The Distributed Generation market is estimated to be valued at US$ 83.9 billion in 2021 and is expected to exhibit a CAGR of 10.43% over the forecast period 2022-2030, as highlighted in a new report published by Coherent Market Insights.
The Distributed Generation market refers to the generation of electricity from various small-scale energy sources located near the end-users. This market includes technologies such as solar photovoltaic (PV), wind power, and combined heat and power (CHP). Distributed generation provides numerous benefits, including; reduced transmission losses, increased grid reliability, and reduced dependency on traditional power sources. The market encompasses applications in industries, residential buildings, and commercial establishments. Moreover, the increasing adoption of renewable energy sources, government support through favorable policies and incentives, and the rising demand for electricity are major factors driving the growth of the distributed generation market.
The distributed generation market is driven by two key factors. Firstly, the government support and favorable policies promoting the adoption of renewable energy sources have significantly propelled the market growth. Governments worldwide are promoting distributed generation as an alternative to conventional energy, thereby reducing dependence on fossil fuels and mitigating greenhouse gas emissions. Additionally, incentives and subsidies provided by governments for the installation and operation of distributed generation systems have further accelerated the market growth.
Secondly, the increasing energy demand, particularly in residential and commercial sectors, has boosted the market for distributed generation. The growing need for a reliable and uninterrupted power supply, coupled with the rising electricity consumption, has led to a surge in the deployment of distributed generation systems. These systems offer localized power generation, reducing transmission losses and ensuring a steady supply of electricity. This, in turn, is driving the market growth.
In conclusion, the distributed generation market is expected to witness high growth due to government support and increasing energy demand.
The distributed generation market can be segmented based on technology and end-use. In terms of technology, the market can be divided into solar PV, wind turbine, reciprocating engines, micro turbines, and fuel cells. Among these, solar PV dominates the market, with a significant market share. This can be attributed to the increasing adoption of solar power as a renewable energy source. Solar PV systems have become more affordable and efficient, driving their popularity among residential, commercial, and industrial users. Additionally, government incentives and policies promoting solar energy further contribute to the dominance of this segment.
Political: Governments worldwide are focusing on reducing carbon emissions and promoting renewable energy sources. This has led to favorable policies and regulations for distributed generation, creating growth opportunities in the market.
Economic: The declining cost of renewable energy technologies, such as solar PV and wind turbines, makes distributed generation economically viable. Additionally, the potential for cost savings on electricity bills and the availability of financial incentives further drive the market.
Social: Increasing awareness about environmental sustainability and the need for clean energy solutions among consumers is fueling the demand for distributed generation systems. Additionally, the decentralized nature of distributed generation appeals to individuals and businesses seeking energy independence.
Technological: Advancements in technology, such as improved solar panel efficiency and battery storage systems, are enhancing the performance and feasibility of distributed generation. Integration of smart grid technologies also enables efficient management and utilization of distributed generation systems.
The global Distributed Generation Market Share is expected to witness high growth, exhibiting a CAGR of 10.43% over the forecast period of 2022-2030. This growth is primarily driven by the increasing focus on renewable energy sources and the need to reduce carbon emissions. Solar PV is the dominating segment, accounting for a significant market share, due to its affordability, efficiency, and government support.
In terms of regional analysis, Asia Pacific is the fastest-growing and dominating region in the distributed generation market. The region has witnessed significant investments in renewable energy projects, coupled with supportive government policies and subsidies. China and India are the major contributors to the market growth in this region.
Key players operating in the distributed generation market include Siemens AG, General Electric, Schneider Electric SE, Mitsubishi Motors Corporation, and Capstone, among others. These companies are focusing on research and development activities to enhance product offerings and expand their market reach. The market is characterized by intense competition and strategic partnerships to gain a competitive edge.