ENERGY TRANSITION MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Energy Transition Market Analysis & Forecast: 2025-2032

The Global Energy Transition Market is estimated to be valued at USD 3.11 Tn in 2025 and is expected to reach USD 6.03 Tn by 2032, exhibiting a compound annual growth rate (CAGR) of 9.9% from 2025 to 2032.

Key Takeaways

• By Energy Source, renewable energy is estimated to contribute 63.2% share of the market in 2025 owing to the increasing cost competitiveness of various renewable energy sources when compared to fossil fuels.
• By Technology, energy storage systems (batteries, pumped hydro) is estimated to contributes 36.9% share of the market in 2025 driven by the increasing demand for grid balancing and electric vehicle uptake.
• By Application, power generation is estimated to contribute 43% share of the market in 2025 owing to the extensive integration of renewable sources.
• By Region, North America has firmly established itself as the dominant region in the global energy transition market, projected to hold 44.3% of the global share in 2025. The U.S. leads the region, supported by a strong industry presence, favorable government policies, and sustained investments in renewable energy.

Market Overview

The market trend in the global energy transition industry points towards steady growth. The market is driven by the societal need to reduce greenhouse gas emissions and the falling costs of renewable energy technologies like solar and wind power. Stricter emission regulations by governments such as NOx Emissions Limits, Coal Consumption Reduction, Paris Agreement Commitments, etc. and commitments by corporations to reduce their carbon footprint are increasing the demand for sustainable energy products and services. Furthermore, advancing technologies in battery storage and renewable infrastructure are supporting the reliable integration of more green power onto national grids.

Current Events and Its Impact

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Global Energy Transition End-User Pricing Analysis

Solar PV costs range from $2.50–3.50/W in the U.S., $1.80–2.80/W in Europe, and as low as $1.20–2.20/W in Asia, with utility-scale projects at $0.80–1.20/W. Onshore wind averages $0.9–1.7M/MW, while offshore turbines exceed $2.8–4.8M/MW plus 40–60% for installation. Energy storage spans $500–800/kWh for residential lithium-ion and $150–350/kWh at utility scale, with alternatives like flow batteries ($250–500/kWh) and CAES ($100–200/kWh). EV charging ranges from $400–3,000 per Level 2 unit to $15,000–60,000 for DC fast chargers, reflecting significant cost variations by scale, region, and technology maturity.

Role of AI in Global Energy Transition Market

Artificial intelligence is reshaping renewable energy by boosting efficiency, reliability, and profitability. In November 2024, IBM and Sustainable Energy for All launched new AI-powered tools to support sustainable urban development by helping policymakers in developing regions map urban growth and assess energy and infrastructure needs.

Segmental Insights

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Global Energy Transition Market Insights, By Energy Source -  The Renewable Energy Sources Segment dominates due to the increasing cost competitiveness of various renewable energy sources when compared to fossil fuels

In terms of energy source, renewable energy is estimated to contribute 63.2% share of the market in 2025 owing to the increasing cost competitiveness of various renewable energy sources when compared to fossil fuels. Rapid technological advancements have led to a significant reduction in the capital costs of setting up renewable power projects. Furthermore, renewable sources have minimal or zero fuel costs over their operational lifetime, giving them long-term price certainty.

This makes renewable energy an attractive long-term investment for both commercial and industrial consumers looking to minimize energy costs and price risks. Government policies including renewable portfolio standards and falling subsidy levels have also accelerated the adoption of clean sources. With renewable energy achieving parity even in electricity markets in many countries, their utilization is expected to rise substantially in the coming years.

In September 2025, the Tamil Nadu Electricity Regulatory Commission approved TANTRANSCO’s plan to lease substation land to developers for Re. 1 per project annually, enabling the installation of Battery Energy Storage Systems (BESS) at six substations to support renewable energy integration.

Global Energy Transition Market Insights, By Technology –  The Energy Storage Systems (Batteries, Pumped Hydro) segment is driven by the increasing demand for grid balancing and electric vehicle uptake

In terms of technology, energy storage systems (batteries, pumped hydro) is estimated to contributes 36.9% share of the market in 2025 driven by the increasing demand for grid balancing and electric vehicle uptake. Growing penetration of renewable sources is necessitating sufficient energy storage capacity to balance intermittent renewable power supply and shifting demand patterns. This provides a massive business opportunity for battery-based and mechanical storage technologies.

