Electrolyzer Market Size to Worth USD 45.48 Billion by 2032

The global electrolyzer market size is estimated to be worth around USD 45.48 billion by 2032, increasing from USD 3.69 billion in 2023, According to Precedence Research.

Ottawa, Dec. 18, 2023 (GLOBE NEWSWIRE) — The global electrolyzer market size was valued at USD 2.8 billion in 2022 and the sector is expanding at a remarkable CAGR of 32.2% from 2023 to 2032.

North America led the market with the largest market share in 2022. The electrolyzer market is driven by the growing interest in green hydrogen, technological advancements and renewable energy integration.

An electrolyzer is a device that uses an electrochemical process called electrolysis to break down water or other compounds into their constituent elements, typically hydrogen and oxygen. The process involves passing an electric current through a conducting solution or molten substance to facilitate a chemical reaction. In the case of water electrolysis, the electrolyzer typically has two electrodes, an anode, and a cathode, immersed in water. When an electric current is applied, water molecules at the cathode undergo reduction, producing hydrogen gas, while water molecules at the anode undergo oxidation, producing oxygen gas. This process is of interest for producing hydrogen gas as a clean and renewable energy carrier, as hydrogen can be used as a fuel for various applications, including fuel cell and combustion engines, with water as the only byproduct when the hydrogen is used.

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Electrolyzers play a crucial role in the development of hydrogen as a sustainable energy source. The electrolyzer market is driven by the growing investment by the market participants. For instance, in August 2023, a $12.5 million Series A funding headed by BP Ventures was concluded by Advanced Ionics, the creator of a novel class of hydrogen electrolyzers beneficial for increasing the generation of green hydrogen. Other investors included Clean Energy Ventures, Mitsubishi Heavy Industries, and GVP Climate. The additional funding will support Advanced Ionics’ expansion and enable the company to implement its SymbionTM water vapor electrolyzer technology for heavy industries.

Regional Stance:

North America is expected to dominate the market during the forecast period. North America has been transitioning to a greater usage of renewable energy sources, especially in the US and Canada. By facilitating the storage and use of excess renewable energy, electrolyzer integration into the energy landscape helps to create a more robust and sustainable energy system. For instance, as more governments move toward renewable energy sources, solar electricity is currently more affordable than conventional energy in several US states, including California, Hawaii, Texas, and Minnesota. Certain states have established goals to achieve 100% renewable energy, including Hawaii, which plans to have 100% renewable energy by 2045. Moreover, the market for electrolyzers has grown due to several federal, state, and local government programs and regulations.

Regulatory frameworks, subsidies, and incentives that support the use of green hydrogen and electrolyzers have been crucial in stimulating investment in the industry. For instance, as part of its $7 billion H2Hubs initiative, the US government plans to provide $1 billion in subsidies to promote the use of clean hydrogen. This move comes after it was determined that a key project bottleneck was a shortage of off-takers.

Asia Pacific is expected to grow at the highest CAGR during the forecast period. The Asia Pacific region is seeing a significant increase in investments in renewable energy sources including wind and solar power. By utilizing water electrolysis to produce green hydrogen, the incorporation of electrolyzers into these renewable energy projects facilitates the area’s shift to more environmentally friendly energy sources. Significant research and development efforts have also been made in the area to develop electrolyzer technology. To increase electrolysis’s competitiveness and economic viability, efforts are concentrated on lowering its cost and increasing its efficiency. Thus, driving the market growth in the region.

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Report Highlights:

Type Insights

The alkaline electrolyzer segment is expected to hold the largest market share during the forecast period. Alkaline electrolyzers have found significant application in various industrial processes where large quantities of hydrogen are required. Industries such as chemicals, petrochemicals, and refining often use alkaline electrolyzers for their reliability and efficiency. Moreover, these electrolyzers have historically been considered cost-competitive, particularly for large-scale applications. The technology has benefited from years of development, resulting in cost efficiencies, and has been used in industries where cost-effectiveness is crucial. Furthermore, Renewable energy projects include alkaline electrolyzers due to the growing focus on green hydrogen generation. During times of low demand, they may store renewable energy in the form of hydrogen by using extra power from renewable sources. Thereby, driving the segment expansion.

Capacity Insights

The 500 kW – 2 MW segment is expected to hold a substantial market share during the forecast period. This power range of electrolyzers is often used in industrial settings where large amounts of hydrogen are needed for different operations including chemical manufacture and refining. These systems are suited for supplying medium- to large-scale industrial processes with hydrogen because of their scalability. Additionally, this power range can help with energy storage and grid balancing by turning surplus electricity from renewable sources like solar or wind into hydrogen. It is possible to store renewable energy in hydrogen by using it to produce electricity or for other purposes in the future.

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Application Insights

The power plants segment is expected to dominate the market share over the forecast period. Energy storage may be accomplished in power plants using electrolyzers. Hydrogen may be produced by electrolysis using surplus electricity generated during times of excess output, such as when renewable energy sources like solar or wind power are providing more energy than required. When there is a greater need for electricity later, the hydrogen may be stored and used. Moreover, by offering a way to create hydrogen without releasing greenhouse emissions, electrolyzers contribute to the decarbonization of power plants. This is a component of a larger plan to switch to greener energy sources and reduce the carbon impact of electricity production.

