What Has Been the Growth Trajectory for the Distributed Generation Market in Recent Years?
The distributed generation market has seen considerable growth due to a variety of factors.
• The scale of the distributed generation market has seen fast-paced expansion in recent times. We can anticipate its rise from $106.86 billion in 2024 to a staggering $120.73 billion in 2025, demonstrating a compound annual growth rate (CAGR) of 13.0%.
Factors contributing to this surge during the historical period include energy self-sufficiency, ecological issues, governmental incentives and the resilience of the grid.
How Does the Forecast Look for the Distributed Generation Market?
The distributed generation market is expected to maintain its strong growth trajectory in upcoming years.
• The market size for distributed generation is set to witness a swift expansion in the upcoming years. Forecasted to hit a massive $198.45 billion by 2029, it has a projected compound annual growth rate (CAGR) of 13.2%.
This anticipated growth within the forecast period can be linked to the trend towards decentralization, the integration of renewable energy, advancements in energy storage, and the popularity of electric vehicles (EVs). The major factors likely to shape this market in the forecast period are the rise in digitalization and IoT, technological innovation, the emergence of microgrids, the incorporation of hybrid systems, developments in edge computing and AI, the Energy as a Service (EaaS) model, and a focus on flexibility and scalability.
What Are the Critical Driver Fuelling the Distributed Generation Market's Growth?
The distributed generation market is anticipated to grow due to the escalation in electricity consumption. The term electricity consumption pertains to the quantity of electrical energy used up during a specific duration, measured in Wh or kWh units. Distributed generation employs various technologies to generate electricity for on-site use, hence, a surge in electricity consumption augments its demand. For example, the U.S Energy Information Administration, a governmental agency in the United States mentioned in 2022 that there was roughly a 3.2% increase in total U.S. end-use electricity consumption compared to 2021. The residential sector saw a rise of 2.6% in retail electricity sales while the commercial sector saw a rise of 4.7%. Consequently, the rise in electricity consumption is predicted to stimulate the demand for distributed generation systems throughout the projected period.
How Is the Distributed Generation Market segmented?
The distributed generation market covered in this report is segmented –
1) By Technology: Fuel Cells, Micro-Turbines, Wind Turbines, Combustion Turbines, Micro-hydropower, Reciprocating Engines, Solar PV, Other Technologies
2) By Application: On-Grid, Off-Grid
3) By End User: Commercial, Industrial, Residential
Subsegments:
1) By Fuel Cells: Proton Exchange Membrane Fuel Cells (PEMFC), Solid Oxide Fuel Cells (SOFC), Molten Carbonate Fuel Cells (MCFC)
2) By Micro-Turbines: Gas-Fueled Micro-Turbines, Biogas Micro-Turbines
3) By Wind Turbines: Small Wind Turbines, Vertical Axis Wind Turbines (VAWT)
4) By Combustion Turbines: Gas Turbines, Dual-Fuel Turbines
5) By Micro-Hydropower: Pico-Hydro Systems, Small-Scale Hydropower Solutions
6) By Reciprocating Engines: Gas-Fueled Engines, Diesel Engines
7) By Solar PV: Rooftop Solar PV Systems, Ground-Mounted Solar PV Systems
8) By Other Technologies: Biomass Generation, Geothermal Systems
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What New Trends Are Influencing the Distributed Generation Market?
Developments in technology are becoming a significant trend in the distributed generation market. Companies in this sector are creating more advanced products to reinforce their market standing. For example, in May 2022, Delta India, an affiliate of Delta Electronics Inc., a Taiwanese company involved in distributed generation, introduced a medium-voltage QPR product named 11kV 3-phase Power Quality Restorer. This was designed to tackle various power quality issues, including voltage instability, flickering, equipment malfunctions, and others, with increased efficiency. Furthermore, the 11Kv3-Phase QPR has the ability to provide current harmonic correction in both leading and lagging reactive power, adjust power load imbalance, regulate voltage, and lower electric bills within an organization by preventing power factor fines and harmonic surcharges.
Who Are the Key Players in the Distributed Generation Market?
Major companies operating in the distributed generation market include:
• Siemens AG
• General Electric Company
• Schneider Electric SE
• Mitsubishi Heavy Industries Ltd.
• Caterpillar Energy Solutions GmbH
• ASEA Brown Boveri Ltd.
• AES Corporation
• Ameresco Inc.
• Ansaldo Energia S. p. A.
• Ballard Power Systems Inc.
• Bloom Energy Corporation
• Capstone Turbine Corporation
• Ceres Power Holdings plc
• Clearway Energy Inc.
• Cummins Inc.
• Doosan Fuel Cell America Inc.
• E. ON SE
• Enel Green Power S. p. A.
• FuelCell Energy Inc.
• Hitachi Ltd.
• Hydrogenics Corporation
• Iberdrola S. A.
• Invenergy LLC
• Johnson Controls International plc
• SMA Solar Technology AG
• SolarEdge Technologies Inc.
• Sonnen GmbH
• SunPower Corporation
• Tesla Inc.
• Linde plc
• Toshiba Corporation
• TotalEnergies SE
What Is The Most Dominant Region In The Distributed Generation Market?
Asia-Pacific was the largest region in the distributed generation market in 2024.North America is expected to be the fastest-growing region in the distributed generation market share during the forecast period. The regions covered in the distributed generation market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
