by The growing demand for reliable and continuous power supply has propelled the distributed generation market. Distributed generation refers to the small-scale power generation technologies installed near the end-users. It includes solar PV systems, wind turbines, fuel cells, microturbines, and reciprocating engines that generate electricity for on-site usage. The dispersed nature of distributed generation solutions offers enhanced energy security by reducing dependency on conventional power grids. Solar PV and wind turbines are widely adopted distributed energy resources due to their modular nature and minimal environmental footprint. The global distributed generation market is estimated to be valued at US$ 270.46 Bn in 2023 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving the distributed generation market is the shift towards sustainable energy resources. Stringent regulations regarding carbon emissions from conventional power plants have accelerated investments in renewable distributed generation technologies. Governments across regions are providing financial incentives and subsidies for the deployment of small-scale solar and wind power projects. Furthermore, technological advancements have improved the efficiency and energy output of distributed generation systems. The integration of IoT sensors and cloud computing enables remote monitoring of distributed assets for predictive maintenance. Falling costs of solar panels and wind turbines is another factor boosting the distributed generation adoption. The emergence of microgrids that integrate distributed energy resources with storage also presents significant growth opportunities.
Porter’s Analysis
Threat of new entrants: The threat of new entrants into the distributed generation market is moderate. While development and capital costs for setting up new generation units are high, falling costs for renewable technologies like solar PV and wind present opportunities for new companies.
Bargaining power of buyers: The bargaining power of buyers in the distributed generation market is high. Buyers have several technology choices when it comes to distributed energy and switching costs are relatively low. This gives buyers leverage to negotiate on price and quality of service.
Bargaining power of suppliers: The bargaining power of suppliers in the distributed generation market is moderate. While technology providers and equipment manufacturers hold some unique technical expertise, the availability of several supplier options curbs their influence over price and purchasing decisions.
Threat of new substitutes: The threat of substitutes in the distributed generation market is high. Ongoing technology advancement is enabling greater integration of distributed energy resources like energy storage and demand response with distributed generation systems. These substitutes increase renewable energy utilization and grid flexibility.
Competitive rivalry: Competition in the distributed generation market is high among leading firms. Players compete based on technology innovation, quality, pricing, local expertise and customer services to gain market share.
Key Takeaways
The Global Distributed Generation Market Size is expected to witness high growth over the forecast period supported by rising demand for decentralized renewable sources of energy across commercial and industrial sectors.
Regional analysis: North America dominates the distributed generation market currently owing to significant policy support for clean energy adoption in the US and Canada. Asia Pacific is expected to depict the fastest growth among all regions stoked by ongoing energy capacity expansion programs and investments in renewables by countries like China and India.
Key players: Key players operating in the distributed generation market are Doosan Heavy Industries & Construction,Toyota Turbine and Systems Inc.,Ballard Power Systems Inc.,Mitsubishi Electric Corp. ,Suzlon Energy Ltd.,Vestas Wind Systems A/S,Rolls-Royce Plc,Capstone Turbine Corp.,Sharp Corp.,General Electric. Doosan Heavy Industries & Construction is a leading player in the gas power generation segment while Vestas and Suzlon have a large share in the wind power market. Ballard and Toyota focus on fuel cells and microturbines respectively.
