Distributed energy resources (DER) in commercial buildings, including EV chargers, solar photovoltaic, and battery storage, are rapidly expanding due to the steep decline in the cost of distributed energy technologies and associated management software, according to Guidehouse Insights.
The report, ‘Market Data: DER in Commercial Buildings’, reveals that the cost of distributed energy assets has been declining with their effects on the grid and utility budgets being net positive and improving consistently.
Self-consumption as an end-user remains a highly important business model for distributed energy resources and is rapidly growing as an alternative to selling self-generated power to the grid. Self-consumption captures the most value possible from distributed generation. EV charging, solar PV, and energy storage add ancillary benefits such as load shifting are significantly improving the investment returns of distributed energy resources.
Global spending on distributed energy resources in commercial buildings is expected to touch $17.6 billion in 2021, growing at a compound annual growth rate (CAGR) of 9.1% and reach $38.6 billion in 2030.
Asia Pacific, North America, and Europe are expected to account for most of the revenue growth. The Asia Pacific will likely account for the most spending due to its far larger building stock. The integration of distributed energy resources in commercial buildings in North America is anticipated to see revenue jumping from $3.3 billion in 2021 to $7.8 billion in 2030 at a CAGR of 10.1%.
Latin America, the Middle East, and Africa are also expected to have significant revenue increases; however, the regions have a small starting base, and steep price declines in distributed energy resources systems are expected to restrain overall spending compared with other regions. Latin American spending is anticipated to grow at a CAGR of 6.7% to reach $931 million in 2030. Spending in the Middle East and Africa is forecast to grow at a CAGR of 27.3% to reach $287.3 million in 2030.
In December 2020, Mercom had reported that the past few years had seen rapid growth in distributed energy resources which had brought to fore challenges in power system management.
Installation of solar PV systems at homes, commercial buildings, and industrial facilities are set to rise in the next five years, according to an International Energy Agency report. The report focuses primarily on distributed solar PV, and according to the findings, the world’s total renewable-based power capacity is set to grow by 50% between 2019-2024. The expected increase of 1,200 GW, which is equivalent to the total power capacity of the U.S., will result from cost reductions and concerted government efforts.
Arjun Joshi is a staff reporter at Mercom India. Before joining Mercom, he worked as a technical writer for enterprise resource software companies based in India and abroad. He holds a bachelor’s degree in Journalism, Psychology, and Optional English from Garden City University, Bangalore. More articles from Arjun Joshi.