Distributed Energy Generation Market

The global Distributed Energy Generation Market is valued at USD 379.8 Billion in 2024 and is projected to reach a value of USD 1196.4 Billion by 2035 at a CAGR (Compound Annual Growth Rate) of 11.00% between 2025 and 2035.

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The production of electricity for on-site use is referred to as a "distributed generation system," sometimes known as a "decentralized generation system" or an "on-site generation system." Solar and wind power are used to create environmentally responsible and pollution-free energy. It generally ignores the need for energy transmission from big, centrally located power-producing facilities like coal-fired or nuclear power plants into the electric grid.

Promoting distributed generation has become increasingly critical due to the huge rise in global power demand in commercial, industrial, and residential applications. To reduce and manage centralized power loads, do this. Additionally, the majority of the developing world still needs more electricity sources. This has increased demand for environmentally friendly, distributed electricity generation.

The main drivers of market revenue growth are government laws, greenhouse gas (GHG) emission reduction targets, rising R&D initiatives to create novel technologies, and rising environmental consciousness. Distributed Energy Generation systems can produce renewable and non-renewable energy sources, offering a small-scale power generation alternative or complementing conventional electric power infrastructure. Thanks to distributed generation, energy can be produced from various sources, including the wind, the sun, reciprocating engines, turbines, and biomass. Another advantage of distributed generation is that it obviates the need for long-distance power transmission lines by enabling energy production in off-the-grid locations.

It is nearly impossible to produce, transfer, or use energy without significantly impacting the environment; hence, energy and environmental issues are closely linked. Some environmental problems directly related to the production and consumption of energy include air pollution, climate change, water pollution, thermal pollution, and solid waste disposal. Global CO2 emissions from energy combustion and industrial processes recovered in 2021 to reach their highest-ever annual level, according to the International Energy Agency (IEA). This was a 6% increase from 2020 when emissions increased to 36.3 gigatonnes (GT). As consumers grow more conscious of environmental damage, they are transitioning to more environmentally friendly methods of energy generation, especially from renewable energy sources.

The agricultural, industrial, educational, and residential sectors use wind turbines. Wind turbines supply power to processing machinery, heating, lighting, and irrigation pivots in agricultural fields. Market expansion is likely constrained by difficult economic conditions and expanding financial limitations. However, it is anticipated that the primary driver of industry expansion will be escalating environmental concerns.

Top Market Trends

1. Government initiatives to reduce greenhouse gas (GHG) emissions are increasing: The growth of the Distributed Energy Generation market will be fuelled by rising government regulations and goals for reducing greenhouse gas (GHG) emissions throughout the projection period. Because of the advantages of renewable technology, such as energy security, resiliency, and carbon reductions, several states and municipal governments are developing policies to encourage the increased deployment of renewable technologies.

2. R&D projects for the creation of new technologies are being increased.: Additionally, it is anticipated that increased R&D efforts for the creation of new technologies will fuel market expansion. DEG systems are also less expensive than conventional power generation methods. As a result, the demand for a clean energy source and the affordability of the products are anticipated to positively influence market expansion throughout the anticipated timeframe. These are a few worldwide market trends for Distributed Energy Generation.

3. Growing demand for electricity and falling solar energy costs: The growing need for power, increased government measures to reduce greenhouse gas emissions, and falling solar energy costs are the main drivers of the global distributed generating market. The term "distributed energy" describes power production and consumption co-occurring. Demand for distributed energy is fueled by distributed generations capacity to meet a specific residential or commercial units energy needs. The growing need for an uninterrupted and effective power supply greatly fuels the demand for distributed generation. The expansion of the global distributed generation market is being aided by the growing government initiatives and policies to limit the emission of greenhouse gases and the expanding use of green energy.

Market Segmentation

The Distributed Energy Generation Market is segmented based on the segmentation categories- Technology, End-Use Industries, and Region. Based on Technology, the market is segmented into micro-turbines, combustion turbines, micro-hydropower, reciprocating engines, fuel cells, wind turbines, and solar PV. Furthermore, based on End-Use industries, the market is segmented into Residential, Commercial, and Industrial. In addition, based on Region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Technology

Solar PV Is a Significant Revenue Contributor Because Its the Fastest-Growing Form of Renewable Energy.

