RECs), which represent intangible, tradable commodities that certify the generation of one megawatt-hour (MWh) of electricity from qualified renewable energy sources in the United States. When RECs are derived exclusively from solar energy, they are referred to as Solar Renewable Energy Certificates (SRECs).

The global demand for electricity continues to rise, prompting governments to implement regulatory frameworks mandating businesses to meet specific renewable energy targets. This regulatory push, combined with increased adoption of decentralized renewable energy technologies—such as rooftop solar systems, micro wind turbines, and small-scale hydroelectric plants—is significantly contributing to the growth of the renewable energy sector. Furthermore, favorable government policies aimed at promoting the development and integration of cost-effective and sustainable energy solutions are further accelerating market expansion. 

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List of Prominent Players in the Renewable Energy Certificate (REC) Market:

•       AFS Energy B.V.
•       Climate Impact Partners Limited
•       3Degrees, Inc.
•       Ecohz AS
•       REDEX Pte. Ltd.
•       Shell Energy North America (US), L.P.
•       ENGIE S.A.
•       Evolugen by Brookfield Renewable
•       EDF Trading Limited
•       Grid Controller of India Limited (GRID-INDIA)
•       Enel S.p.A.
•       Statkraft AS
•       Sterling Planet, Inc.
•       South Pole Holding AG
•       STX Commodities B.V
•       Other Market Players

Market Dynamics

Drivers:

The growing demand for sustainable energy solutions is largely driven by increased public awareness of the environmental consequences associated with conventional energy sources, particularly fossil fuels. In an effort to reduce carbon emissions and address climate change, both consumers and businesses are increasingly prioritizing the use of renewable energy. As environmental consciousness rises, consumers are placing greater value on products and services offered by companies that demonstrate a commitment to sustainability. In response, many organizations are integrating renewable energy into their operations and purchasing Renewable Energy Certificates (RECs) to align with corporate sustainability goals and meet stakeholder expectations. This shift in consumer behavior and corporate responsibility is a key factor fueling the expansion of the renewable energy certificate market. 

Challenges:

A major challenge facing the global Renewable Energy Certificate (REC) market is the lack of regulatory consistency across regions. This disparity hampers market efficiency, limits scalability, and presents complexities for companies and investors operating in multiple jurisdictions. Definitions of renewable energy and the eligibility criteria for RECs vary significantly among countries and regions. For example, while some regulatory bodies recognize biomass, hydro, and nuclear energy as renewable sources, others accept only solar and wind. Additionally, differences in Renewable Portfolio Standards (RPS) and compliance frameworks create fragmented markets. Some regions operate exclusively through mandatory compliance markets, whereas others support voluntary REC trading, adding to the complexity of global market participation. 

Regional Trends:

North America is expected to capture a significant share of the REC market revenue, supported by robust legislative frameworks, growing corporate commitments to sustainability, rapid expansion of renewable energy capacity, government incentives, and a mature trading infrastructure. The enforcement of stringent Renewable Portfolio Standards (RPS) and other policy measures has fostered a strong market for utility-scale renewable energy procurement and REC adoption.

Meanwhile, the Asia-Pacific region is projected to experience the highest growth rate during the forecast period. Rising demand for renewable energy in the region—driven by a thriving high-tech sector with considerable energy needs—is a major growth catalyst. In addition, various government initiatives aimed at promoting renewable energy development and expanding REC frameworks are playing a critical role in advancing the market in this region. 

Recent Development:

• February 2024: Statkraft and Air Liquide signed the Virtual Power Purchase Agreement. The deal calls for Air Liquide to buy RECs from recently constructed wind farms in Poland. It is anticipated that this agreement will result in an annual reduction of 38,000 tonnes of carbon dioxide (CO2) emissions from Air Liquide. 

Segmentation of Renewable Energy Certificate (REC) Market-

By Capacity-

•   Up TO 1,000 KWH
•   1,001-5,000 KWH
•   Above 5,000 KWH

By Energy Type-

•   Solar power
•   Wind power
•   Hydropower
•   Biomass
•   Others

By End-use-

•   Compliance
•   Voluntary

By Region-

North America-

•       The US
•       Canada

Europe-

•       Germany
•       The UK
•       France
•       Italy
•       Spain
•       Rest of Europe

Asia-Pacific-

•       China
•       Japan
•       India
•       South Korea
•       South East Asia
•       Rest of Asia Pacific

Latin America-

•       Brazil
•       Argentina
•       Mexico
•       Rest of Latin America

 Middle East & Africa-

•       GCC Countries
•       South Africa
•       Rest of the Middle East and Africa

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