In recent years, billions of dollars of public and private investment in distributed generation (DG) technologies have yielded strong results in both cost reduction and technical capabilities.  Public and private investment in DG technologies has grown significantly as new business models, such as third-party owned systems (specifically the solar lease and solar power purchase agreement), have been deployed.  According to a new report from Navigant Research, worldwide revenue from DG is expected to grow from $97 billion in 2014 to more than $182 billion by 2023. 

“One of the most important issues for the energy industry is striking a balance between DG growth and fairly compensating utilities for the ability to effectively use the existing electrical grid as a backup service for onsite power at higher concentrations in the future,” says Dexter Gauntlett, senior research analyst with Navigant Research.  “Utilities that pro-actively engage with their customers to accommodate DG – and even participate in the market themselves – limit their risk and stand to benefit the most.”

To date, DG has been more disruptive in Western Europe than in any other region, according to the report.  Utilities are losing hundreds of billions of dollars in market capitalization as DG reaches higher levels of penetration in leading countries such as Germany, the United Kingdom, and Italy.  The prospect of similar losses by utilities in the United States is prompting a struggle among utilities, the DG industry, and regulators over the future of DG models. 

The report, “Global Distributed Generation Deployment Forecast,” analyzes the global market for DG technologies, including solar PV (<1 MW), small wind turbines (<500 kW), stationary fuel cells, natural gas generator sets (<6 MW), and diesel generator sets (<6 MW).  Installed capacity, revenue, and pricing forecasts are included for the time period of 2014-2023 for 54 countries.  The report also includes region- and country-specific market analyses, qualitative analysis of installed capacity by customer segment and/or power class for leading markets, and an overview of modeling assumptions.  An Executive Summary of the report is available for free download on the Navigant Research website.

About Navigant Research

Navigant Research, the dedicated research arm of Navigant, provides market research and benchmarking services for rapidly changing and often highly regulated industries.  In the energy sector, Navigant Research focuses on in-depth analysis and reporting about global clean technology markets.  The team’s research methodology combines supply-side industry analysis, end-user primary research and demand assessment, and deep examination of technology trends to provide a comprehensive view of the Smart Energy, Smart Utilities, Smart Transportation, and Smart Buildings sectors.