The U.S. renewable energy certificate (REC) market is anticipated to grow at a compound annual growth rate (CAGR) of 10.23% from 2025 to 2032, expanding from USD 10.11 billion in 2024 to USD 22.04 billion by 2032. The market has witnessed substantial growth due to regulatory support, corporate sustainability efforts, and increasing public awareness of environmental issues. RECs are market-based instruments designed to encourage renewable energy generation and help entities meet renewable purchase obligations (RPOs). Each REC represents one megawatt-hour (MWh) of electricity produced from renewable sources. The growing emphasis on clean energy adoption in the U.S. has accelerated REC market expansion.
Public awareness regarding climate change and sustainability has driven various sectors, including commercial and residential, to invest in RECs to meet carbon neutrality and renewable energy goals. Many companies use RECs to offset their carbon footprint and demonstrate environmental responsibility. Additionally, state-level policies, such as Renewable Portfolio Standards (RPS), mandate utilities to source a portion of their energy from renewables, further boosting REC demand. As regulatory compliance with renewable energy use increases, utilities increasingly rely on RECs to fulfill obligations.
For example, in February 2023, Solvay entered a 15-year agreement with energyRe to purchase all RECs generated by the Lone Star Solar project in South Carolina, illustrating the corporate trend of leveraging RECs to support decarbonization goals.
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Growing Corporate Sustainability Commitments Fuel Market Expansion
Businesses are prioritizing sustainability while maintaining operational efficiency. RECs offer a cost-effective and flexible solution for companies to meet sustainability targets. Corporate commitments to social responsibility (CSR) and environmental stewardship drive the demand for RECs, as organizations purchase certificates to offset emissions and showcase their use of renewable energy.
In 2023, approximately 9.7 million customers procured 319 million MWh of renewable energy through green power markets in the U.S., with 117 million MWh obtained through unbundled RECs. This underscores the increasing corporate adoption of RECs for sustainability goals.
RECs enable companies to achieve carbon neutrality without significant capital investments in renewable infrastructure. For businesses that lack the capability to generate renewable energy on-site, RECs provide a financially viable alternative, further driving market growth.
Government Policies and Regulations Foster Market Opportunities
U.S. policymakers are recognizing the role of renewable energy in economic and environmental sustainability. Policies supporting clean energy development are creating a conducive environment for REC transactions. Federal and state governments have introduced regulations mandating renewable energy use in commercial and residential sectors, alongside aggressive decarbonization targets across industries such as electricity generation and transportation.
RECs play a vital role in helping businesses offset emissions cost-effectively. Many U.S. states have implemented Renewable Portfolio Standards (RPS), requiring utilities to incorporate renewable energy into their electricity supply. Compliance with these standards fuels REC purchases. For example, the Inflation Reduction Act of 2022 introduced long-term tax credits, state-level clean energy goals, and incentives for solar and wind energy, stimulating REC demand.
With stricter regulations and rising compliance requirements, REC demand is expected to surge. States are setting ambitious clean energy targets, such as achieving 100% carbon-free electricity by specific deadlines. The nationwide push for net-zero carbon emissions by 2050 is also driving investment in renewable technologies, further increasing REC adoption. For instance, Illinois has set a 2050 target for carbon-free electricity, which will require significant REC usage. As states continue to enforce existing clean energy policies and introduce new regulations, REC demand will rise.
Solar Power Dominates the REC Market
Solar energy holds the largest share in the REC market due to government incentives and tax credits that make solar power more accessible to producers and consumers. Policies promoting solar energy adoption have led to increased solar installations, generating a higher volume of RECs. The decreasing cost of solar panels has made solar energy an attractive option for utilities and corporations looking to meet renewable energy commitments efficiently. Many businesses purchase solar RECs to fulfill sustainability objectives without directly investing in solar infrastructure, reinforcing demand growth.
Western U.S. Leads the REC Market
The western region of the U.S. dominates the REC market, primarily due to states like California and Oregon implementing stringent RPS policies that require utilities to source a significant portion of their energy from renewables. These mandates create strong demand for RECs in the utility sector.
In 2021, the western U.S. accounted for 36.9% of retired RECs and 46.1% of the estimated 2022 REC value. This indicates a high level of REC adoption in the region, driven by corporate purchases and regulatory requirements.
The West’s abundant natural resources make it an ideal location for renewable energy generation, particularly solar and wind. As a result, the region is expected to lead REC production, with forecasts predicting over 480 million RECs generated annually by 2030.
Future Market Outlook (2025–2032)
- Implementation of Renewable Portfolio Standards (RPS) will drive REC demand.
- Corporate commitments to carbon neutrality and clean energy goals will boost REC adoption.
- Increased public awareness of climate change will create additional market opportunities.
- Growing demand for cleaner, more reliable energy solutions will sustain REC market expansion.
Report Scope
The “United States Renewable Energy Certificate Market Assessment, Opportunities, and Forecast (2018–2032F)” by Markets and Data offers a comprehensive analysis of the REC market, including qualitative and quantitative insights into industry dynamics, challenges, market size, growth trends, and segmental performance. The report also profiles key market players, detailing their business models, market share, and competitive strategies.
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