Press Release

Renewable Energy Certificate Market to Grow With a Considerable CAGR of 20%

Date : Mar 08, 2023

According to Ameco Research Analysts, the global Renewable Energy Certificate Market issued 2,175,813 certificates in 2020, with a CAGR of 20% over the forecasted years

The Renewable Energy Certificate (REC) mechanism is a fully automated mechanism and a one-of-a-kind application. Accreditation, Registration, Issuance, and Redemption are the four stages of the REC process. As solar, wind, and other green energy flow into the electricity system, a renewable energy certificate (REC) works as an accounting or tracking tool. Because renewable energy sources create electricity that is indistinguishable from that produced by any other source, some type of tracking is essential. In its ten years of operation, India's renewable energy certificate market has generated revenue of INR 9,266 crore, according to the CEEW-Centre for Energy Finance. Renewable energy certificates are market-based instruments that can help utilities and others achieve their renewable purchase obligations called as RPOs without having to buy renewable energy.

According to the analysis, up to 99 percent of all certificates sold have been used to meet RPO obligations. Despite this, low RPO compliance all over India has caused a 7% demand shortage, as seen by the 5.1 million RECs that have yet to be sold as of December 2020. It went on to say that if India's 27 RPO non-compliant states had chosen simply to employ RECs to reach their targets in 2020, they would have been required to buy extra 67.2 million documentations — total REC issuances from 2011 to 2020 were just 70.6 million. Solar projects contribute to as little as 16% of all RECs awarded to power generators, according to the report.

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Market Dynamics

The Green Power Partnership of the United States Environmental Protection Agency (EPA) has over 1,700 partner organizations that use 45 billion kilowatt-hours (kWh) of renewable energy annually. The partnership helps enterprises committed to finding renewable energy in the United States by providing them with information and assistance. Furthermore, the Green Power Partnership Top 100 honors the world's greatest renewable energy users, which includes multiple Natural Capital Partners clients, with Microsoft at the top of the list.

RECs are a market-based instrument that can be used to boost renewable energy market demand. Purchasing RECs exhibits environmental leadership, signals to the market that one favor renewable energy, and demonstrates their commitment to improving their energy habits. RECs can provide an additional revenue stream for power companies, making it more enticing to create more renewable energy capacity.

Rising global energy demand and rising electricity prices are causing a sluggish shift toward increasing renewable energy share. According to the Energy Information Administration (EIA) of the United States Department of Energy (DOE) and the Union of Concerned Scientists (UCS), supplying 10% of the country's electricity from renewable sources by 2020 would result in consumer savings ranging from $22.6 billion to US$37.7 billion in reduced electricity and natural gas bills.

Rooftop solar panels, micro wind turbines, and micro hydropower plants are all increasing their market share, which is propelling the market forward. Government policies promoting the development of these low-cost, long-term resources are propelling the market forward. The demand for micro hydropower plants is being driven by the availability of water streams, canals, and other flowing water resource sites. The renewable energy certificates industry is primarily driven by these factors.

Global Renewable Energy Certificate Market Scope

The market for renewable energy certificate is split into end-use, and geography. The end-use segment includes wind, solar, hydropower, geothermal, biomass, and others (biofuels and fuel cells). Among them, the hydropower segment accounted for a significant amount of share in 2020. However, solar is predicted to account for a significant portion of the market. Solar energy is increasingly being used to generate electricity, heat, and desalinate water on a global scale. Photovoltaics (PV) and concentrated solar power are the two main sources of energy (CSP).

Regional Stance

North America, Asia-Pacific, Europe, Latin America, and the Middle East & Africa (MEA) are the regional categorization of the global renewable energy certificate market. Among all the regions, the North American region occupied the leading market share in 2020 and is likely to carry on its leaning throughout the anticipated period 2021 – 2028. The market's expansion has been fueled by rising power consumption and the development of renewable energy sources. The market is growing due to the establishment and existence of rules for the trade of renewable energy sales. The market has grown as a result of government initiatives and the development of home-based renewable energy power sources.

Major Players

The key companies offered in the report include Environment Protection Agency (EPA), Western Area Power Administration (WAPA), Central Electricity Regulatory Commission (CERC), General Services Administration (GSA), Bonneville Environmental Foundation, and Renewable Choice Energy.

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