December 14, 2024

The Distributed Generation Market Driven by Rising Energy Demand and Concerns for Sustainable Power Generation

Distributed generation refers to small power sources connected directly to the distribution network or on the consumer’s side of the meter. This includes small-scale renewable energy resources like solar PV systems, combined heat and power or trigeneration units, and backup generators that supply electric power at or near end-use facilities. Distributed generation provides numerous advantages over central power stations including lower transmission and distribution losses, emission reductions, and an optimum utilization of renewable energy sources. The growing energy demand coupled with stringent regulations to curb emissions have encouraged end-users to install distributed generation systems that can provide reliable and sustainable power.

The global Distributed Generation Market is estimated to be valued at US$ 364.46 Billion in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends: One of the major trends boosting the distributed generation market is the rapid adoption of renewable energy resources. Countries worldwide are promoting the deployment of renewable power plants through subsidies, tax incentives and net metering policies. Solar PV technology accounts for the bulk of new capacity additions in distributed generation space. Furthermore, the emergence of energy storage technologies is enabling increased self-consumption of renewable power at consumer sites. Advances in battery technology is supporting the coupling of distributed generation and storage systems which can provide reliable electricity and help build resilience against power outages.

Porter’s Analysis

  • Threat of new entrants: The threat of new entrants in the distributed generation market is moderate. Significant capital investments are required to enter this market and compete with established players.
  • Bargaining power of buyers: The bargaining power of buyers is high due to the presence of several options from various manufacturers. Buyers can negotiate on price and quality.
  • Bargaining power of suppliers: The bargaining power of suppliers is moderate as there are many component manufacturers for critical parts used in distributed generation systems.
  • Threat of new substitutes: The threat of new substitutes is low as distributed generation provides localized and reliable power, which is difficult to replace.
  • Competitive rivalry: Competition in the distributed generation market is high owing to the presence of numerous global and regional players offering similar products.

Key Takeaways

The global Distributed Generation Market is expected to witness high growth. The market size is projected to reach US$ 364.46 billion by 2024 from US$ 120 billion in 2022, rising at a CAGR of 14% during the 2024-2031 period.

Regional analysis: North America dominated the distributed generation market in 2022 and is expected to maintain its lead through 2031. Rapid infrastructural development and supportive government policies for clean energy usage drive the regional market. The Asia Pacific region is anticipated to exhibit the fastest growth owing to increasing demand from countries like China and India.

Key players: Key players operating in the distributed generation market are Siemens, General Electric, Schneider Electric, Tesla, Panasonic, Doosan Fuel Cell, Bloom Energy, Ballard Power Systems, and Plug Power. These players are focusing on product launches and collaborations to expand their geographic footprint and enhance technology capabilities.

Ravina
+ posts

Ravina Pandya, a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals. 

Ravina Pandya

Ravina Pandya, a content writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemicals and materials, etc. With an MBA in E-commerce, she has expertise in SEO-optimized content that resonates with industry professionals. 

View all posts by Ravina Pandya →