The distributed energy resource management system (DERMS) market is expected to grow at a CAGR of over 15% during the forecast period. Factors such as increasing need for efficient energy management systems which help in maintaining grid reliability and flexibility of the distributed energy source are expected to drive the distributed energy resource management systems market during the forecast period. Moreover, the increased penetration of renewable energy power sources which are intermittent and fluctuate over time, in turn, is likely to promulgate the growth of the DERMS market. However, the initial cost for setting up DERMS, along with expansion and upgradation of centralized grids in developing countries to reach 100% electrification rates is expected to hinder the growth of the market being studied.
- The solar PV is expected to be the largest segment for power distributed energy resource management system market during the forecast period, supported by the cost of solar panels dropping exponentially and higher solar PV module efficiencies leading to increased adoption of technology in the market.
- The adoption of distributed power generation in the low-electrified areas of the African region is expected to act as an opportunity for the market. The region's household electrification rate averaged 45% in 2018, and there is a wide variation in electricity access across countries, with some countries having rates of less than 10%.
- North America is expected to the largest market during the forecast period, owing to supportive government policies for the distributed power generation technology and increasing share of renewables in the energy mix, in turn driving the demand for DERMS in the region.
Key Market Trends
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 globally. This segment is expected to drive the distributed energy resources management system with an increase in installed capacity supported by decreasing average installed cost (USD/Kilowatt). DERMS limit photovoltaic (PV) output in real-time to prevent reverse flows and high local voltages.
- Moreover, distributed generation is economically viable to build, as it requires significantly less capital compared to an equivalent traditional facility. Tax incentives for both solar stations and distributed solar generation are driving distributed solar PV, globally. As of 2019, the global solar PV installed capacity is 580.15 GW.
- Moreover, in 2019, distributed-scale solar PV capacity additions amounted to approximately 44 GW. China represents the leading solar market not only in Asia-Pacific but also in the world, with distributed plants contributing 47% of the capacity installed in 2019. Hence, with increased adoption of solar as distributed power, the demand for DERMS is expected to be bolstered.
- In India, solar PV spending exceeded that for coal power for the first time in 2018, supported by government policies and actions. Further, in the United States, solar PV and wind investment rose almost 15% in 2018, supported by corporate procurement.
- 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.
North America to Dominate the Market
- North America has been leading the DERMS market in 2019 and is further expected to be the largest market during the forecast period, supported by the United States and Canada which have more than million of distributed generation units, in turn driving the demand for DERMS.
- Despite enough power generation and accessibility of transmission and distribution networks, power outages are caused in some areas of the region, due to damages to the power distribution system caused by natural disasters, such as flooding and storms. Use of the remote power systems, such as DERMS to regulate distributed energy systems is likely to mitigate the issue.
- Distributed solar PV generation is expected to witness significant growth due to relatively low initial cost and a reduction in service costs, leading to a short return of investment. Many states such as California and Texas have introduced several laws for integrating renewables, such as installing rooftop solar PV, which in turn is expected to the growth of the market.
- As of 2019, close to 300 remote Canadian communities rely on power generating infrastructure that limits energy security, environmental health, and economic growth. Compared to a traditional central power generator, the faster process of approving and developing a distributed generation system facilitates a quick-off-the-ground electrical system to supplement and extend the use of aging infrastructure, especially in remote areas.
- Moreover, a large share of North American utility needs better ways to manage and control assets on its distribution system. With a high penetration of distributed energy resources (DER), the utility has to adjust to quick and, in many cases, large shifts in demand and DER output.
- Therefore, based on the above factors, North America is likely to be the largest market during the forecast period for distributed energy resource management system.
The distributed energy resource management system market is fragmented. Some of the key players are ABB Ltd., Engie SA, General Electric Company, AutoGrid Systems Inc., and Siemens AG.
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