220 Gigawatts Globally of Small Solar Installations by 2018

April 30, 2013

Though this market is still primarily driven by government incentives, distributed solar photovoltaic, PV will continue its steady march toward grid parity in major markets over the next few years, reports SEIA.

220 Gigawatts (!) of New Distributed Solar Generation Will be Added by 2018

December 19, 2011- Kyle Travis, left and Jon Jackson, with Lighthouse Solar, install microcrystalline PV modules on top of Kevin Donovan’s town home. | Credit: Dennis Schroeder | NREL

Distributed generation, DG refers to electricity that is produced at or near the point where it is used. Distributed solar energy can be located on rooftops or ground-mounted, and is typically connected to the local utility distribution grid. States, cities and towns are experimenting with policies to encourage distributed generation to offset peak electricity demand and stabilize the local grid.

The global electric power industry is evolving from a financial and engineering model that relies on large centralized power plants owned by utilities to one that is more diverse, in terms of both the sources of generation and the ownership of the generation assets. Distributed solar photovoltaic (PV) systems offer the benefit of producing electricity onsite, thereby reducing the need to build new transmission capacity and avoiding line losses.

According to a new report from Navigant Research, 220 gigawatts of distributed solar PV capacity will be installed between 2013 and 2018, representing $540 billion in revenue during this time.

Used in applications ranging from residential to small commercial to industrial settings, distributed solar generation offers significant benefits to consumers while adding resiliency to an electric grid evolving beyond the traditional centralized model. –Dexter Gauntlett, research analyst with Navigant Research.

Even as distributed solar technologies have become more cost-effective, many governments are reining in popular feed-in tariffs in leading markets. The industry is fully aware that lucrative financial incentives will not be around forever. As a result, many companies are looking at 2017 (the year after solar PV investment tax credits expire in the United States) as the year that solar PV will be able to stand on its own, without government support.

The report, “Distributed Solar Energy Generation”, analyzes the global market for distributed generation PV systems less than 1 megawatt in capacity and provides an assessment of the most important market drivers, technology trends, and challenges faced by the growing distributed solar PV industry. Forecasts for average installed prices and annual installations, segmented by region, extend through 2018.

An Executive Summary of the report is available for free download on the Navigant Research website.