Market Trends of Distributed Energy Resource Management System Industry
Solar Photovoltaic (PV) Segment to Dominate the Market
- Solar PV can be located on rooftops or ground-mounted and is one of the largest distributed power sources globally. This segment is expected to drive the distributed energy resources management system with increased installed capacity supported by decreasing average installed cost (USD/kilowatt). Distributed energy resource management systems limit real-time photovoltaic (PV) output to prevent reverse flows and high local voltages.
- Distributed generation is economically viable, requiring significantly less capital than an equivalent traditional facility. Tax incentives for both solar stations and distributed solar generation are driving distributed solar PV globally.
- According to the International Renewable Energy Agency, the global solar PV installed capacity accounted for 1,046.61 GW in 2022. With an annual growth rate of 22.4% compared to the previous year and supportive solar PV targets of the government, solar PV capacity is expected to increase in the future, which, in turn, may drive the distributed energy resource management system market.
- Solar photovoltaic (PV) technology is expected to account for renewables’ most considerable annual capacity additions in the coming years, well above wind and hydro as well. According to IEA, solar PV generation increased by 26% in 2022, reaching 1300 TWh, representing the largest absolute generation growth of all renewable technologies. The cost of solar photovoltaics has also reduced dramatically in the past six years as the market was flooded with equipment. The cost of solar panels also dropped exponentially, leading to increased solar PV system installations globally.
- In the residential and commercial & industrial (C&I) sector, solar power is often generated by rooftop solar photovoltaics (PV) deployed by end users. Solar PV systems for power generation are installed on rooftops of houses and commercial buildings or industrial plants that use the energy. Excess energy produced by individual owners is sometimes sold to power companies.
- Several governments around the world have introduced several initiatives and policies to increase the contribution of solar energy to the country’s energy mix. Such policies are expected to have a positive impact on the market studied. For instance, in India, the Ministry of New and Renewable Energy announced the Grid-connected Rooftop Solar Scheme (Phase II) in 2019. The scheme aims to produce solar power by installing solar PV panels on the roofs of houses. The Government of India previously set the goal of installing 40,000 MW of Rooftop Solar (RTS) Power by 2022.
- However, in January 2023, India's Rooftop Solar (RTS) program received a four-year extension and aimed to accomplish its target of 40 GW rooftop solar (RTS) capacity addition by March 2026. This program is expected to achieve India's total solar energy capacity target significantly.
- Therefore, with increased investment in solar PV and changing government regulations, coupled with upcoming projects, the solar PV segment is expected to be the largest market during the forecast period.
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North America to Dominate the Market
- The North American DERMS market is further expected to be the largest market during the forecast period, supported by the United States and Canada, which have more than a million distributed generation units.
- Despite enough power generation and accessibility of transmission and distribution networks, power outages are caused in some areas of the region due to natural disasters, such as flooding and storms. The use of remote power systems, such as DERMS, to regulate distributed energy systems is likely to mitigate the issue.
- The United States has set a road map to achieve renewable energy targets. The federal government and many state governments have implemented policies and programs to promote the adoption of solar energy. These incentives include tax credits, grants, rebates, and renewable portfolio standards that need utilities to receive a certain percentage of their energy from renewable sources like solar.
- Moreover, as the number of solar projects increases, the companies increase demand for distributed energy resources management systems in the country.
- According to the US Energy Information Administration (EIA), the country’s small-scale solar capacity grew from 7.3 GW in 2014, when they began publishing these estimates, to 39.5 GW in 2022. Small-scale solar accounts for approximately one-third of all solar capacity in the United States.
- According to the International Energy Agency (IEA), electric vehicle sales in the country have increased significantly in recent years between 2021 and 2022; the cumulative sales of PHEV and BEV increased by more than 27,000 units, whereas in the past decade, sales increased by almost 60 folds signifying the increasing adoption of electric vehicles in the country.
- Similarly, Canada's publicly available electric vehicle (EV) charging infrastructure is on a steady rise, as indicated by data compiled by Electric Autonomy. As of March 1, 2023, Natural Resources Canada (NRCan) statistics revealed that Canadian EV users can avail themselves of at least 20,478 charging connectors distributed across 8,732 charging station sites nationwide. This represents a substantial percentage growth rate of 30% since the beginning of 2022.
- Therefore, based on these factors, North America is likely to be the largest market for distributed energy resource management systems during the forecast period.
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