Latest research: Global distributed energy has an average annual compound growth rate of 15.9%

New research from Navigant Research shows that basic economics, local electricity prices and government incentives are rapidly driving the growth of distributed energy resources, including microgrids and solar + storage. On-site generation, battery storage and microgrids have become a way to increase the use of renewable energy, enhance grid resilience and reduce energy costs. Other benefits include reducing losses in centralized transmission systems and perhaps reducing future transmission projects while avoiding the cumbersome approval processes associated with large energy projects.

The research firm’s new report also includes energy storage, demand response, electric vehicle charging and energy efficiency in its definition of distributed energy.

Annual installed distributed energy power capacity, global market: 2019-2028

“In many markets, decentralized energy resources are simpler, especially solar-plus-storage,” Roberto Rodriguez Labastida, senior research analyst at Navigant Research, said in an interview. “That growth will continue — largely based on sustainability needs and economics: Now you install a system in a facility that can provide similar services at the same or lower cost than the grid.”

The new Navigant report is called Global DER Overview: Market Drivers and Barriers, Technology Trends, Competitive Landscape and Global Market Forecasts.

The report predicts that distributed energy capacity will reach 158.3GW in 2019 and nearly 345GW by 2028. Of this, about 245GW will come from solar PV installations, while 93GW will come from electric vehicle charging stations.

As the market expands, it has driven the growth of related industry revenues. The research company said that by 2019, this figure will reach $172.5 billion, and by 2028, this figure may reach about $650 billion, with a compound annual growth rate of 15.9%. Distributed power generation will gain $131 billion and $527 billion in 2019 and 2028, respectively, of which about $480 billion will come from distributed photovoltaic installations. The report said that by 2019, the energy efficiency market is expected to generate about $28 billion in revenue and reach $58 billion by 2028.

There are undoubtedly some market barriers. They include limited customer awareness, fragmented value chains and expensive communications infrastructure. The study also points to the need for comprehensive financial models – demonstrating to the market that investments in on-site generation and microgrids are viable.

“Distributed energy assets were heavily subsidized in the beginning. They need less government support now to continue to grow,” said Navigant’s Labastida. “The costs of these technologies continue to come down, especially solar-plus-storage. The market is price sensitive and includes residential, commercial and industrial segments, all of which are set to see significant growth.”

(Original text from: Global Energy New Energy Network Comprehensive)