Investments in Distributed Energy Likely to Rise Up to 75% by 2030

With the market set for a decade of high growth, the rate of annual investment in distributed energy resources (DER) likely to increase up to 75 per cent by 2030, as analyzed by a leading business consulting firm.

The Frost & Sullivan in its recent analysis, ‘Growth Opportunities in Distributed Energy, Forecast to 2030’, finds that favorable regulations, declining project and technology costs, and high electricity and demand charges are key factors driving investments in DER across the globe.

However, the coronavirus pandemic is expected to trim investment levels in the short term, but the market will recover, it added.

According to the estimates of US-based consulting firm, throughout the decade, USD 846 billion will be invested in DER, supported by a further USD 285 billion that will be invested in battery storage.

Commenting on the future prospects of distributed energy, Maria Benintende, Senior Energy Analyst at Frost & Sullivan, said that “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.”

“Additionally, solar photovoltaic (PV) will dominate throughout the decade. Residential solar PV will account for 49.3 per cent of total investment (USD 419 billion) with commercial and industrial solar PV accounting for a further 38.9 per cent (USD 330 billion),” Benintende added.

“In developing economies, DER offers a chance to bridge the electricity supply gap that still exists in a number of country markets. Further, in developed markets, DER is a key part of the transition to a cleaner and more resilient energy system,” she further said.

The report further added that distributed energy resources offer significant revenue growth prospects for all key market participants, including – technology original equipment manufacturers (OEMs) those offer flexible after-sales support, including digital solutions such as asset integrity and optimization services for their installed base.

Secondly, for system integrators and installers those target household customers and provide efficient and trustworthy solutions with flexible financial models.

Moreover, for energy service companies (ESCOs) which should focus on adding DER deployments to expand and enhance their traditional role of providing energy savings and demand-side management services to customers.

Lastly, for utility companies where the deployment of distributed energy resources can create new revenue streams for utility companies, from real-time and flexibility markets.

Recently, Frost & Sullivan in its report also predicted that with the surge in adoption of technologically advance activities in the power sector such as digital transformation, remote monitoring and operational cost optimization, the market for drones in the power and utility sector will continue to expand at a CAGR of 23.6 per cent and will reach USD 515 million by 2030.