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The distributed energy generation market size is estimated to grow at a CAGR of 11.26% between 2022 and 2027. The market size is forecast to increase by USD 179.28 billion. The growth of the market depends on several factors, including the transition towards electric vehicles (EVs), the declining cost of solar PV panels, and increasing investments in renewable energy.
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A key factor shaping the distributed energy generation market growth is the increasing renewable energy penetration. Increasing renewable energy penetration is an imperative trend in the energy sector and a key driver of the transition to a more sustainable and low-carbon future. The distributed energy generation market is witnessing a rapid increase in renewable energy installations, driven by declining costs, supportive policies, and environmental concerns. Technological advancements in distributed energy generation technologies are playing a critical role in market expansion.
Solar photovoltaic (PV) panels, wind turbines, energy storage systems, and smart grid technologies have seen substantial improvements in cost-effectiveness efficiency, and performance. These technological advancements are driving the deployment of distributed energy generation and enhancing its reliability and integration capabilities. However, growing awareness of the environmental impacts of fossil fuel-based energy generation has led to renewable energy adoption, which is expected to increase the growth of the globally distributed energy generation market during the forecast period.
The market share growth by the residential segment will be significant during the forecast period. Residential distributed energy generation refers to the generation of electricity or heat by small-scale energy systems installed in residential buildings.
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Growing awareness about climate change and the importance of sustainable living has prompted many homeowners to seek cleaner and more environmentally friendly energy options. Residential distributed energy generation offers homeowners several benefits, including reduced electricity bills, lower carbon emissions, increased energy independence, and improved resilience during power outages. Thus, the demand for distributed energy generation is high in the residential segment which is expected to have a good impact on the growth of the global distributed energy generation market during the forecast period.
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APAC is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Distributed energy generation has been gaining momentum in the Asia-Pacific (APAC) region as countries seek to address reduce carbon emissions, energy security, and promote sustainable development. Distributed energy generation, especially from renewable sources like solar and wind, offers a cleaner and more sustainable alternative to fossil fuel-based electricity generation. For instance, China has introduced feed-in tariffs and subsidies to promote solar and wind power installations. Australia offers financial incentives and grants for residential solar and storage systems. Due to its population size, economic growth, and rising energy demand, APAC presents significant market potential for distributed energy generation. APAC is also home to leading manufacturers of solar panels, wind turbines, and battery technologies, further driving the growth of the market in focus during the forecast period.
In 2020 due to the COVID-19 pandemic, restrictions on movement and supply chain disruptions in the region caused delays in distributed energy generation installations. Installation and construction activities were affected due to lockdown measures and social distancing requirements, leading to project delays in various regions. However in 2021, with large-scale vaccination programs initiated by governments, the market in focus started recovering. The pandemic has increased the importance and awareness of the need to transition to cleaner and more sustainable energy sources. Governments and international organizations are prioritizing green recovery plans, emphasizing investments in renewable energy and distributed energy generation as part of economic stimulus packages. This focus on sustainability is driving market growth during the forecast period.
The transition towards electric vehicles (EVs) is one of the key factors driving the distributed energy generation market. The widespread adoption of EVs requires a robust charging infrastructure. Distributed energy generation can play a vital role in powering EV charging stations, especially at commercial, residential, and public locations.
The rising demand for electricity from EV charging can strain the grid, particularly during peak hours distributed energy generation, combined with smart charging and demand management systems, can help balance the load on the grid. By integrating EV charging with distributed energy generation, it becomes possible to optimize charging schedules, reduce peak demand, and maximize the use of renewable energy resources. However, increased preference for EVs across the globe is expected to enhance the overall growth of the global distributed energy generation market during the forecast period.
High equipment and installation costs are one of the key challenges hindering the distributed energy generation market. The initial investments required for buying and installing the equipment, such as wind turbines or solar panels, can be significant. The cost of high-quality components, advanced technology, and skilled labor contribute to the overall expense.
Distributed energy systems often require additional infrastructure, such as power inverters, energy storage systems, and grid interconnection equipment. These components increase the overall cost of the system and ensure reliable integration with the existing electrical grid. The requirement of a vast area for panels to generate a large amount of electricity is the major reason for the increased investment rates. However, high costs associated with distributed energy generation is expected to hinder the growth of the global market in focus during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Distributed Energy Generation Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Ansaldo Energia Spa: The company offers distributed power generation solutions such as electric generators for hydroelectric, geothermal, and fossil fired plants for a full century.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The distributed energy generation market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Distributed Energy Generation Market Scope |
|
Report Coverage |
Details |
Page number |
166 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 11.26% |
Market growth 2023-2027 |
USD 179.28 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
10.78 |
Regional analysis |
APAC, Europe, North America, South America, and Middle East and Africa |
Performing market contribution |
APAC at 33% |
Key countries |
US, China, India, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Ansaldo Energia Spa, Bloom Energy Corp., Canadian Solar Inc., Capstone Green Energy Corp., Caterpillar Inc., Cummins Inc., Doosan Corp., ENERCON GmbH, First Solar Inc., FuelCell Energy Inc., General Electric Co., Mitsubishi Electric Corp., Nextera Energy Inc., Orsted AS, Rolls Royce Holdings Plc, Schneider Electric SE, Siemens AG, Sunverge Energy Inc., Toyota Motor Corp., and Vestas Wind Systems AS |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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