Distributed Generation Market Is Estimated To Witness High Growth Owing To Opportunity In Decentrali

Author : Ashish Thapa | Published On : 15 Jan 2024

Distributed generation refers to the production of electricity from multiple small power plants as an alternative to large centralized facilities. Distributed energy systems such as rooftop solar panels, microgrid fuel cells and small wind turbines provide clean and reliable energy to homes and businesses. Decentralized power generation reduces dependence on fossil fuels and power transmission losses. The modular and flexible designs of distributed energy technologies allow consumers to customize solutions based on their energy needs and contribute locally produced electricity back to the grid.

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 Opportunity

The rapid growth of distributed energy presents a huge market opportunity for developers, component suppliers and service providers. Decentralized systems offer energy security, reduced cost of living and better environmental stewardship. Advancing microgrid technologies, energy storage solutions along with emergence of renewable fuels for back-up power will further strengthen decentralized power infrastructure. Partnerships with utilities, governments and rural communities can help accelerate distributed generation adoption for both on and off-grid applications worldwide.

Porter’s Analysis
Threat of new entrants: The threat is moderate as the distributed generation market requires high upfront capital investment and established distribution channels. Bargaining power of buyers: The bargaining power of buyers is high due to the presence of many distributed energy suppliers in the market offering similar products. Bargaining power of suppliers: The bargaining power of suppliers is low as there are many component manufacturers for solar panels, wind turbines, etc. Threat of new substitutes: The threat is moderate as alternative off-grid and self-generation options using other renewable sources are emerging. Competitive rivalry: The competitive rivalry is high among the existing players to gain more market share and expand their geographical presence.

SWOT Analysis
Strength: Distributed generation reduces dependency on grid infrastructure and offers an independent source of power. It helps reduce carbon footprint by utilizing renewable sources like solar and wind. Weakness: High initial investment and maintenance costs associated with distributed generation systems hinder widespread adoption. Intermittent power supply from renewable sources requires battery backup. Opportunity: Government policies and incentives promoting renewable energy generation will boost adoption of distributed systems across commercial and residential sectors. Threats: Technological advancements may make existing systems obsolete rapidly. Dependence on weather conditions for solar and wind based systems introduce element of uncertainty.

Key Takeaways
The global Distributed Generation Market Demand is expected to witness high growth during the forecast period due to supportive government policies promoting renewable sources of energy.

The Asia Pacific region dominates the market currently due to presence of major solar panel and wind turbine manufacturers in China. The region is expected to retain its leading position with countries like India also emerging as promising markets.

Key players operating in the Distributed Generation market are Adaptivation, Inc., Amedia Corporation, AbleNet, Inc., HumanWare Group, ViewPlus, and VFO. Regulatory standards and incentives vary across regions and countries influencing adoption rates. However, growing awareness about climate change and cost benefits of distributed generation over conventional sources will boost its deployment worldwide in the long run.

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