Global Distributed Energy Generation Market 2025 – 2034

Reports Description

As per the current market research conducted by the CMI Team, the Global Distributed Energy Generation Market is expected to record a CAGR of 13.5% from 2025 to 2034. In 2025, the market size is projected to reach a valuation of USD 311 Billion. By 2034, the valuation is anticipated to reach USD 1082 Billion.

Distributed Energy Generation Market Overview

Distributed energy generation is the process by which small-scale energy systems near customers produce power. These items are known as distributed energy resources (DERs), and they often include energy storage devices, fuel cells, solar panels, and small wind turbines.

In traditional, centralized power facilities, electricity must travel long distances via complex transmission lines. Long-distance energy transport is negligible or nonexistent in distributed generation systems due to their decentralized nature.

DG systems may power both residential and commercial buildings. They can also be connected to a microgrid, which is a small-scale grid that provides electricity to a specific area, such as a hospital, university, or military installation. Distributed generation helps to improve energy efficiency, reduce the environmental impact of power generation, and strengthen system resilience.

The distributed energy generation market is driven by several factors, such as increasing demand for renewable energy, growing focus on grid modernization and decentralization, reducing cost of clean energy technologies, rising adoption of residential and commercial rooftop solar, and many others. However, the high capital investment might be hindering the industry’s expansion.

• According to the India Brand and Equity Foundation, the installed solar energy capacity has increased by 26 times in the last 9 years and stands at 73.32 GW as of December 2023. In 2023, India has added 7.5 GW of solar power capacity. During January 2024, the capacity addition from solar energy stood at 9008.47 MW.

• As per secondary sources, the Indian government has set an ambitious target of achieving 500 GW of renewable energy capacity by 2030, with solar power playing a significant role. Achieving this milestone will place India among the top nations globally in renewable energy capacity.

Distributed Energy Generation Market Growth Factors

Rising shift towards EVs drives market growth

EV charging stations are increasingly relying on distributed energy generation, which includes renewable energy sources such as wind, solar, reciprocating engines, turbines, biomass, and hydroelectric power. Sources like solar panel installations and wind turbines combined with battery storage offer clean energy for commercial and residential hubs.

The rising demand for electricity from EV charging may put a strain on the grid during peak hours. Smart charging and demand management systems are used to increase the output of renewable energy resources to reduce peak demand and assure optimal charging schedules when they are integrated.

Green transformers, fuel cell technology, microgrids, and hybrid energy systems are additional distributed energy generation components that serve to address environmental concerns and improve grid efficiency. Urbanization, growing environmental awareness, and lowering solar, wind, and battery storage prices are all encouraging the adoption of distributed energy generation for EV charging infrastructure.

Increasing collaboration among the key market players are expected to flourish the industry expansion

The growing collaboration among the key market players is expected to flourish in the distributed energy generation market over the analysis period. For instance, in December 2024, to support grid flexibility and customer choice, Itron, Inc., which is developing new methods for cities and energy providers to manage water and energy, announced a partnership with Xcel Energy to manage Colorado’s expanding number of distributed energy resources (DERs), including residential battery energy storage.

In order to help manage DERs, Xcel Energy and Itron have a contract in place for the deployment of an Aggregator Distributed Energy Resource Management System (DERMS) from Itron’s Grid Edge Intelligence portfolio.

Distributed Energy Generation Market Challenge

High initial capital investment

The high initial cost for constructing Distributed Energy Generation (DEG) systems is one of the main obstacles preventing DEG systems from being widely adopted. Equipment, installation, grid connectivity, energy storage, and infrastructure for operation and maintenance are all included in the original cost.

Slows uptake among small-to-medium businesses (SMEs) and household users who do not have access to funding or resources. One of the biggest obstacles in emerging nations is access to credit lines or finance. Despite long-term cost advantages, extended payback times (often 5–10 years or longer) may deter investment.