In addition, forecasts for mass-market adoption of electric vehicles are driving immense battery manufacturing capacities and battery recycling infrastructure. Strong policy push for emission-free mobility in major automotive markets and improving driving range and costs are bolstering large-scale EV uptake. This will have a sweeping effect on the growth of the energy storage industry to meet the anticipated spike in demand for batteries and charging infrastructure.

In September 2025, Freen OÜ launched its new sodium-ion battery storage systems, Freen-BSH (high-voltage) and Freen-BSL (low-voltage), made in Estonia. These scalable models cater to homeowners, farmers, and commercial users, supporting off-grid power, solar integration, and peak load reduction.

Global Energy Transition Market Insights, By Application –  The Power Generation segment takes the lead due to the extensive integration of renewable sources

In terms of application, power generation is estimated to contribute 43% share of the market in 2025 owing to the extensive integration of renewable sources. While the transportation and residential sectors are also undergoing electrification to cut emissions, bulk of investment into renewable capacity addition has been in utility-scale solar and wind power projects.

Renewables are increasingly becoming the most pragmatic choices for utilities and bulk power suppliers in meeting rising electricity demand as renewable purchase obligations/mandates are spurring competitive renewable power procurement. With growing preference for renewable-based decentralized distributed generation over centralized fossil fuel plants, installation of solar rooftop systems and community wind projects are gathering momentum. The ongoing transition towards less carbon-intensive sources of energy in the power sector will thus continue supporting the growth of this segment.

In September 2025, Tata Power-led Odisha discoms launched a 1-kW rooftop solar program, allowing households to produce approximately 100 units of electricity monthly.

Regional Insights

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North America Energy Transition Market Trends

North America has firmly established itself as the dominant region in the global energy transition market, projected to hold 44.3% of the global share in 2025. The U.S. leads the region, supported by a strong industry presence, favorable government policies, and sustained investments in renewable energy. Major companies continue to expand domestic production capacity to strengthen supply chains and support the adoption of next-generation clean technologies.

For instance, in May 2025, feed-in tariffs were highlighted as a key government policy that guarantees a fixed payment for each unit of renewable electricity generated over a set period. This long-term revenue certainty enables developers to secure financing for large-scale projects, driving both investment and innovation in the renewable energy sector.

Asia Pacific Energy Transition Market Trends

Asia Pacific is the fastest-growing regional market in the global energy transition sector, fueled by rising energy demand from rapid industrialization and urbanization. The region is witnessing a dual shift: while certain countries remain dependent on conventional fossil fuels, others particularly China and India are spearheading renewable energy adoption to meet sustainability targets.

Both nations are channeling substantial investments into clean technologies and implementing supportive policies, creating opportunities for local and international companies alike. In addition, Southeast Asian countries, Australia, and New Zealand are accelerating renewable energy deployment, enhancing the region’s role as both a demand center and a manufacturing hub.

For instance, In January 2025, India’s solar power capacity surpassed 100 GW for the first time, reaching 105.6 GW by the end of March after adding 7.8 GW in Q1 alone. This milestone highlights the sector’s rapid growth from just 2.8 GW in 2014, reflecting strong industry presence, favorable government policies, and record-high renewable investments of US$9.84 billion in Q1 2025.

Europe Energy Transition Market Trends

Europe represents a key growth region in the global energy transition market, driven by its ambitious climate targets and carbon neutrality commitments. The region is advancing large-scale adoption of renewable energy, electric vehicles, and supporting infrastructure.

European governments are implementing stringent regulatory frameworks that promote sustainability and accelerate clean energy adoption. Investments are increasingly directed towards innovative technologies and eco-friendly solutions, making Europe a hub for advanced renewable integration. While the region is expanding steadily, the untapped growth potential in Asia Pacific remains significantly higher due to its sheer scale of demand.

Global Energy Transition Market Outlook: Country-Wise

United States Energy Transition Market Trends

The United States is the largest contributor to the North American energy transition market, driven by strong federal and state-level policies, renewable energy mandates, and a robust domestic manufacturing ecosystem. Growth is supported by continuous investment in wind, solar, EV infrastructure, and smart grids. Major global players maintain extensive operations in the U.S., reinforcing its leadership position in the global supply chain.

For instance, in January 2025, the U.S. Environmental Protection Agency’s Energy and Environment Guide to Action highlighted how state-level policies such as renewable portfolio standards, financial incentives, and net metering programs are driving renewable adoption. Complementary tools like the Database of State Incentives for Renewable Energy (DSIRE) and EPA’s REC tracking systems ensure transparency, investment, and fraud prevention. Together, these frameworks demonstrate how strong federal support combined with state mandates and programs strengthens the U.S. renewable energy ecosystem.