Electrolyzer Market Scope

Report Coverage Details
Growth Rate from 2023 to 2032 CAGR of 32.2%
Market Size in 2023 USD 3.69 Billion
Market Size by 2032 USD 45.48 Billion
Base Year 2022
Forecast Period 2023 to 2032
Segments Covered Type, Capacity, Application, and Geography
Regions Covered North America, Europe, Asia-Pacific, Latin America, Middle East & Africa (MEA)

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Market Dynamics:


Favorable government initiatives

The market is greatly impacted by the various beneficial government initiatives and policies that are put into place. Electrolyzers are essential to the global push toward decarbonization and the use of renewable energy sources, which are being supported by many nations. Supportive policies, including grants, subsidies, tax credits, and advantageous rules, are being put in place by governments to hasten the installation of electrolyzers and the generation of hydrogen. These programs seek to improve market conditions, promote research and development, and increase investment in electrolysis technology. Strong government backing gives stakeholders and investors stability and trust, which promotes market expansion.


High cost

Purchasing and installing electrolyzer systems might come with a significant upfront capital expense. Potential adopters may find this to be a barrier to acceptance, especially if financial incentives or subsidies are difficult to come by. Furthermore, there is a direct correlation between the cost of renewable energy sources and the cost-effectiveness of producing hydrogen by electrolysis. Green hydrogen produced by electrolysis may become less competitive overall if the cost of renewable energy stays high. Thus, acting as a major restraint for the market growth during the forecast period.


Advancement in technology and cost reduction           

The market’s growth is primarily being driven by cost reduction and technological advances. Technological advancements throughout the years have resulted in increased durability, scalability, and efficiency. The improvement of catalyst materials, membrane technology, electrode designs, and system integration have been the main areas of research and development. Higher performance, longer system lives, and less maintenance needs are the outcomes of these developments. Systems are becoming more and more attractive to a larger number of industries and applications as their costs continue to drop. Continuous attempts to reduce costs and improve technology are increasing market competitiveness, which is growing the industry globally.

Related Reports:

  • Hydrogen Generator Market: The global hydrogen generator market size was estimated at USD 1 billion in 2022 and is projected to hit around USD 1.73 billion by 2032, registering a CAGR of 5.7% during the forecast period from 2023 to 2032.
  • Hydrogen Combustion Engine Market: The global hydrogen combustion engine market size was evaluated at USD 35 billion in 2030 and is projected to hit around USD 89 billion by 2040, growing at a CAGR of 9.78% during the forecast period from 2030 to 2040.
  • Hydrogen Energy Storage Market: The global hydrogen energy storage market size is projected to be valued at USD 14.72 billion in 2021 and is expected to hit around USD 26.94 billion by 2030 with a registered CAGR of 7.1% over the forecast period 2022 to 2030.
  • Clean Hydrogen Market: The global clean hydrogen market size was estimated at USD 1.41 billion in 2021 and it is expected to surpass around USD 5.95 billion by 2030 with a registered CAGR of 17.36% from 2022 to 2030.
  • PEM Water Electrolyzer Market: The global PEM water electrolyzer market size reached USD 6.59 billion in 2022 and is expected to hit around USD 13.12 billion by 2032, poised to grow at a CAGR of 7.13% during the forecast period from 2023 to 2032.

Recent Developments:

  • In September 2023, by introducing the “AEM Flex 120,” a new AEM electrolyzer for the expedited start of industrial and refueling pilot projects, Enapter AG is consciously broadening its product offering. With up to 50 AEM Stack core modules, the AEM Flex 120 offers highly reactive and adaptable operation in response to variable renewable energy sources. With an optional dryer, it can create around 53 kg of hydrogen per day at 99.999 percent pure, filling the market gap between Enapter’s megawatt-scale AEM Multicore (450 kg/day) and AEM Electrolyser EL 4 (1 kg/day).
  • In November 2023, in Berlin, Air Liquide and Siemens Energy formally opened their joint venture, a gigawatt electrolyzer facility. An inventive European ecosystem will be supported by the mass manufacture of electrolyzer components, which will enable the industrial scale and competitive cost production of low-carbon hydrogen. By 2025, the cutting-edge gigawatt facility will increase its output to three gigawatts annually. This Franco-German relationship is essential to the development of a sustainable hydrogen economy, which is required to lead the energy transition, as it brings together the experience of two globally renowned enterprises in their respective fields.

Market Key Players:

  • Nel Hydrogen
  • Asahi Kasei
  • Hydrogenics
  • Shandong Saikesaisi Hydrogen Energy Co., Ltd.
  • Teledyne Energy Systems
  • Siemens
  • Kobelco Eco-Solutions
  • Green Hydrogen Systems
  • Next Hydrogen
  • H-Tec Systems

Market Segmentation

By Type

  • PEM Electrolyzer
  • Alkaline Electrolyzer
  • Solid Oxide Electrolyzer

By Capacity

  • ≤ 500 kW
  • 500 kW – 2 MW
  • Above 2 MW

By Application

  • Steel plant
  • Power plants
  • Electronics and photovoltaics
  • Energy storage for fuel cells
  • Industrial gases
  • Power to gas
  • Others

By Geography

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • Middle East & Africa (MEA)

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