LONDON--(BUSINESS WIRE)--The global distributed energy generation market is expected to grow at a CAGR of close to 9% during the period 2018-2022, according to a new market research study by Technavio.
The report presents a comprehensive research of the global distributed energy generation market by technology, including solar PV, CHP, fuel cells, microturbines, and small wind turbines. The report also determines the geographic breakdown of the market in terms of detailed analysis and impact, which includes key geographies such as APAC, the Americas, and EMEA.
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Market driver: increasing need for energy access and the high cost of grid expansion
According to a study, approximately 1 billion people around the world do not have access to electricity because of the lack of grid infrastructure. Providing grid access to the entire population will require substantial investments from governments to accelerate their electrification programs. Most people who do not have access to electricity live in rural areas, and the cost of main grid extension for rural electrification is high because it depends on population density, the distance of the community from the existing main grid, power quality, demand pattern, and several other factors. It is estimated that grid extension beyond semi-urban areas to provide low-cost per kW of power to sparsely populated areas is expensive.
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Market trend: reduction in technology costs
The declining technology cost and support from governments such as feed-in tariffs and incentives are promoting the reach of technologies such as wind and solar in developing and developed countries. This will propel the growth of the global distributed energy generation market. Over the years, demonstration projects, field trials, and R&D have led to the reduction of the cost of distributed energy generation technologies.
According to a senior analyst at Technavio for energy storage research, “The reduction of the cost of distributed energy generation technologies will promote its adoption. This will encourage the vendors to invest in R&D. Continued research will ultimately aid to bring in continued improvements. Therefore, improvements in technology and declining costs will make distributed energy generation more attractive and feasible, leading to its continued adoption.”
Market challenge: low efficiency of solar PV
The energy storage systems combined with solar PV are the most commonly used sources of distributed energy generation. They are clean and available in abundance. But, they are low on efficiency. Currently used Solar PV panels can convert approximately 15% of the sunlight, which falls on the panel into electrical power. Although the technology is constantly evolving, the conversion rate cannot match the amount of energy generated by the burning of fossil fuels.
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