BOULDER, Colo. — Distributed renewable energy installations today represent far less than one percent of total worldwide electricity generating capacity, but according to a new report from Pike Research, a part of Navigant’s Energy Practice, they will expand rapidly over the next half-decade. Annual worldwide installations of renewable distributed generation are forecast to nearly triple between 2012 and 2017, reaching 63.5 gigawatts (GW) a year in 2017. Nearly 232 GW of distributed renewable is expected to be added over that five-year period.

The centralized model of power generation, transmission, and distribution is growing more and more costly to maintain at current levels, let alone expand to meet the rising electricity needs of growing populations, said Pike Research. Despite being smaller in scale, renewable distributed energy generation sources such as distributed solar photovoltaic (PV), small wind power, and stationary fuel cell systems, with less need for transmission and little to no emissions, are positioned to disrupt the traditional model.

“In a growing number of cases around the world, renewable distributed generation technologies are more cost-effective than centralized installations that require transmission to population centers,” said research analyst Dexter Gauntlett. “In many ways, momentum is shifting to distributed, renewable sources that give consumers more control over the electricity they consume and generate. But in order to reach its full potential, the renewable distributed energy sector will require continued innovation in business models, technology development, utility participation, and investment in an uncertain economic climate.”

The large majority of new installations will be solar photovoltaic, said Pike Research. Solar PV manufacturers have been able to drive down costs and scale up production. Worldwide solar PV module production capacity reached an estimated 50 GW by the end of 2011, according to the report, as module costs dropped from roughly $4 per watt in 2006 to $1 per watt in 2011. New solar PV additions will total 210 GW from 2012 to 2017, the report concludes.

Publication date: 9/3/2012