Distributed Renewables Offer a Strong Business Case for Behind-the-Meter Generation

Declining technology costs combined with innovative long-term and price-based instruments support the ongoing development and grid parity of distributed renewable energy sources. Distributed renewable technologies have the ability to power local communities while decreasing carbon emissions and dependence on fossil fuels, thereby offering some of the world’s remotest environments to support electrification needs for behind-the-meter (BTM) and onsite generation. 

Distributed Renewables to Meet Increasing Electric Energy Demand

The International Energy Agency forecasts that, by 2020, developing countries will need to double their electrical power output compared to the last 25 years to meet rising demand. It is estimated that a large proportion of this will be met by distributed renewable energy installations. Distributed renewables technology includes small-scale generation assets that produce electricity BTM or close to the end of use. In most cases, the economics of distributed renewables make it possible to provide low cost electricity with high reliability and the advantage of being a clean energy resource. Distributed renewable systems are deployed near site or even onsite with limited reliance on the transmission and distribution grids, as opposed to centralized renewable power generators, which are usually located far from the load centers. Large scale renewable generation capacities could create integration challenges for the region/country’s electricity distribution system. Investment in solar PV capacity has played a significant role in overall transition to distributed energy, and includes small-scale distributed solar systems (such as arrays on the rooftop of a home or business), shared community solar gardens, and small industrial solar PV systems. 

According to Guidehouse Insights, it is expected that 56 GW of distributed renewable capacity will be added in 2019, growing to 155.3 GW in 2028 at a 12% compound annual growth rate. Benefits of deploying distributed renewable assets includes greater energy security and resiliency along with emission reductions. Both regional and local governments have therefore encouraged policies to encourage greater deployment of renewable technologies. Innovative and emerging trends in the energy sector will shape the trajectory and uptake of the distributed renewables market.