Growth Opportunities in Distributed Energy, Forecast to 2030

Growth Opportunities in Distributed Energy, Forecast to 2030

  • May 2020 •
  • 113 pages •
  • Report ID: 5894509 •
  • Format: PDF
Investments into distributed energy resources (DER) technologies reached $53.14 billion in 2019. Total capacity commissioned was 51.04 GW, meaning the total global installed capacity for DER increased by 10% in the year to 528.93 GW. Strong growth is expected for the global market across the decade as a whole. About $846.12 billion is forecast to be invested in new DER capacity over the next decade (2020–2030). The investment will be driven by a combination of favourable regulations, declining project and technology costs, high electricity and demand charges, availability of funding, and new financing models that offset initial investment barriers. Solar PV will dominate global investment throughout the decade, accounting for 88.2% of the funding. Of this, residential solar PV will account for 49.3% of the total investments, and commercial and industrial (C&I) solar PV the remaining 38.9%. By the end of the next decade, Asia will account for approximately 48% of the total investment, followed by North America (approximately 17.5% share) and Europe (approximately 16%). Total distributed generation (DG) installed capacity is projected to reach 1182.00 GW by 2030, accounting for 10% of the global installed power generation in the year. The DER model will play an increasingly pivotal role in the global power mix, as part of a wider drive to decarbonise the sector. The analyst firmly believes that participants in the power generation market must consider the impact of DER and should adapt accordingly.Behind-the-meter energy storage is set to become a game changer for DER as it enhances its value proposition and enables revenue stacking. The cost of the energy storage system is forecast to decline by 35% over the course of the decade, making it an increasingly attractive proposition. New solar PV customers will opt for a solar + storage system as standard and existing customers will increasingly look to add a storage system to their existing solar PV DER units.Prosumers will continue to invest in DER projects to mitigate energy cost uncertainty, and avoid increases in demand charges. They will also increasingly benefit from selling electricity back to the grid and from participating in the wholesale electricity, capacity and ancillary service markets. The transition from a pure pay-and-purchase model to operation and output based OPEX contracts that include maintenance, performance guarantees, and availability of the installed equipment will increasingly be preferred by residential and C&I consumers.Security of supply will become a key factor for investing in DERs, as major climate incidents increase. DERs that can operate in microgrid mode will bring increased resiliency to local grids.
Author: Maria Benintende