Power Purchase Agreement Market To Reach $18.4 Billion By 2031
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According to a new report published by Allied Market Research, the power purchase agreement market was valued at $11.6 billion in 2021 and is projected to reach $18.4 billion by 2031, growing at a CAGR of 4.9% from 2022 to 2031. The adoption of renewable energy and corporate sustainability goals are driving significant growth in the market.
Download PDF Brochure:
🌱 What is a Power Purchase Agreement?
A Power Purchase Agreement (PPA) is a long-term contract between a power producer and a buyer for the purchase of electricity. Often referred to as Green Power Purchase Agreements (Green PPAs), these agreements typically last between 5 to 20 years.
Under a PPA, developers sell electricity at a fixed rate, usually lower than utility retail prices, providing cost stability and clean energy benefits to buyers. The agreement ensures that developers earn revenue not only from electricity sales but also from tax credits and renewable incentives.
At the end of the PPA term, customers often have the option to extend the agreement or purchase the renewable system outright.
🔑 Key Findings of the Study
By type, the physical PPA segment dominated with 59.5% market share in 2021.
By application, wind energy led with 39.9% revenue share, while solar posted the fastest growth.
By end use, the corporate segment held the largest share at 57.0% in 2021.
By region, Europe led the market with 47.8% share, while North America posted the highest growth rate.
🌍 Market Drivers and Opportunities
The power purchase agreement market growth is fueled by several key factors:
Rising adoption of green energy across Asia and Australia.
Lower power prices, making PPAs more attractive than utility purchases.
Corporate sustainability policies, encouraging large businesses to commit to renewable energy through PPAs.
Cost savings on electricity bills and reduction in carbon footprints.
Flexibility of PPA models, offering both on-site and off-site project options.
These benefits position PPAs as an essential tool for organizations aiming to reduce operating costs while advancing environmental goals.
Buy This Report (447 Pages PDF with Insights, Charts, Tables, and Figures):
🔎 Market Segmentation Analysis
📌 By Type
Physical PPA held the largest share of 59.5% in 2021, offering high flexibility and bulk purchasing advantages.
Portfolio PPA, block delivery PPA, and others continue to gain traction, especially in regions seeking diverse energy procurement models.
📌 By Application
Wind energy dominated the market with 39.9% revenue share in 2021, growing at a 4.8% CAGR.
Solar energy is expected to grow at the highest CAGR of 5.1%, driven by declining panel costs and storage benefits.
Geothermal, hydro, and other renewables also contribute to market expansion, especially in regions with strong resource availability.
📌 By End Use
Corporate segment accounted for 57.0% of revenue in 2021 and is forecasted to grow at 5.1% CAGR.
Corporates increasingly prefer PPAs to meet energy efficiency targets and sustainability commitments.
Merchant and residential segments are also emerging, particularly in urban areas where renewable adoption is accelerating.
🌏 Regional Insights
Europe led the market in 2021, holding 47.8% revenue share, supported by strong renewable energy policies. Spain's solar storage industry is expected to drive further growth.
North America is projected to grow at the highest CAGR of 5.3% during the forecast period, fueled by corporate adoption of renewable PPAs and government incentives.
Asia-Pacific and LAMEA are witnessing rapid adoption of PPAs as businesses and governments push for clean energy alternatives to meet climate goals.
🏢 Key Market Players
The power purchase agreement market includes leading global energy and technology companies driving renewable adoption. Key players include:
Schneider Electric
RWE
ENGIE
Statkraft AG Group
Enel Spa
Siemens
Ameresco
Other notable contributors are General Electric, Shell, Renewable Energy Systems Ltd., and Ecohz. These players are actively developing new contract models, expanding renewable portfolios, and supporting global carbon neutrality initiatives.
Get a Customized Research Report:
🌟 Conclusion
The power purchase agreement market is becoming a cornerstone of the renewable energy industry , offering long-term cost savings, carbon reduction, and energy stability for corporates and utilities alike. With increasing demand for clean power, flexible procurement options, and favorable government policies, the market is poised to expand steadily, reaching $18.4 billion by 2031.
As global businesses accelerate their sustainability commitments, power purchase agreements will remain central to advancing renewable energy adoption and building a greener, more energy-efficient future. 🌍⚡
Trending Reports in Energy and Power Industry:
Power Purchase Agreement Market
Renewable Energy Certificates Market
Renewable Energy Market
U.S. Clean Energy Market
Clean Energy Infrastructure Market
Clean Energy Transition Market
Clean Energy Market
Energy Storage System Market
Power Grid Market
Electrical Grid Market
Electric Service Companies (ESCOs) Market
AI in Energy Market
Small Hydropower Market
Distributed Energy Generation Market
About Us
Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.
Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.
Corporate Demand for Green Energy Fuels Growth in Power Purchase Agreement Market
Power purchase agreement market to hit $18.4B by 2031, driven by corporate sustainability goals, solar adoption & green energy demand.” - Allied Market ResearchWILMINGTON, DE, UNITED STATES, September 22, 2025 /EINPresswire / --According to a new report published by Allied Market Research, the power purchase agreement market was valued at $11.6 billion in 2021 and is projected to reach $18.4 billion by 2031, growing at a CAGR of 4.9% from 2022 to 2031. The adoption of renewable energy and corporate sustainability goals are driving significant growth in the market.
