The consumer in many developed markets has been given the opportunity to make their own energy choices, rather than relying on the traditional utility and government. Gone are the days that the end-user has to wait for public service commissioners to advise how to get power, who they should purchase it from, how the power will be produced and then finally delivered to their home or place of business.
Distributed Generation is attracting a flood of investors as its potential is recognised. Research shows that Distributed Generation saves money, enhances operational efficiency, lowers the risk of power outages, protects against military and cyber attacks, decreases the devastating effects of natural disasters, and helps reduce the environmental footprint.
The opportunities are endless because anyone can tap in to this revolutionary industry. Basically, if you have a roof, open field, livestock, military base, data centre, sewage treatment plant or a factory, you can become an investor in or owner of Distributed Generation.
In comparison to the large power stations and infrastructure we have had to maintain or upgrade over the decades, Distributed Generation investments are mostly small. They also don’t pose much monetary risk and as a result, investors won’t have to struggle with risk-averse banks and investors. They also won’t need permission from financiers. Really, the only barriers that Distributed Generation is coming up seem to be set by regulators and utilities.
New market players driving change
The number of developers and sellers of new Distributed Generation technology have also increased significantly. Very few sellers and buyers are involved in the development of a traditional power plant due to the high expense for the required expertise and capital. Also, not many companies own these large and costly power plants. In comparison, the Distributed Generation is one of innovation and extreme competition.
An increasing number of manufacturers are producing an ever-increasing variety of technologies on assembly lines by the thousands or millions. Millions of customers are buying them and are demanding lower prices. The nature of this industry is creating competition so fierce that the largest solar panel producer, for instance, has a market share of only 9%.
So as this industry continues to gain ground and consumers and investors enjoy its many benefits, the traditional utility will need to review its business models. An industry with limited competition and lack of innovation does not have a place in the power industry’s future. It’s time for change.