The state of renewables in 2025: global market overview

April 3, 2025

Newly published, the Spring 2025 Global Market Insights Report by 3Degrees offers a detailed analysis of renewable energy trends across North America, Europe, and Asia-Pacific. It highlights global decarbonization strategies and emissions reductions across Scopes 1, 2, and 3. Innovo has reviewed this report to distill key insights that can guide businesses navigating the evolving landscape of climate action and renewable energy markets.

North America: Navigating Rising Prices and Policy Uncertainty

  1. Electricity Prices on the Rise

    Electricity prices in North America are increasing. The hike in electricity prices is a result of the rising cost of natural gas and the growing demand stemming from sectors like AI, data centers, crypto mining, and electric vehicles. Current projections suggest that this trend will continue till at least 2030. The increment in electricity prices creates opportunities for renewable energy developers to secure higher power purchase agreement (PPA) valuations. 

  2. ERCOT Leads in PPA Value

    Texas’s ERCOT market stands out as a hotspot for PPAs due to significant load growth and stable pricing. Solar PPAs in ERCOT are particularly attractive, with positive projected renewable energy certificate (REC) values over their terms. This makes ERCOT one of the most competitive markets for renewable energy investments.

  3. Innovative Financial Mechanisms

    The pairing of Transferable tax credits (TTCs) with RECs are gaining momentum and traction within the industry. The pairing allows corporations to meet renewable energy goals alongside supporting broader energy transition, thereby posing a promising development and growth arc for businesses looking for innovative ways to achieve sustainability targets. 

Europe: A Buyer’s Market Emerges

  1. Declining PPA Prices

    The renewable energy market in Europe is undergoing a significant shift. After a record breaking year for PPA activity in 2024, energy prices continue to steadily decline. Increased renewable energy capacity, fluctuations in electricity demand, grid constraints, financial and market incentives for renewables, have all led to negative electricity prices. The transition from a seller’s market to a buyer’s market positions Europe as an attractive region for procuring renewable energy. While the first half of 2024 was characterized by galling power and gas prices, this trend was rivaled in the second half of 2024 and the beginning of 2025, due to a combination of cold winter weather, natural gas flow disruptions, and a present congestion in the transmissions capacities of the facilities. 
  2. Regulatory Pressures Intensify

    EU corporations face regulatory demands stemming from the Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Reporting Directive (CSRD). These regulatory frameworks push businesses to reassess their sustainability priorities and timelines by creating a sense of urgency for compliance driven climate action.  

Asia-Pacific: A Region of Growth and Variability

  1. PPA Demand Expands

    There is a growing interest in the PPAs in mature and emerging markets in the Asia-Pacific region. However, the procurement conditions are widely vary country-to-country due to a stark difference in supply availability, pricing structures, and regulatory frameworks. While certificates are still the dominant renewable energy procurement tool in several APAC countries, the demand for alternative solutions is positioned to increase as well. 
  2. Opportunities Amid Complexity

    APAC continues to evolve as a dynamic market with new opportunities for renewable energy investments. Businesses operating in this region must stay agile to capitalize on emerging trends while navigating local complexities.

Global Trends: Beyond Scope 2 Emissions, A Broader Focus on Decarbonization

Globally, businesses are expanding their focus beyond Scope 2 emissions reductions (related to purchased electricity) to address Scope 1 (direct emissions) and Scope 3 (supply chain emissions). Market-based solutions such as biomethane/renewable natural gas (RNG) are gaining relevance as companies strive for comprehensive climate action.

  1. Scope 1: Biomethane and the Greenhouse Gas Protocol
  2. Scope 3: Supply Chain Reductions (SCRs)

The report underscores the importance of tackling supply chain emissions as part of broader decarbonization strategies. Sustainability is no longer solely environmental, it's economical. Companies are increasingly prioritizing partnerships with suppliers that align with their net-zero goals.

Conclusion

The 2025 Global Market Insights report published by 3Degrees provides insight into the complexities of navigating renewable energy markets across the world. In North America, the rising electricity prices and innovative fiscal mechanisms such as TTSs can be approached as both challenges and upcoming opportunities for growth and development. The transition of Europe into a buyer’s market creates favorable conditions for corporate PPA procurement. While the Asia-Pacific region has potential for dynamic growth opportunities, the regional variability is a hurdle which will need to be addressed. 

Taking a step back, on a global level, businesses are broadening their focus beyond Scope 2 emissions to also consider the decarbonization objectives which the pursuit of addressing Scope 1 and 3 emissions will allow for. Market-based solutions and incentives, like renewable energy certificates (RECs), not only help companies achieve their emissions reduction goals, but provide much needed financial support to these clean energy projects. As environmental commodity markets mature worldwide, participation with unbundled RECS and PPAs continues to grow. 

At Innovo, we view these trends in critical markets that are shaping climate action strategies as establishing a bridge between corporate objectives and global sustainability milestones. The insights provided in this report positions renewable energy as a global key to energy security, stability, and economic growth. We are excited to help facilitate participation in the broader global renewable energy market, helping to drive down electricity prices, promote energy security, achieve corporate emissions goals, and accelerate the energy transition. 

Read the full report by 3Degrees here!