Download PDF Brochure:
🌱 What is a Power Purchase Agreement?
A Power Purchase Agreement (PPA) is a long-term contract between a power producer and a buyer for the purchase of electricity. Often referred to as Green Power Purchase Agreements (Green PPAs), these agreements typically last between 5 to 20 years.
Under a PPA, developers sell electricity at a fixed rate, usually lower than utility retail prices, providing cost stability and clean energy benefits to buyers. The agreement ensures that developers earn revenue not only from electricity sales but also from tax credits and renewable incentives.
At the end of the PPA term, customers often have the option to extend the agreement or purchase the renewable system outright.
🔑 Key Findings of the Study
By type, the physical PPA segment dominated with 59.5% market share in 2021.
By application, wind energy led with 39.9% revenue share, while solar posted the fastest growth.
By end use, the corporate segment held the largest share at 57.0% in 2021.
By region, Europe led the market with 47.8% share, while North America posted the highest growth rate.
🌍 Market Drivers and Opportunities
The power purchase agreement market growth is fueled by several key factors:
Rising adoption of green energy across Asia and Australia.
Lower power prices, making PPAs more attractive than utility purchases.
Corporate sustainability policies, encouraging large businesses to commit to renewable energy through PPAs.
Cost savings on electricity bills and reduction in carbon footprints.
Flexibility of PPA models, offering both on-site and off-site project options.
These benefits position PPAs as an essential tool for organizations aiming to reduce operating costs while advancing environmental goals.
Buy This Report (447 Pages PDF with Insights, Charts, Tables, and Figures):
🔎 Market Segmentation Analysis
📌 By Type
Physical PPA held the largest share of 59.5% in 2021, offering high flexibility and bulk purchasing advantages.
Portfolio PPA, block delivery PPA, and others continue to gain traction, especially in regions seeking diverse energy procurement models.
📌 By Application
Wind energy dominated the market with 39.9% revenue share in 2021, growing at a 4.8% CAGR.
Solar energy is expected to grow at the highest CAGR of 5.1%, driven by declining panel costs and storage benefits.
Geothermal, hydro, and other renewables also contribute to market expansion, especially in regions with strong resource availability.
📌 By End Use
Corporate segment accounted for 57.0% of revenue in 2021 and is forecasted to grow at 5.1% CAGR.
Corporates increasingly prefer PPAs to meet energy efficiency targets and sustainability commitments.
Merchant and residential segments are also emerging, particularly in urban areas where renewable adoption is accelerating.
🌏 Regional Insights
Europe led the market in 2021, holding 47.8% revenue share, supported by strong renewable energy policies. Spain's solar storage industry is expected to drive further growth.
North America is projected to grow at the highest CAGR of 5.3% during the forecast period, fueled by corporate adoption of renewable PPAs and government incentives.
Asia-Pacific and LAMEA are witnessing rapid adoption of PPAs as businesses and governments push for clean energy alternatives to meet climate goals.
🏢 Key Market Players
The power purchase agreement market includes leading global energy and technology companies driving renewable adoption. Key players include:
Schneider Electric
RWE
ENGIE
Statkraft AG Group
Enel Spa
Siemens
Ameresco
Other notable contributors are General Electric, Shell, Renewable Energy Systems Ltd., and Ecohz. These players are actively developing new contract models, expanding renewable portfolios, and supporting global carbon neutrality initiatives.
Get a Customized Research Report:
🌟 Conclusion
The power purchase agreement market is becoming a cornerstone of the renewable energy industry , offering long-term cost savings, carbon reduction, and energy stability for corporates and utilities alike. With increasing demand for clean power, flexible procurement options, and favorable government policies, the market is poised to expand steadily, reaching $18.4 billion by 2031.
As global businesses accelerate their sustainability commitments, power purchase agreements will remain central to advancing renewable energy adoption and building a greener, more energy-efficient future. 🌍⚡
Trending Reports in Energy and Power Industry:
Power Purchase Agreement Market
Renewable Energy Certificates Market
Renewable Energy Market
U.S. Clean Energy Market
Clean Energy Infrastructure Market
Clean Energy Transition Market
Clean Energy Market
Energy Storage System Market
Power Grid Market
Electrical Grid Market
Electric Service Companies (ESCOs) Market
AI in Energy Market
Small Hydropower Market
Distributed Energy Generation Market
About Us
Allied Market Research (AMR) is a full-service market research and business-consulting wing of Allied Analytics LLP based in Portland, Oregon. Allied Market Research provides global enterprises as well as medium and small businesses with unmatched quality of "Market Research Reports" and "Business Intelligence Solutions." AMR has a targeted view to provide business insights and consulting to assist its clients to make strategic business decisions and achieve sustainable growth in their respective market domain.
Pawan Kumar, the CEO of Allied Market Research, is leading the organization toward providing high-quality data and insights. We are in professional corporate relations with various companies and this helps us in digging out market data that helps us generate accurate research data tables and confirms utmost accuracy in our market forecasting. Each and every data presented in the reports published by us is extracted through primary interviews with top officials from leading companies of domain concerned. Our secondary data procurement methodology includes deep online and offline research and discussion with knowledgeable professionals and analysts in the industry.
David Correa
Allied Market Research
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