Analyst Insight: Distributed Generation in Asia Pacific

Despite the supply chain challenges and disruption caused by the ongoing pandemic, global deployment of distributed generation (DG) is expected to grow to 128 GW in 2021. This growth is supported by a strong year for distributed solar, which is expected to see 63 GW of added capacity this year. The short-term outlook for DG growth remains positive despite solar PV module price increases and rising freight costs globally.

The Asia Pacific region is expected to be the largest regional market for DG over the next 10 years, with varying market maturity across the region. In Asia Pacific, Australia offers the best regulatory environment for the distributed energy resources (DER) self-consumption business model while Japan has strong policies supporting DER deployments but lacks the integration needed to support this business model. China has introduced DER-friendly policies in recent years and is expected to be the largest market for DG globally.

This Guidehouse Insights report focuses on seven key DG technologies, including solar PV, distributed wind, microturbines, stationary fuel cells, diesel generator sets (gensets), natural gas gensets, and other renewables. Despite their distinct characteristics, all of these technologies usually operate behind the meter at customer facilities. In some cases, the technologies are owned and operated by actors outside of traditional utilities, such as the technology owner or third-party service providers and aggregators.