China Energy Transition Market Trends

China dominates the Asia Pacific energy transition market, supported by massive investments and a clear long-term strategy to achieve carbon neutrality by 2060. The country has aggressively expanded solar, wind, and battery storage capacity, while also emerging as a global hub for clean technology manufacturing and exports.

For instance, in January 2025, China added 373 million kilowatts of new renewable energy capacity in 2024, accounting for 86% of its total newly installed power capacity bringing cumulative renewable capacity to 1.889 billion kilowatts, or 56% of the nation’s total installed capacity. This expansion, spanning hydropower, wind, solar, and biomass, reflects China’s massive investments in clean energy and its strategic commitment to achieving carbon neutrality by 2060.

India Energy Transition Market Trends

India is one of the fastest-growing markets in the global energy transition sector, driven by its government’s commitment to achieving 500 GW of non-fossil fuel capacity by 2030. Large-scale investments are flowing into solar, wind, green hydrogen, and pumped storage projects to meet the country’s rising energy demand while reducing carbon emissions.

For instance, in June 2025, India reported its largest ever addition of clean power in a single year, installing 30 GW of renewable capacity between April 2024 and April 2025, enough to power nearly 18 million homes. With nearly 170 GW of renewable projects in the pipeline and government policies targeting 50 GW of non-fossil fuel capacity annually, India is rapidly scaling solar, wind, and pumped storage projects, supported by both public investments and private sector participation.

Market Report Scope

Energy Transition Market Report Coverage

Market Driver - Increasing government policies and incentives for renewable energy adoption

More and more governments around the world are strongly pushing for cleaner forms of energy production through favorable policy changes and financial incentives. This transition is mainly driven by the climate change risks brought about by excessive reliance on fossil fuels. According to the International Renewables Agency, over 50 countries have come out with long-term plans to increase their renewable energy capacities and lower their carbon footprint. Tax credits, production tax credits, grants, loans, net metering policies, renewable portfolio standards, and feed-in tariffs are some commonly used incentives and mandates adopted by these nations like U.S., Canada, China, etc.

The European Union has some of the most ambitious renewable energy goals globally. Its latest plan called the "Green Deal" proposes a 55% reduction in emissions by 2030 and net-zero emissions by 2050. Under this scheme, strict carbon pricing and performance standards are being put in place for industries and sectors. European countries like Germany, Denmark, Portugal, Spain and Sweden have long provided subsidies for solar panels, tax exemptions for wind farms, priority grid connections for renewable projects and competitive prices for the energy they produce. Asia Pacific too has embarked on an unprecedented renewable scale up. China aims to install over 1,200 GW of wind and solar power by 2030 while India has a solar target of 100 GW by the same year. Thailand, Vietnam, and Indonesia are other fast-growing renewable markets in Southeast Asia boosted by long-term electricity purchase agreements.

For instance, in March 2025, Siemens showcased Electrification X and Gridscale X, AI-powered platforms at DISTRIBUTECH 2025, designed to modernize electricity grids and optimize energy management at scale. These platforms enable utilities to integrate and manage distributed energy resources, including renewables, by providing predictive analytics, real-time monitoring, and digital twins of the grid. By leveraging AI and machine learning, Siemens helps energy operators improve efficiency, reliability, and sustainability across complex energy networks.

Analyst Viewpoint

• The global energy transition market is experiencing significant growth driven by the urgent need to reduce carbon emissions and address climate change. Countries and corporations around the world are making ambitious commitments to boost renewable energy and shift away from fossil fuels. This large-scale transition from conventional sources to renewables like solar, wind and hydrogen presents both opportunities and challenges.
• North America currently dominate the energy transition space given their early investments in renewables and carbon-reduction policies. However, growth is accelerating the fastest in the Asia Pacific region due to increasing energy demands and government initiatives in countries such as China, India, and Japan. The transition remains constrained by the lack of enabling infrastructure for renewables and hydrogen as well as the high upfront costs of shifting energy systems. Policy and regulatory uncertainty also poses a risk to the long-term market outlook.
• On the other hand, the need to overhaul global energy systems represents a huge market potential for technologies supporting the transition. These include renewable energy generation, energy storage, green hydrogen production, grid modernization, electric vehicles, and battery manufacturing. New business models centered on microgrids and distributed generation could also see increased adoption. Overall, the transformation of the energy sector remains one of the defining trends of the 21st century that will shape both economies and the climate for decades to come. 

