Distributed generation refers to power generation at the point of consumption. It is an approach that employs small-scale power generation technology for electricity generation and is directly connected to a local distribution or private network. Generating technologies that make up a significant proportion of distributed generation include solar PV, wind, reciprocating engines, micro turbines, gas turbines, and fuel cells.

The distributed generation market is projected to reach a market size of USD 60.04 Billion in 2017 and is expected to grow at a CAGR of 11.48% from 2017 to 2022. The growing demand for electric power accompanied with regulatory incentives for clean energy generation have shifted the focus toward distributed generation technologies.

The report segments the distributed generation market, on the basis of application, into on-grid and off-grid systems. The on-grid segment led the distributed generation market in 2016. Grid-connected installations are largely used as a long-term investment to provide energy for local loads and for the exchange of power with utility grids. These are used for power generation by various end-users including industries and manufacturing applications.

The global distributed generation market, by technology, is segmented into solar PV, wind, microturbines, reciprocating engines, fuel cells, and gas turbines, of which, solar PV is the fastest growing segment. The decreasing costs of solar installations, attractive incentives, and greenhouse gas emission restrictions are expected to drive the adoption of solar PV technology for power generation during the forecast period.

The report further segments the distributed generation market, by end-user into industrial, commercial, and residential segments. The commercial segment of distributed generation is expected to grow at the highest CAGR during the forecast period. Government initiatives toward green solutions, the growing demand for reliable power, and easy availability of fuel are expected to drive the growth of the global distributed generation market during the forecast period.

In this report, the distributed generation market has been analyzed with respect to six regions, namely, North America, Europe, Asia Pacific, South America, the Middle East, and Africa. Europe is expected to dominate the distributed generation market during the forecast period, owing to the continued increase in energy consumption mainly from by the industrial and commercial sectors, which contributed to the largest demand for distributed generation. The demands from the IT and telecommunication sectors are also driving the distributed generation market. The figure given below shows the market size of the year 2022 in various regions, with the respective CAGRs.

The major factor restraining the growth of the distributed generation market is the reluctance to spend on distributed generation technologies as it takes a lot of investments, effort, and time to alter and switch to decentralized business models which were earlier functioning in a traditional centralized way.

Some of the leading players in the distributed generation market include Siemens (Germany), GE (US), Schneider (France), Mitsubishi (Japan), and Capstone (US). These players have adopted growth strategies such as new product launches, contracts & agreements, mergers & acquisitions, and expansions to capture a larger share in the distributed generation market.