Global distributed generation market worth USD 483.1 billion by 2024, distributed energy market growth, Solar PV - distributed generation market share
The global distributed generation market is expected to witness a CAGR of 15.5% and is projected to reach USD 483.1 billion by 2024. Factors such as high cost of utility tariffs, interruption of power supply, and losses incurred during transmission of electricity over long distances have shifted the interest towards distributed generation. Furthermore, financial incentives given by governments for construction of renewable distributed generation facilities is likely to give impetus to the market in the coming years.
Electricity supplied from utility-scale power plants is unreliable, and also results in transmission losses over a long distribution network. Moreover, during peak load demand from residential areas, the power requirements of energy intensive industries are compromised, which is detrimental to the production and efficiency of the power plant. Distributed generation power plant is constructed in close proximity of its consumers to minimize transmission losses; it also provides a reliable source of electricity.
Distributed generation companies often opt for power purchase agreements (PPA), which are financial agreements entailing supply of electricity to the main-grid or commercial power purchasers for a fixed period of time. This is useful in developing countries where the existing grid infrastructure is insufficient to meet the demand. Key players of this market are also involved in providing infrastructure equipment and setting up power plants for manufacturing plants, offices, and residential areas. These factors will likely boost the market growth over the forecast period.