Rapid industrialization along with increase in stringent environmental regulations and Initiatives taken by the government are the major factors that fueled the demand for energy.
The global renewable energy market is expected to be heading toward expansion phase during the forecast period. Factors propelling the market growth include concerns regarding environmental impacts of fossil fuels such as degradation, greenhouse gas emissions (GHG), severe climate change conditions, and others. In addition, rapid urbanization, and economic growth in the developing countries are significant factors driving the renewable energy market. Renewable energy market accounted for revenue of $928.0 Billion in 2017 and is anticipated to generate $1,512.3 Billion by 2025, growing at a CAGR of 6.1% from 2018 to 2025.
However renewable energy technologies continue to face a number of barriers. The major challenge is mainly economic, the costs comprise infrastructure investment, day-to-day operations, and market costs of supply. On the contrary, regions such as Europe and Asia, are shifting toward electrification of vehicles, wherein China leads the market. This factor is expected to provide lucrative opportunities for the growth of the renewable energy market.
Based on type, the hydroelectric power segment contributed to the highest market share, accounting for nearly 63% of the total market share in 2017. The segment is expected to maintain its dominance by the end of 2025. On the other hand, the solar energy segment is expected to register the fastest CAGR of 13.4% from 2017 to 2025.
In addition, Europe is also aiming to reduce to greenhouse gas emissions by decreasing its dependency on the fossil fuels. Sweden, Austria, and Germany are some of the countries dominating the Europe renewable energy market. There is significant increase in biofuels production in European countries specifically in Sweden, and Austria due to which bioenergy has dominant share after hydroelectric power in Europe renewable energy market. Most of the bioenergy is produced domestically in Sweden, with a significant contribution being biomass from the forest industry. Moreover, Germany consumes more energy as compared to other countries due to presence of energy intensive industries such as chemical and automobile.
Furthermore, the renewable energy market size is increasing due to rapid urbanization in Asia-Pacific. Presence of countries such as China, India, and Indonesia, in the Asia-Pacific that experience rapid industrialization along with increase in stringent environmental regulations, has fuelled the demand for energy as compared to other regions. China has the dominant share in the Asia-Pacific renewable energy market.
The emergence of the Asia-Pacific region as a significant player in the renewable energy market and initiatives taken by the government are the two major factors that drive the growth of the market. However high manufacturing cost impedes the market growth up to a certain extent. On the other hand, the increase in electric vehicles is expected to create multiple opportunities for the market in the upcoming future.
