Global Distributed Energy Generation Market 2025 – 2034

Reports Description

The Global Distributed Energy Generation Market Size was valued at USD 296.78 Billion in 2021 and is expected to reach USD 334.11 Billion in 2022, and is estimated to reach USD 932.34 Billion by the end of 2030 at a CAGR of approximately 16.5% during the forecast period 2025-2034.

The distributed energy generation market constitutes the various distributed energy sources of electrical generation and storage. Unlike centralized power systems, distributed energy generation sources are decentralized and flexible technologies with a capacity of 10 or less than 10 Megawatt. Distributed energy sources account for environmentally friendly and feasible technologies to supply power using different sources such as solar energy, wind energy, fuel cells, etc.

The distributed sources installation and usage include fuel cells, wind generating units, biomass generators, and all other renewable energy sources. It is advantageous in developing areas still lacking central power, and installing DER units may reduce the power system cost.

The distributed energy sources are used to power a single home, company, military base, college campus, etc. There are two types of distributed energy sources which are virtual and physical. The virtual sources are made of single or mixed types of physical assets widely used for utility purposes. One of the primary benefits of the distributed energy source over traditional sources can be the control of energy usage and generation, which mitigates extra energy wastage. Along with that, the distributed sources of a wide range of benefits such as communication and controls, aggregation software, metering equipment, and synchronization and connection.

Growth Factors

The increased usage of GHG emission reduction targets and government policies are the factors that drive market growth. Apart from that, the immense benefit of renewable energy sources such as carbon reduction, energy resiliency, and energy security support global market growth.

In addition, the R&D initiatives in developing advanced Technology regarding solar power are likely to drive market growth. The rise in demand for clean energy sources and low-cost production makes DEG systems better than traditional power generation techniques. Due to such reasons, the market is likely to propel in the forecast period. 

The government-driven initiatives and programs help the market growth in the industrial, commercial, and residential sectors. On the other hand, the extreme use of coal, oil, and gas in traditional energy generation has led to the rise in renewable energy sources for power generation.

The power from distributed energy sources can be produced onsite along with low-cost production and environment-friendly initiatives, which is the primary attributive factor for the market growth. The rise in demand for electric vehicles, grid-scale energy storage, and the factors such as decentralization and decarbonization has led to potential market growth.

Distributed Energy Generation Market, Segment Analysis 

Distributed Energy Market Segmentation based on Technology

Based on Technology, the distributed energy generation market is segmented into Micro-turbines, Combustion Turbines, Micro-hydropower, Reciprocating Engines, Fuel Cells, Wind Turbines, Solar PV, and others. Based on revenue, the fuel cell segment accounts for the largest share of the distributed energy market in 2021, with a CAGR rate of 19%, and is expected to maintain its leadership during the forecast period. However, solar PV panel is expected to have significant growth during the forecast period since it is the fastest-growing form of renewable energy.

The fuel cells are widely used in residential, commercial, and industrial sectors for backup power generation. Unlike storage batteries, they use oxygen and air as fuel for power generation. They are a great alternate source for backup power generation in remote places, spacecraft, communication centers, remote weather stations, etc. The fuel cells are compact and lightweight, and their efficient storage capacity.

Market Segmentation based on End-Use

Based on the end-use industry, the commercial segment accounts for the largest market share in 2021, with more than third revenue of the globally distributed energy generation market. With the rapid increase of the market that accounts for the highest CAGR rate, with 18.25 %, the commercial segment is also expected to lead the market during the forecast period. This can be attributed to the low-cost installation and production rate, coupled with the rise in demand for the usage of clean and renewable sources of energy. In addition, government policies such as feed-in-tariff and net-metering promote the rapid installation of distributed energy generation power, propelling the market growth. The industrial players have also introduced key projects to enhance market growth.

Report Scope

Regional Insights

The market is distributed across North America, Europe, Asia Pacific, and LAMEA. 

According to the analysis, the Asia Pacific accounts for the highest market share, with 47% in 2021, and continues to grow at its highest CAGR during the forecast period of 2025-2034. This can be attributed to the increased urbanization in countries like China, India, Indonesia, and Malaysia, along with the disposable income of consumers. The metropolitan cities of the nation are expected to drive market growth due to their increased product demands. The rapid installation of solar PV panels in residential and commercial industries, leading to the demand for clean and renewable energy sources, is the primary factor for the market growth across Asia.

The portable fuel cell systems have a high potential market size, accounting for up to 40% CAGR in the forecast period. These portable cells weigh less than 10 kg and have a capacity of less than 5KW. These can be widely used in cell phones, chargers, and batteries.

Key Players

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

Impact of Covid -19 on the market

The sudden outbreak of the pandemic has led to the shutdown of several industries, disrupting the raw material processing and import across the globe. During that period, the product demand gradually decreased due to restricted movement and hindered industrial development, which led to a decline in market growth at the initial level. However, the market is expected to progress by the initiatives of the government and key market players towards market growth.

The implemented restriction in trade heavily impacted the market growth. China is expected to be among the top exporters of DEG-based raw materials that were disrupted during the pandemic. The Government reduced subsidies, and many corporations withdrew from their investment plans, which halted the market growth. However, the market is in a state of recovery due to the increase in clean energy demands, eased restrictions, and rise in consumer base, which led to the slow and steady market growth after the pandemic. It slowed down product execution worldwide. The wind and solar industry declined due to the lack of manufacturing of hardware devices.

Recent developments

• In July 2021, Rolls Royce announced the merger of MTU onsite energy corporation with MTU Inc. to generate power through distributed supply systems under the brand name “MTU onsite energy”.
• In January 2021, Schneider Energy revealed the energy center for distributed energy-enabled homes; due to such initiatives, home energy management, solar batteries, electric vehicle charges, etc., have become mainstream.
• In June 2022, the infrastructure department of the Philippine billionaire Enrique Razon collaborated with multiple small firms to build the world’s largest solar power plant that fulfills the high demand for renewable energy.
• In October 2022, the National Renewable Energy Laboratory introduced the ‘Distributed Generation Market Demand’ model and was later convinced that the latest version of the model could be accessible on the GitHub site.
• In June 2022, Cairn Oil and Gas took steps to convert its Mangala pipeline to solar power. By 2025, the company targets to install rooftop solar PV panels across maximum regions.
• In April 2022, Brazil’s largest fixed-line carrier, Oi SA, introduced the renewable energy-based project, which is expected to cut its operating cost by 400 million reais. The project is expected to involve 25 hydroelectric, solar mills, and biomass, holding a capacity of 123 megawatts.

Segments covered in the report

By Technology

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

By End Use Industries

• Residential
• Commercial
• Industrial

On the basis of Geography

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Italy
• Spain
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America