Energy Transition Industry News

• In September 2025, Arup announced its second annual research competition, inviting postgraduate researchers to submit innovative ideas to promote energy transition in urban settings.
• In September 2025, CII and WRI India launched the CI-NERGY Alliance at Connect Karo 2025 in New Delhi, creating a national platform to drive the commercial and industrial sector’s transition to clean energy, supporting India’s targets of 50% non-fossil fuel electricity capacity by 2030 and net-zero emissions by 2070.
• In July 2025, Tata Power Skill Development Institute (TPSDI), a leading energy sector training institute, launched a Green Energy Skill Centre in Rohini, New Delhi. The centre offers training in renewable energy technologies such as Solar PV installation, commissioning, and O&M, Energy Storage, Pumped Hydro Storage, and Electrical Safety, aiming to build a skilled workforce for India’s energy transition.
• In February 2024, Ørsted, a Danish leader in renewable energy, announced its merger with a solar energy firm to strengthen its renewable energy portfolio. This strategic collaboration aims to enhance Ørsted's capabilities in the solar sector, complementing its extensive investments in offshore and onshore wind farms.

Market Segmentation

• Energy Source Insights (Revenue, US$ Tn, 2020 - 2032)
• Renewable Energy
• Non-Renewable Energy
•  Technology Insights (Revenue, US$ Tn, 2020 - 2032)
• Energy Storage Systems (Batteries, Pumped Hydro)
• Electric Vehicles (EVs)
• Smart Grids
• Carbon Capture and Storage (CCS)
•  Application Insights (Revenue, US$ Tn, 2020 - 2032)
• Power Generation
• Transportation
• Industrial
• Residential
• Commercial
• Regional Insights (Revenue, US$ Tn, 2020 - 2032)
• North America
• U.S.
• Canada
• Latin America
• Brazil
• Argentina
• Mexico
• Rest of Latin America
• Europe
• Germany
• U.K.
• Spain
• France
• Italy
• Russia
• Rest of Europe
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East
• GCC Countries
• Israel
• Rest of Middle East
• Africa
• South Africa
• North Africa
• Central Africa
• Key Players Insights
• Siemens AG
• General Electric Company
• Vestas Wind Systems A/S
• First Solar, Inc.
• SunPower Corporation
• Tesla, Inc.
• Enphase Energy, Inc.
• Ørsted A/S
• ABB Ltd.
• Schneider Electric SE
• NextEra Energy, Inc.
• Canadian Solar Inc.
• Brookfield Renewable Partners L.P.
• Duke Energy Corporation
• BP plc

Sources

Primary Research Interviews

• Energy Utility Company Executives
• Renewable Energy Project Developers
• Government Energy Policy Officials
• Clean Technology Equipment Manufacturers
• Others

Databases

• International Energy Agency (IEA) Database
• Bloomberg New Energy Finance (BNEF)
• Global Wind Energy Council (GWEC) Database
• International Renewable Energy Agency (IRENA) Statistics
• Others

Magazines

• Renewable Energy World
• Energy Transition Magazine
• Power Engineering International
• Wind Power Engineering & Development
• Others

Journals

• Energy Policy Journal
• Renewable and Sustainable Energy Reviews
• Applied Energy
• Others

Newspapers

• Financial Times Energy Section
• Reuters Energy News
• The Wall Street Journal Energy Coverage
• Bloomberg Energy
• Others

Associations

• International Energy Agency (IEA)
• International Renewable Energy Agency (IRENA)
• Global Wind Energy Council (GWEC)
• Solar Power Europe (SPE)
• Others

Public Domain Sources

• Government Energy Departments Publications
• United Nations Sustainable Development Goals Reports
• World Bank Energy Sector Reports
• European Commission Energy Transition Documents
• Others

Proprietary Elements

• CMI Data Analytics Tool
• Proprietary CMI Existing Repository of information for last 8 years

*Definition: The global energy transition market provides insights into investments and innovations accelerating the global transition to more sustainable and resilient energy sources. The market covers opportunities within renewable energy generation such as solar, wind and hydro power as well as emerging technologies like energy storage, green hydrogen, carbon capture and utilization. It also analyzes trends and developments in the electrification of transport, the phasing out of fossil fuels and the increasing adoption of energy efficient practices across industries.