In its latest annual report on clean technology trends for 2022, IHS Markit highlights the significance of solar energy. Specifically, the report indicates that distributed generation, defined by IHS Markit as photovoltaic systems below 5MW, is experiencing an anticipated growth rate of 20% in 2022.

Despite many utility-scale projects being delayed or canceled over the past two years, distributed generation has maintained its appeal. This discrepancy not only reflects the push for distributed generation policies in individual markets but also underscores consumers' concerns about high electricity prices and environmental footprints, as stated by IHS Markit.

Approximately 60% of the distributed generation capacity comes from China and Germany, where policies are driving distributed generation to be a core component of renewable energy targets. Another notable market for distributed generation is Brazil, where net metered solar systems installed before 2023 will continue to be exempt from grid fees. Conversely, the fragmented market in the United States may shrink significantly this year as several states are canceling their net metering policies.

IHS Markit also notes that, despite relatively high capital expenditure, distributed generation systems can still compete with retail electricity prices in many markets. This suggests that the price sensitivity of the distributed generation segment is lower than that of utility-scale photovoltaic generation.

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