Hybrid Power Solutions Market Analysis By System Type, By Power Rating (Up to 10kW, 11kW - 100kW, Above 100kW), By End-use (Residential, Commercial, Telecommunication), And Segment Forecasts, 2018 - 2025

Industry Insights

The global hybrid power solutions market size was valued at USD 604.1 million in 2016. Rising political pressure to reduce CO₂ emissions coupled with low operational and maintenance costs is expected to be a key factor driving the market over the forecast period.

The hybrid power system is a combination of different technologies for generating energy. It incorporates renewable sources of energy in combination with secondary sources such as diesel or fuel cell. Fossil fuel-based energy sources generate carbon emissions, which in turn have an adverse effect on the environment and human health. Increasing temperature, heat waves, higher risk of flooding, and rising coastal erosion rates are few effects of increasing carbon emissions and other greenhouse gases. These factors have led to an increased inclination toward the use of hybrid power.

The U.S. market, by system type, was valued at USD 65.2 million in 2016 and is anticipated to ascend at a forecasted CAGR of 9.3% over the forecast period. The growing requirement for clean energy generation coupled with the presence of major international market players is expected to benefit the overall market growth in the country. 

The penetration of hybrid solutions is increasing due to the exceptional properties and characteristics associated with the reduction of carbon emissions. In addition, these solutions utilize less fuel, while providing maximum output. Furthermore, increasing awareness regarding global warming has prompted the market to shift its focus toward hybrid power solutions system.

System Type Insights

Solar-diesel adds value for the customer as it provides stable power grid and there is a continuous availability of energy. It also enables fuel savings, as diesel gensets can be taken off and PV generator can take the load when there is sufficient sunlight. In addition, it has an ability to balance the electricity demand and availability of energy during night time, when there is no sunlight. Such trends are expected to contribute to the segment growth over the next eight years.

Wind-diesel system generates electricity by using the wind turbine and diesel generator. The system reduces the fuel consumption and operating costs. These generators work efficiently in areas where there are strong winds. When there is moderate to low winds, the energy generation can be offset by the diesel generators thus ensuring intermittent energy supply. 

Solar-wind diesel system is non-polluting in nature and ideal for areas where the wind velocity is around 5-6m/s. Both renewable energies complement each other, i.e., during the day time, solar energy is used for charging batteries, whereas wind is used to produce energy during monsoon. In addition, the system is used to supply electricity for sustainable development in rural areas and has an ability to provide longer machine life and low-operating cost. Therefore, the advantages offered by the system such as reduction of high running cost of the generator are expected to fuel the market growth over the forecast period.

Power Rating Insights

Depending on different power generation situations, the hybrid power solutions possess an ability to generate up to 10kW power solutions to feed the grid. These systems do not require any additional cost and monitoring unit. It also simplifies the operation of the system and is cost-effective in comparison to diesel generators. The system is ideal for use in houses as it can be installed by using household components. These factors are; therefore, responsible for the market growth over the forecast period. 

The 11kW-100kW was the largest segment in 2016, at a forecasted CAGR of 9.4% from 2017 to 2025. These types of solutions are used in hybrid electric vehicles and power devices. The hybrid electric vehicles are made of gasoline engine and electric motor and possess an ability to effectively curb down environmental issues such as air pollution caused due to CO₂ emissions. Such factors have increased the overall demand for hybrid vehicles, which is in turn expected to propel the segment growth.

The above 100kW type product can satisfy the power needs of towns, where the daily consumption is higher than 1000kW/day. These systems comprise several gensets that enable them to handle the load efficiently. These large systems benefit from the economies of scale in the cost of PV array and batteries. In addition to this, in areas with good solar resource, the system can generate one kilowatt per hour from solar PV at a less cost than its diesel counterparts. Such factors are in turn anticipated to benefit the market growth over the forecast period.

End-use Insights

The global market is witnessing a rise in demand owing to the growing population, which in turn is leading to high demand for electricity. The commercial sector was the largest segment in 2016, accounting for a market share of 37.4%.

The load curve for residential application is generally higher during the evening and noon time. In addition, the energy demand in rural areas during the night time is limited, which in turn results in low load compared to the electricity demand in the morning. Diesel gensets alone fail to meet the demand in rural areas due to limitations such as high fuel consumption and less efficiency whereas hybrid power solutions provide an opportunity to supply load over-night which in turn is expected to contribute positively for the demand from residential sector in rural areas. 

The Telecom industry is expanding across the world, especially in remote areas. Countries such as Indonesia are facing network congestion, which in turn is triggering energy consumption and CO2 emissions. In addition, the use of diesel as an environmental-friendly alternative for power generation has become hard to justify. Therefore, hybrid products are less dependent on diesel generators, which in turn results in increased energy efficiency as well as cost management associated with fuel supply and power generators.

Hybrid products are also used as water pumps for irrigation. Factors such as unpredictable weather conditions, scarcity of electricity, and high investments in diesel pumping system pose economic risks to farmers. Governments globally have undertaken several initiatives for the development of agriculture. For instance, the Indo-German Energy Programme supports the solar water pumping efforts in India. The aforementioned factors are expected to trigger market growth over the forecast period.

Regional Insights 

The Middle East and Africa is in the process of adopting hybrid power solutions owing to increasing awareness about the superior product characteristics such as reduced carbon emissions and high efficiency. The first hybrid system, provided by Cummins, Inc. to Zain Group in Kuwait, in telecom application was installed in the Middle East in 2016. This factor is expected to fuel the use of innovative power solutions in the region.

The product market in Asia Pacific is expected to grow at a significant rate owing to increasing awareness associated with detrimental environmental effects of diesel power generators. In addition, the insufficient presence of grid-related infrastructure required for conventional power generation products is expected to be a key driver for the market growth in the region. The growing demand from countries including Japan, China, and India is also contributing to the overall regional demand.

Competitive Insights

The market is characterized by the presence of companies that have integrated operations through various distribution channels thus enabling them to reach customers easily. In addition, the manufacturers of the product are focusing on developing innovative products to gain benefits in terms of cost, easy manufacturing process, and low maintenance. Major companies operating in the market include Siemens AG, SMA Solar Technology AG, Danvest Energy A/S, Alpha Power Solutions, and ZTE Corporation. 

SMA Solar Technology AG provides its customers with a wide array of hybrid power solutions and the company’s products comprise off-grid components and turnkey solutions. It also manufactures PV inverters and offers technologies for power supply structures. The company entered into a partnership with MVV Energie AG for direct marketing of solar power to develop solutions for the operators of PV inverters with an output of more than 100kWp.

Report Scope 

Segments covered in the report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global hybrid power solutions market on the basis of system type, power rating, end use, and region:

• System Type Outlook (Revenue, USD Million; 2014 - 2025)

  • Solar-Diesel

  • Wind-Diesel

  • Solar-Wind-Diesel

  • Others

• Power Rating Outlook (Revenue, USD Million; 2014 - 2025)

  • Up to 10kW

  • 11kW - 100kW

  • Above 100kW

• End-use Outlook (Revenue, USD Million; 2014 - 2025)

  • Residential

  • Commercial

  • Telecommunication

  • Others

• Regional Outlook (Revenue, USD Million; 2014 - 2025)

  • North America

    • The U.S.

  • Europe

    • The U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Central & South America

    • Brazil

  • Middle East & Africa

    • Saudi Arabia