July 22, 2024
Distributed Generation Market

Distributed Generation Market: Growing Demand for Energy Efficiency and Resilience

The global Distributed Generation Market is estimated to be valued at US$ 83.9 Billion in 2021 and is expected to exhibit a CAGR of 10.43% over the forecast period 2022-2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Distributed generation refers to the generation of electricity from small-scale energy sources that are located near the end-users. It encompasses a wide range of technologies such as solar PV systems, wind turbines, microturbines, fuel cells, and reciprocating engines. These decentralized power generation systems offer several advantages, including improved energy efficiency, reduced transmission losses, increased grid resilience, and cost savings. The need for distributed generation products is driven by the growing demand for reliable and sustainable power supply, especially in remote and off-grid areas. Moreover, the transition towards renewable energy sources and the need to reduce greenhouse gas emissions are also contributing to the market growth.

Market key trends:
One key trend in the distributed generation market is the increasing adoption of solar PV systems. Solar photovoltaic (PV) systems are gaining popularity due to their ability to harness abundant sunlight and convert it into electricity. This trend is driven by various factors, including declining costs of solar PV modules, government incentives and policies promoting the use of renewable energy, and growing environmental concerns. Solar PV systems are being widely deployed in residential, commercial, and industrial sectors for onsite power generation, leading to reduced reliance on the traditional centralized power grid. The increasing integration of energy storage technologies with solar PV systems further enhances their reliability and flexibility, making them a preferred choice for distributed generation.
Porter’s Analysis

Threat of New Entrants:
The distributed generation market is expected to witness a moderate threat of new entrants over the forecast period. The high initial capital investment required for setting up distributed generation systems acts as a barrier for new entrants. Additionally, the complex regulatory environment and the need for extensive technical expertise further limit the entry of new players into the market.

Bargaining Power of Buyers:
Buyers in the distributed generation market have a moderate bargaining power. The increasing adoption of distributed generation systems has led to a wider range of choices for buyers, allowing them to negotiate for better deals and prices. However, the high switching costs associated with changing distributed generation systems limit the bargaining power of buyers to some extent.

Bargaining Power of Suppliers:
Suppliers in the distributed generation market hold a relatively high bargaining power. The limited number of suppliers and the high concentration of key players in the market give suppliers leverage in negotiating prices and terms. Additionally, the specialized components and equipment required for distributed generation systems may further increase the bargaining power of suppliers.

Threat of New Substitutes:
The threat of new substitutes in the distributed generation market is relatively low. Distributed generation systems provide a reliable and sustainable source of power, which makes them a preferred choice over traditional centralized power generation methods. The high cost and limited availability of alternative energy sources also reduce the likelihood of easily substituting distributed generation systems.

Competitive Rivalry:
The distributed generation market is characterized by intense competitive rivalry among key players. Siemens AG, General Electric, Schneider Electric SE, and other major players compete to gain a larger market share. Continuous advancements in technology, product innovation, and strategic partnerships are some of the key strategies adopted by companies to stay ahead in the competitive landscape.

Key Takeaways

The global Distributed Generation Market Share is expected to witness high growth, exhibiting a CAGR of 10.43% over the forecast period of 2022-2030. The increasing demand for clean energy solutions and the growing focus on reducing carbon emissions are driving the adoption of distributed generation systems.

In terms of regional analysis, North America is expected to be the fastest-growing and dominating region in the distributed generation market. The region’s favorable regulatory framework, government incentives, and increasing investments in renewable energy projects contribute to its growth.

Key players operating in the distributed generation market include Siemens AG, General Electric, Schneider Electric SE, Mitsubishi Motors Corporation, and Capstone, among others. These companies are actively engaged in research and development activities, partnerships, and acquisitions to strengthen their market position and expand their product portfolios.

In conclusion, the distributed generation market is poised for significant growth in the coming years, driven by factors such as the increasing demand for clean energy and favorable government regulations. Key players in the market are focusing on innovation and strategic collaborations to capitalize on the emerging opportunities and gain a competitive edge.