Solar PV technology is anticipated to have a significant CAGR during the projected time, as it is the renewable energy source that is expanding the fastest. An electrical current is produced when solar rays strike PV modules made of semiconductor materials. Due to decreased feed-in tariffs and rising wind turbine installations in China, wind turbine technology will advance rapidly. Compared to other technologies, fuel cells provide several advantages. Higher efficiency, the conversion of chemical energy into fuel, and fewer pollutants are all benefits of fuel cells. The fuel cells segment accounted for the largest share of the market in 2021. There are various advantages to using fuel cells over other traditional technologies. Fuel cells offer better efficiencies, transform chemical energy from fuel to electrical energy, and deliver up to 60% efficiency while emitting less pollution. Wind turbines are used in agricultural, industry, education, and residential settings. Wind turbines supply electricity to irrigation pivots, heating and lighting applications, and processing equipment in agricultural areas. Market growth is likely to be limited by challenging economic conditions and increased budget limitations. However, increased environmental concerns are projected to be the primary driver of industry expansion.

Based on End-Use industries

Commercial & Industrial Holds the Largest Share of the Industry due to lower equipment costs and a more constant need for power.

In 2023-24, the commercial & industrial segment dominated the global distributed generation market with a market share of over 70%. This results from increased government efforts, including incentives and subsidies, to encourage using renewable energy in the commercial and industrial sectors. Furthermore, this market has expanded due to falling equipment costs and a rising need for reliable power. Additionally, the governments enhanced attempts to industrialize and urbanize rural areas are helping the segments expansion. As a result, this segment is anticipated to dominate for the projected period. The increasing use of solar photovoltaic units for power generation because of their capacity to supply high-quality, clean energy is expected to fuel demand for DEG systems throughout the projected period. Large-scale solar PV systems are excellent for heavy industrial applications, whilst small- to medium-scale units meet commercial energy demands.

Based on Region

Asia Pacific is the Largest Revenue Contributor Due to Rapid Industrialization

In 2023-24, Asia Pacific’s highest revenue share was 46.9%, owing to governmental subsidies, solar installation regulations, and growing environmental concerns. This growth is ascribed to rising investments in industrialization and urbanization, rising investments in infrastructure development, and rising government programs to promote the deployment of renewable, green, and clean energy sources. Additionally, as industrialization progresses, there is an increased need for a reliable, efficient power supply, boosting the distributed generation market in the Asia Pacific. The Middle East & Africa is predicted to rise rapidly as DEG is more used in industrial applications. The solar PV system business has grown significantly, notably in South Africa, due to the increased need for clean energy, which is likely to fuel the sector in MEA. One of the key causes encouraging many end-use sectors to choose renewable energy sources is the availability of solar and wind energy in MEA nations, notably in Saudi Arabia and Egypt.

Competitive Landscape

The global Distributed Energy Generation market is dominated by companies such as Mitsubishi Electric Corporation, Schneider Electric, and Siemens because of their unique products, financial stability, strategic advances, and global reach. The participants are focusing their efforts on promoting R&D. Moreover, and they support strategic expansion activities, including product launches, partnerships, and joint ventures to expand their client base and boost their market position. Some of the key players in the Global Distributed Energy Generation Market include- Vestas (Denmark), to name a few.

Recent Market Developments

● In June 2022, Enrique Razon, a Filipino billionaire, unveiled intentions to partner with a growing number of local businesses to build the largest solar power facility in the world. The plans were made public by the infrastructure investment arm of Enrique Razon.

● In January 2021, The Energy Centre for Distributed Energy Enabled Homes will be unveiled by Schneider Electric 2021. Employing solar electricity, batteries, electric car chargers, and whole-home energy management is becoming more common.

Segmentation of the Global Distributed Energy Generation Market