North America Renewable Energy Certificate Market - 2025-2032

North America Renewable Energy Certificate Market reached US$ 5.52 billion in 2024 and is expected to reach US$ 12.04 billion by 2032, growing with a CAGR of 10.24% during the forecast period 2025-2032.

The North America Renewable Energy Certificate (REC) market is a well-established and dynamic sector driven by both compliance and voluntary demand. The U.S. and Canada have structured REC markets, with the U.S. operating under Renewable Portfolio Standards (RPS) at the state level and Canada integrating RECs into its carbon offset and clean energy programs.

The market is influenced by factors such as regulatory mandates, corporate sustainability initiatives, and Countryal variations in renewable energy generation. The U.S. market, in particular, is dominated by state-based RECs and Green-e certified voluntary RECs, while Canada's market is shaped by provincial clean energy goals. Increasing demand from corporations for Scope 2 emissions reduction and the rise of long-term Power Purchase Agreements (PPAs) continue to drive growth in North America's REC market.

Dynamics

Rising Corporate Commitment to Sustainability

One of the primary drivers of the North American REC market is the increasing commitment of corporations to sustainability and carbon neutrality. Major companies, including tech giants like Google, Amazon, and Microsoft, have pledged to source 100% of their energy from renewable sources, leading to a surge in demand for RECs.

Many corporations purchase RECs to offset their Scope 2 emissions and meet ESG (Environmental, Social, and Governance) goals, even in regions where direct renewable energy procurement is not feasible. For example, Google's long-term commitment to clean energy has significantly influenced REC pricing trends, as the company actively purchases RECs to match its electricity consumption. Google has announced a cooperation with renewable energy company Intersect Power and investment firm TPG Rise Climate to create enough renewable energy to power several gigawatt-scale data centres.

The total investment in renewable energy is projected at US$ 20 billion, with Intersect having already funded the first project. This ambitious project seeks to provide renewable energy for gigawatts of data centre capacity across U.S. and will be carried out in phases. The initial phase is planned to become operational by 2026, with full completion by 2027. This growing corporate demand continues to fuel REC market expansion in North America, especially in voluntary markets.

Price and Market Volatility

One key restraint in the North American REC market is the significant price volatility caused by fluctuating supply and demand dynamics. Factors such as changes in state-level renewable portfolio standards (RPS), regulatory shifts, and variations in renewable energy generation influence REC pricing, making it difficult for buyers to forecast costs.

For example, in states like Texas and California, REC prices have seen sharp fluctuations due to oversupply from wind and solar farms or sudden policy changes affecting incentives. This uncertainty can deter long-term REC purchasing commitments from corporations and utilities, impacting market stability and investment confidence.

Segment Analysis

The North America renewable energy certificate market is segmented based on type, certificate, energy source, end-user and country.

Corporate Sustainability Commitments Drives Voluntary REC Segment

The voluntary REC segment is expected to dominate the global market in 2024. The voluntary REC industry is expanding rapidly, driven by corporate sustainability commitments and net-zero ambitions. Companies like Google, Microsoft and Amazon have established high renewable energy objectives, driving REC purchases in this sector.

In 2022, around 240 million RECs retired in voluntary markets, vs approximately 390 million RECs in compliance markets. The voluntary market encompasses a wide range of items, buyers and market situations. Different products package RECs and power differently, catering to different types of clients, ranging from residential families making relatively small buys to non-residential buyers making huge purchases.

Geographical Penetration

Rising Government Regulations in U.S.

U.S, particularly plays a dominant role in the North America Renewable Energy Certificate market, driven by both production and consumption factors. The country is primarily driven by a robust regulatory framework and government requirements for renewable energy. U.S. and Canada are the market leaders in terms of both issuance and acquisition of RECs.

Voluntary RECs are increasing popularity in U.S. due to business sustainability goals and tax incentives, such as the Inflation Reduction Act of 2022. This trend is especially noticeable in the data center industry, where corporations are aggressively pursuing green Power Purchase Agreements (PPAs). Mexico's REC market is stable, with regulators aiming to entice smaller generators with standard changes and rate reductions. This program is projected to promote the development of International Renewable Energy Certificates (I-RECs), especially in sectors like retail and industry that want to certify their renewable energy use.

Competitive Landscape

The major global players in the market include STX Group, Green-e Energy, ENGIE, ECOHZ, APX Inc., Karbone, NextEra Energy, I-REC standard, Statkraft and The Green Certificate Company Limited.

Pricing Analysis

The pricing of RECs in North America varies significantly based on state policies, supply-demand dynamics, and the type of renewable energy source. States with strong Renewable Portfolio Standards (RPS), such as California, Massachusetts, and New Jersey, often see higher REC prices due to stricter compliance requirements. For instance, Solar RECs in New Jersey have historically traded at premium prices, whereas wind and hydro RECs in regions with abundant supply, such as Texas, can trade low.

Voluntary REC markets, driven by corporate sustainability commitments, also influence pricing, with premium rates for RECs sourced from high-demand renewable projects like solar and wind farms. Additionally, policy changes and federal tax incentives play a crucial role in price fluctuations, making the North American REC market dynamic and regionally diverse.

Sustainability Analysis

The Renewable Energy Certificate (REC) market plays a vital role in driving sustainability efforts globally by incentivizing renewable energy production, reducing carbon emissions and facilitating the energy transition. By purchasing RECs organizations directly fund renewable energy projects like wind, solar, hydro and biomass, increasing global renewable energy capacity.

Regulatory mandates like Renewable Portfolio Standards (RPS) drive demand in compliance REC markets, ensuring a stable framework. Voluntary markets grow as more corporations commit to sustainability goals and adopt Science-Based Targets or net-zero pledges. Emerging platforms simplify REC purchasing for small businesses and individuals, expanding market participation.

The government and private entities' significant investment in renewable energy, notably large-scale solar power facilities, is propelling industry expansion. For example, in April 2023, U.S. Department of Energy (DOE) announced a US$ 52 million financial commitment for a carefully selected collection of 19 projects. This includes US$ 10 million supplied from the Bipartisan Infrastructure Law, aimed at strengthening the domestic solar supply chain in US.

By Type

• Compliance RECs
• Voluntary RECs

By Certificate

• I-REC
• TIGR
• GEC

By Energy Source

• Solar RECs
• Wind RECs
• Hydro RECs
• Others

By End-User

• Industrial
• Commercial
• Residential
• Governmental

By Country

• US
• Canada
• Mexico

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