PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1901465
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1901465
Distributed energy generation market size was valued at US$ 475,789.87 Million in 2024, expanding at a CAGR of 5.9% from 2025 to 2032.
Distributed energy generation (DEG) refers to small-to-mid-scale power systems located near the load they serve - rooftop and ground-mounted solar, micro-wind, small gas turbines, fuel cells, and combined heat-and-power units, often paired with batteries and control systems. DEG prioritises resilience, grid deferral, and local energy markets rather than centralized utility supply. Declining solar and battery costs are driving rapid adoption of behind-the-meter systems and microgrids. Opportunities include solar+storage packages for C&I customers, virtual power-plant aggregation, community microgrids, fleet electrification charging hubs with DERs, and energy-as-a-service business models.
Distributed Energy Generation Market- Market Dynamics
Accelerating global decentralized power demand driven by rising electricity needs, grid constraints, and rapid growth in rooftop solar to propel market expansion
Surging global electricity consumption, growing grid instability, and the need for cleaner on-site generation are major forces driving the Distributed Energy Generation (DEG) market. According to the International Energy Agency (IEA 2024), global electricity demand is expected to increase by 3% annually through 2026, intensifying the need for localized generation capacity. Distributed solar continues to lead capacity additions, IEA data shows over 120 GW of distributed PV added globally in 2023, accounting for nearly 40% of total solar installations. Rising grid congestion is also accelerating adoption: the IEA reports that renewable project interconnection queues exceeded 1,500 GW across major markets in 2023, pushing industries and households toward on-site generation and microgrids.
Additionally, strong policy support is boosting market growth. IRENA notes that over 70 countries now offer financial incentives for distributed renewables, while the World Bank's ESMAP highlights that off-grid and mini-grid solutions have already provided electricity access to 490 million people worldwide. Emerging economies, particularly China, India, Southeast Asia, and Sub-Saharan Africa, are reporting double-digit annual growth in rooftop solar, industrial CHP, and community microgrids due to electrification needs and falling technology costs. This rapid expansion is accelerating adoption of solar PV, hybrid systems, fuel cells, and battery-integrated microgrids, strengthening demand across all distributed energy technologies.
The Global Distributed Energy Generation Market is segmented on the basis of System Size, Controllability, Connection Status, Technology, Application, and Region.
The market is divided into three major categories based on system size: Large-scale systems (over 10 MW), Medium-scale systems (1-10 MW), and Small-scale systems (less than 1 MW). Small-scale systems dominate global deployment, primarily driven by residential and commercial rooftop solar, which accounted for over 52% of all distributed PV additions globally in 2023, according to the IEA. Residential PV and C&I rooftop installations continue to expand due to falling module prices, net-metering programs, and government incentives. However, medium-scale and large-scale distributed systems, especially industrial CHP, community solar, and commercial microgrids, are witnessing accelerated growth as industries pursue decarbonization and power-reliability upgrades.
The market is divided into Commercial & Industrial, Residential, Community Microgrids, Utility-scale Projects, and Off-grid Systems. The Commercial & Industrial (C&I) segment is the most significant, driven by the need to reduce electricity costs, improve power reliability, and meet sustainability targets. According to the U.S. DOE, C&I facilities account for over 65% of total CHP capacity in the U.S., highlighting strong industry adoption. Residential rooftop PV continues to grow rapidly due to net-metering, feed-in tariffs, and declining solar pricing. Community microgrids are expanding across Asia-Pacific and North America, while off-grid systems remain essential in Africa and Southeast Asia for rural electrification.
Distributed Energy Generation Market- Geographical Insights
Global distributed energy adoption is shaped by renewable integration targets, grid-modernization initiatives, and expanding decentralized electrification programs. Asia-Pacific holds the largest share, driven by massive solar PV deployment, industrial energy diversification, and aggressive national renewable policies. According to IRENA (2024), Asia accounts for over 60% of global distributed solar additions, led by China's rooftop PV boom exceeding 216 GW cumulative capacity. Besides, Asia-Pacific is also the fastest-growing region, supported by rising commercial installations, community microgrids, and rural electrification programs across India, Southeast Asia, and Australia.
Meanwhile, North America benefits from strong net-metering frameworks, rapid residential solar-plus-storage adoption, and large-scale microgrid expansion-especially in the U.S., which hosts over 700 operational microgrids, the highest globally. Europe maintains steady growth driven by the EU's decarbonization targets, prosumer-oriented energy policies, and widespread installation of distributed heat and power systems. Latin America and the Middle East & Africa are expanding through off-grid solar, distributed storage for energy access, and growing investment in hybrid mini-grids for underserved regions.
Chine Distributed Energy Generation Market- Country Insights
China represents the largest and most influential market for distributed energy generation globally, driven by massive rooftop solar deployment, rapid industrial electrification, and strong provincial-level policy mandates. According to China's National Energy Administration (NEA), the country added 216 GW of new solar capacity in 2023, with over 55% coming from distributed PV. The government's "Whole-County Rooftop Solar Program" already covers over 2,700 counties, accelerating commercial, industrial, and residential installations. Strong grid modernization efforts, large-scale adoption of energy storage, and manufacturing leadership in PV, inverters, and batteries further reinforce China's dominance.
Rising demand for resilient power supply, accelerating electrification, and rapid decentralization of energy infrastructure are intensifying competition across the distributed generation landscape. Leading players include Siemens Energy, Schneider Electric, Tesla Energy, Enel X, ABB, Generac Power Systems, and Bloom Energy. These companies focus on differentiation through high-efficiency inverters, advanced energy-management software, battery-integrated systems, and modular microgrid technologies. Common strategies include expanding distributed portfolios across solar, storage, and hybrid systems; enhancing interoperability with grid platforms; and strengthening long-term service, monitoring, and energy-as-a-service models. Partnerships with utilities, grid operators, and DER aggregators accelerate innovation, while targeted acquisitions, digital-platform investments, and localized manufacturing improve market access, regulatory alignment, and competitive positioning.
In October 2025, VoltaGrid partnered with Halliburton to deploy modular distributed power systems for data centers worldwide, initially launching in the Middle East. The collaboration will use VoltaGrid's QPac platform, turbines, and reciprocating engines, while Halliburton brings global operations, logistics, and regulatory expertise.
In August 2025, Revayu Energy deployed India's first tribrid renewable system, combining wind turbines, solar PV, and battery storage to provide continuous, reliable electricity-even when wind or sun is low. The installation improves grid stability, optimizes resource utilization, and supports India's low-carbon energy transition.
In April 2025, EnergyHub and GM Energy partnered to integrate GM EVs and home batteries into utility programs across the U.S., enabling managed charging and grid-stability services through DERMS. Eligible Chevrolet, GMC, and Cadillac EV owners can enroll to optimize charging for grid load and earn incentives.