Distributed Energy Generation Market Segmentation Analysis

By Technology:

The fuel cell segment is expected to dominate the market. Compared to other traditional technologies, fuel cells offer a number of advantages. Higher efficiency, up to 60% efficiency, fewer emissions, and the conversion of chemical energy into electrical energy are all features of fuel cells.

Besides, the solar photovoltaic segment is growing at a rapid rate. The rising installation of solar PV across the globe particularly in developing nation such as China and India. As per the data published by the International Energy Agency, China has invested over USD 50 billion in new PV supply capacity—ten times more than Europe. Thus, the aforementioned stats drive the segment expansion.

By Application:

The commercial & industrial segment is expected to dominate the market. due to convenient access to utility regions and inexpensive product installation costs. Furthermore, as renewable technologies are more efficient, energy secure, emission-free, and resilient than traditional means of generating electricity, governments worldwide are pushing legislation to expand their use in various applications.

On the other hand, the residential segment is expected to grow at the fastest rate over the forecast period owing to the rising emphasis on renewable sources of energy.

Report Scope

Distributed Energy Generation Market Regional Analysis

The Asia Pacific is projected to dominate the distributed energy generation market. The primary driver of market expansion is probably the growing need for energy brought on by population growth and the fast urbanization of nations like China, India, Indonesia, and Malaysia. China’s urban centers play a major role in meeting the country’s product demand. The Chinese market is also anticipated to be driven by the nation’s rising levels of disposable income.

However, North America is projected to capture the significant market share in 2024. This is due to the rising solar PV installation. Moreover, the increasing shift towards sustainable sources of energy drives the regional expansion.

Distributed Energy Generation Market Recent Development

The Distributed Energy Generation industry adopted several strategies, which include product launches, acquisitions, collaboration, expansion, and others. Some of the company strategies include:

• In June 2024, Sumitomo Corporation, through Sumitomo Corporation of Americas, announced a tax equity investment in a diverse portfolio of solar photovoltaic (PV) plus battery energy storage projects, led by Pacifico Power. Sumitomo Corporation Group is expanding its Green Power Platform business, as evidenced by this investment, which will be Sumitomo Corporation Group’s first in distributed generation.

• In October 2024, Schneider Electric, the leader in the digital transformation of energy management and automation, will announce its latest innovations at Enlit 2024. Against a backdrop of increasing pressure on the energy sector, the company is delivering end-to-end smart solutions across the energy chain, with the goal of enabling businesses to thrive.

The increasing collaboration and product launch are the strategies that have expanded the market presence of the company in the Distributed Energy Generation industry and gained its competitive edge.

List of the prominent players in the Distributed Energy Generation Market:

• Vestas Wind Systems A/S
• Capstone Turbine Corp
• Caterpillar
• Ballard Power Systems Inc.
• Doosan Heavy Industries & Construction
• Rolls-Royce plc
• Suzlon Energy Ltd
• General Electric
• Siemens
• Schneider Electric
• ENERCON GmbH
• Sharp Corp
• First Solar
• Mitsubishi Electric Corp
• Toyota Turbine and Systems Inc
• Others

The Distributed Energy Generation Market is segmented as follows:

By Technology

• Wind Turbine
• Solar Photovoltaic
• Reciprocating Engines
• Fuel Cells
• Gas & Steam Turbine

By Application

• Residential
• Commercial & Industrial

Regional Coverage:

North America

• U.S.
• Canada
• Mexico
• Rest of North America

Europe

• Germany
• France
• U.K.
• Russia
• Italy
• Spain
• Netherlands
• Rest of Europe

Asia Pacific

• China
• Japan
• India
• New Zealand
• Australia
• South Korea
• Taiwan
• Rest of Asia Pacific

The Middle East & Africa

• Saudi Arabia
• UAE
• Egypt
• Kuwait
• South Africa
• Rest of the Middle East & Africa

Latin America

• Brazil
• Argentina
• Rest of Latin America