The hybrid power system market represents a technology-driven set-up characterized by the high initial investment and low switching costs. The favorable government incentives and abundant availability of component manufacturers have proven crucial in the market’s expansion over the years. With developing economies exhibiting increasing uptake of hybrid power systems, the future of the market seems promising. Factors such as unavailability and the sheer unreliability of grid connectivity across rural and remote areas, have spurred the installation of these power systems in the last couple of years.
Driven by aforementioned factors, the global hybrid power systems market is projected to exhibit a CAGR of 6.1% between 2016 and 2024. The market is expected to reach US$703.55 mn by the end of 2024, from its valuation of US$411.70 in 2015.
Asia Pacific to Maintain its Dominance as Developing Economies Aim for Electrification of Remote Areas
Regionally, the global hybrid power systems market is segmented into North America, Asia Pacific, South and Central America, Europe, and the Middle East and Africa. Among these regions, Asia Pacific emerged as the dominant market for hybrid power systems in 2015. The region is forecast to continue leading the market between 2016 and 2024, as key players in Asia Pacific seek ways of curbing transmission costs by building hybrid power systems as standalone mini-grids.
Furthermore, the integration of renewable energy sources with the electricity mix has substantially reduced the cost of transportation to remote areas, which prove quite lucrative for the hybrid power systems market in Asia Pacific. Currently, Japan is leading the APAC hybrid power systems market. The surge in commercial and utility-scale projects is expected to fuel demand for hybrid power systems from Japan in the coming years.
Besides Asia Pacific, the Middle East and Africa is also expected to demonstrate lucrative opportunities for the hybrid power systems market. In 2015 the regional emerged second to the former in terms of market share. The implementation of regulations mandating rural electrification has significantly aided the expansion of the hybrid power systems market in the Middle East and Africa.
Need for High Initial Investment Discouraging Companies from Investing in Hybrid Power Systems Market
Despite witness attractive opportunities worldwide, the high installation cost and initial investment required are deterring companies from spending on hybrid power systems. Building complementing infrastructure for hybrid power plants, particularly solar-wind-diesel systems, is extremely expensive. This is a critical challenge for the companies operating in the market to mitigate in order to accelerate their profit in the near future. Moreover, hybrid power systems have a way longer period of return on investment (ROI) compared to conventional energy sources, which is dampening the growth of the market to an extent.
Upcoming Power Projects to Fuel Demand for Hybrid Power Systems
Based on type, the wind-solar-diesel hybrid power systems accounted for the dominant share of 45% in the market in 2014. The segment is expected to continue leading the market in the forthcoming years. However, the others segment comprising solar thermal, wind-hydro-diesel hybrid, and hybrid-solar biomass, is expected to report a stronger growth between 2016 and 2024.
Browse Full Global Hybrid Power Systems Market Report with TOC:http://www.mrrse.com/hybrid-power-systems-market
Currently, only a fraction of enterprises in the renewable power industry are engaged in the generation of power via hybrid power systems. However, with the upcoming number of power projects around the world, the demand for hybrid power systems is expected to increase considerably in the near future.