Distributed Energy Generation Market (By Application: Residential, Commercial & Industrial; By Technology: Fuel Cells, Solar PV) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2022-2030

The global distributed energy generation market size was estimated at around USD 249.93 billion in 2021 and it is projected to hit around USD 584.26 billion by 2030, growing at a CAGR of 9.89% from 2022 to 2030

The increasing need for energy and the high costs of grid expansion are the major factors driving the market growth. Low prices of Distributed Energy Generation (DEG) as compared to the conventional power generation methods are expected to provide a boost to the market.

Moreover, inventions in DEG techniques, including floating solar PV, is expected to drive the market. Declining costs of solar PVs is playing a contributory role in the expansion of the market. Feed-in tariffs in regions, such as North America, Europe, and the Asia Pacific, are poised to stir up the growth of the market. Favorable government policies and other government regulations including net metering are expected to increase the number of DEG installations at residential locations, such as underdeveloped and rural areas.

Extensive R&D, field trials, and demonstration projects have resulted in decreasing costs of DEG technologies, which, in turn, augmented market growth. China, India, and Japan are some of the key countries where energy demand has risen significantly. The grid connections are incapable of meeting such high demands that are further supplemented with energy loss problems and blackouts. As a result, institutions, schools, and universities opt for small power-generating stations using renewable sources. This is expected to grow the demand for this market.

Scope of The Report

Technology Insights

The fuel cells segment led the market in 2021 accounting for the largest share of over 36%. Fuel cells have numerous benefits over other conventional technologies. Fuel cells operate at higher efficiencies, convert chemical energy into fuel to electrical energy, and provide efficiencies up to 60% and have lower emission levels.

Solar PV technology, the fastest-growing form of renewable energy, is estimated to register the maximum CAGR from 2020 to 2030. In this technology, PV modules made from semiconductor materials are exposed to solar rays, thereby creating an electrical current. Wind turbine technology will register a significant growth owing to the growing number of installations of wind turbines in China, which is driven by the reduced feed-in tariffs.

Wind turbines find applications in agriculture, industrial, educational, and residential sectors. In agricultural fields, wind turbines provide energy to irrigation pivots, heating, and lighting applications and processing equipment. Challenging economic conditions and growing budget constraints are expected to restrain market growth. However, rising environmental concerns are expected to be the key factor responsible for segment growth.

Gasoline- and diesel-fueled reciprocating engines are commonly used for standby application and create a significant amount of pollution, in terms of noise and emissions. Hence, cleaner natural-gas fired engines are being developed to address the pollution concerns.

Application Insights

Commercial & industrial application types accounted for the largest market share of over 70% in 2021 owing to low product installation costs along with easy access to utility areas. In addition, governments around the globe are advancing policies to increase the deployment of renewable technologies in these applications as they provide higher efficiency, energy security, emission reduction, and higher resiliency compared to conventional electricity generation methods.

The growing adoption of solar photovoltaic units for power generation owing to its ability to provide quality and clean power is likely to drive the demand for DEG systems over the forecast period. Large-scale solar PV units are ideal for heavy industrial applications whereas small- to medium-scale units fulfill the energy demands in the commercial applications.

Frequent outages coupled with increasing electricity costs are expected to have a positive impact on the DEG industry growth. Favorable government policies coupled with supportive regulations, such as net metering, are expected to increase the number of DEG installations globally.

Heating and ventilation of floor spaces, along with the cooking and cooling applications have fueled the DEG systems demand globally. DEG systems, namely solar PV systems, are mounted on buildings that easily interconnect with the grid. These systems transmit the excess generation to the grid during the day and draw power from the grid during the night.

Regional Insights

Asia Pacific led the global market in 2021 accounting for the largest share of over 47%. The region will retain its dominant position expanding at the fastest CAGR from 2022 to 2030. The increasing demand for energy due to rising population coupled with rapid urbanization in countries, such as India, China, Indonesia, and Malaysia, is likely to be the key factor for the market growth. The product demand in China, in particular, is largely catered by the urban cities of the nation. The increasing disposable income levels in the country are also expected to drive the market in China.

North America is projected to have significant growth over the forecast period. The wind turbine has the highest market share in this regional market. However, solar PV is the fastest-growing segment due to declining costs, wider geographic distribution products under the solar lease, and third-party ownership models.

The product demand in Europe is largely catered by Germany and Italy. Demand for solar PV and wind turbines is expected to grow rapidly in the regional market owing to increasing renewable energy targets and the number of supportive policies set by the governments. The European Commission has set its target to reduce GHG emissions by 40% by 2030.

Fuel cells are another major technology used in Europe with CHP. It provides benefits compared to a single-fueled generator and its cost-effective installation boosts the demand for CHP systems in a variety of applications including residential buildings, oil & gas production facilities, and other commercial applications.

The MEA is expected to grow at a significant rate owing to the increased adoption of DEG for industrial applications. The solar PV system industry has been growing substantially, particularly in South Africa, owing to the growing need for clean energy, which, in turn, is expected to fuel the industry in MEA. The availability of solar and wind energy in MEA countries, particularly in Saudi Arabia and Egypt, is one of the primary factors attracting various end-use industries to opt for renewable energy sources.

Key Players

• Vestas Wind Systems A/S
• Capstone Turbine Corp.
• Caterpillar
• Ballard Power Systems Inc.
• Doosan Heavy Industries & Construction
• Rolls-Royce plc.
• Suzlon Energy Ltd.
• General Electric
• Siemens
• Schneider Electric
• ENERCON GmbH
• Sharp Corp.
• First Solar
• Mitsubishi Electric Corp.
• Toyota Turbine and Systems Inc.

Market Segmentation

• By Technology Outlook

• Wind Turbine
• Solar Photovoltaic
• Reciprocating Engines
• Fuel Cells
• Gas & Steam Turbine
• By Application Outlook
• Residential
• Commercial & Industrial
• By Regional Outlook
• North America

• The U.S.
• Canada
• Mexico
• Europe
• Germany
• The U.K.
• Italy
• Asia Pacific
• China
• India
• Australia
• Central and South America
• Brazil
• The Middle East & Africa