Distributed Energy Resources, Distributed Generation - June 18, 2020
Distributed energy resources expected to increase 75% by 2030
Distributed energy resources (DER) are expected to see an annual investment increase by 75% by 2030 and are expected to account for 10% of the world’s global installed power generation, a new report found.
Frost & Sullivan released “Growth Opportunities in Distributed Energy, Forecast to 2030” on June 16, detailing that favorable regulations, declining project and technology costs and high electricity and demand charges are key factors driving investment in DER globally. The analysis predicts that $846 billion will be invested in DER throughout the next decade, with an additional $285 billion invested in battery storage.
"The DER business model will play an increasingly pivotal role in the global power mix as part of a wider effort to decarbonize the sector," Maria Benintende, Senior Energy Analyst at Frost & Sullivan, said in a statement. "Additionally, solar photovoltaic (PV) will dominate throughout the decade. Residential solar PV will account for 49.3% of total investment ($419 billion) with commercial and industrial solar PV accounting for a further 38.9% ($330 billion)."
In particular, this report identifies four key market participants that could benefit significant revenue growth from DER. These markets include:
- Technology original equipment manufacturers (OEMs): Offer flexible after-sales support, including digital solutions such as asset integrity and optimization services for their installed base.
- System integrators and installers: Target household customers and provide efficient and trustworthy solutions with flexible financial models.
- Energy service companies (ESCOs): ESCOs should focus on adding DER deployments to expand and enhance their traditional role of providing energy savings and demand-side management services to customers.
- Utility companies: Deployment of DER can create new revenue streams for utility companies, from real-time and flexibility markets. Further, DER provides an opportunity to aggregate service offerings and expand the customer base.