Distributed Generation Market Size, Share, and Trends 2024 to 2034

The global distributed generation market size was estimated at US$ 200 billion in 2022 and is expected to reach over US$ 712.67 billion by 2032, poised to grow at a notable CAGR of 13.60% from 2023 to 2032.

Distributed Generation Market Size in the Asia Pacific 2023 to 2032

The Asia Pacific distributed generation market size was valued at US$ 92 billion in 2022 and is predicted to be worth around US$ 330.73 billion by 2032, representing at a CAGR of 13.70% from 2023 to 2032.

Asia Pacific dominated the global distributed generation market, garnering a market share of over 45% in 2022. This is simply attributed to the increased adoption of renewable energy sources, rising investments in the industrialization and urbanization, rapidly growing infrastructural developments, and increasing government initiatives to encourage the deployment of renewable and green & clean energy sources. Moreover, with the growing industrialization, the demand for the efficient and uninterrupted power supply is growing significantly, which is fueling the growth of the distributed generation market in Asia Pacific.

North America is estimated to witness a significant growth rate during the forecast period. The huge demand for the wind energy in North America and rapidly growing demand for the solar energy across the commercial and industrial units is expected to fuel the demand for the distributed generation technologies.

The European countries such as Germany and Italy have huge demand for the wind and solar energy. This is attributed to the strict government norms regarding the use of renewable energy. The fuel cells are witnessing huge demand in overall Europe owing to its higher energy efficiency. The increased awareness regarding the climate change and negative effects of carbon emission has resulted in the huge demand for the clean and green energy in Europe. The government has strict regulations regarding the industrial and commercial use of energy pertaining to the renewable sources, which has fueled the growth of the distributed generation market in Europe.

Growth Factors

The global distributed generation market is primarily driven by various factors such as rising demand for electricity, rising government initiatives to control the greenhouse gases emission, and declining costs of solar energy. Distributed energy refers to the power generation and consumption at the same point. The capability of the distributed generation to fulfil the energy needs of a particular residential or commercial unit is fueling the demand for the distributed energy. The increasing need for uninterrupted and efficient power supply is significantly driving the demand for the distributed generation. The increased government initiatives and policies to restrict the emission of greenhouse gases and rising adoption of green energy is supporting the growth of the global distributed generation market. Many state and local government are implementing favorable laws for the deployment of renewable energy sources, which is driving the market growth. Moreover, the rising investments in the research & development of the new technologies for the distributed generation are estimated to have a positive impact on the market.

The distribute generation technology is more affordable and cheaper than the traditional energy generation systems that favors the adoption of the distributed generation. Moreover, the availability of wider variety of sources such as wind, solar, micro turbines, gas turbines, reciprocating engines, and fuel cells further promote the adoption of the distributed generation systems across commercial and residential sectors. The rapid industrialization and rapid urbanization are among the major factors that are estimated to drive the growth of the distributed generation market. Moreover, the development of smart cities in several countries is estimated to boost the demand for the distributed generation as governments are planning to adopt 100% renewable energy sources. The cost-effectiveness and efficient power supply is a major factors that is boosting the demand for the distributed generation. Furthermore, the government is providing incentives and subsidies to the commercial and industrial sectors to achieve the target of shifting to the renewable energy. This another factor, which is significantly encouraging the industrial and the commercial sectors to shift towards the distributed energy.

Scope of the Distributed Generation Market

Technology Insights

Based on the technology, the fuel cell segment dominated the global distributed generation market, garnering a market share of over 35% in 2022. The increased adoption of the fuel cells in the distributed generation system owing to various benefits such as high efficiency, lower emissions, and capability of converting chemical energy into electrical energy has fostered the growth of this segment. The fuel cells provide 60% higher efficiencies, which is a major driver of the fuel cell segment.

The solar PV segment is expected to be the fastest-growing segment during the forecast period. The government subsidies for the adoption of solar energy and declining costs of the solar equipment over the past few years has increased the demand for the solar PV distributed generation market. Moreover, the rising government and corporate efforts to reduce carbon footprint and achieve sustainability in the long term, majority of the industries are shifting towards the adoption of solar sources of energy.

End User Insights

The commercial & industrial segment garnered a market share of around 70% and dominated the global distributed generation market in 2020. This is attributed to the increased government initiatives to promote the adoption of the renewable energy sources across the commercial and industrial sectors in the form of subsidies and incentives. Moreover, the reducing equipment costs and increased demand for the uninterrupted power supply has fostered the growth of this segment. Moreover, the increased efforts of the government to industrialize and urbanize the rural regions are supporting the growth of the commercial & industrial segment and hence this segment is expected to dominate throughout the forecast period.

On the other hand, the residential segment is estimated to be the most opportunistic segment during the forecast period. The rising number of big residential complexes and rapid urbanization of the rural regions are the most prominent factors that drive the growth of the residential segment. The increasing adoption of the distributed generation systems for heating, ventilation, cooling, and cooking applications is expected to spur the demand in the residential segment.

Key Market Developments

The distributed generation market is moderately fragmented with the presence of several local companies. These market players are competing to strengthen their market position by adopting strategies, such as partnerships, acquisitions, new product launches, and collaborations. Companies are also spending on the development of enhanced and efficient products. Moreover, they are also focusing on maintaining competitive pricing.

• In July 2019, FuelCell Energy reported regarding its plan to re-launch sub-MW distributed generation system in European countries such as Germany, Spain, UK, and Italy.
• In June 2019, Ameresco completed its project named 10MW Distributed Energy Security that involved a cost of US$91 million. This system has the capability to withstand seismic and storm conditions.
• In June 2019, Cummins, Inc. started supplying gas generators for producing 5000MW energy to supply power to the UK National Grid.

Some of the prominent players in the global distributed generation market include:

• Siemens
• General Electric
• Mitsubishi
• Schneider
• Caterpillar Power Plants
• Doosan Fuel Cell America
• Vestas Wind Systems A/S
• Rolls-Royce Power Systems AG
• Toyota Turbine and Systems Inc.
• Capstone Turbine Corporation

Segments Covered in the Report

By Technology

• Fuel Cells
• Micro-Turbines
• Wind Turbines
• Combustion Turbines
• Micro-hydropower
• Reciprocating Engines
• Solar PV
• Others

By End User

• Commercial
• Industrial
• Residential

By Application

• On-Grid
• Off-Grid

By Geography

• North America
• U.S.
• Canada
• Europe
• U.K.
• Germany
• France
• Asia Pacific
• China
• India
• Japan
• South Korea
• Latin America
• Brazil
• Rest of Latin America
• Middle East & Africa (MEA)
• GCC
• North Africa
• South Africa
• Rest of Middle East & Africa