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Small Is Big: Small Wind Market 1.89 Billion USD by 2019

Analysis
Typography

Small wind turbines with a capacity rating of less than or equal to 100 kW are designed to produce clean energy, emission-free power farms for homes and small businesses. Small wind turbines include all plants where the swept rotor area is smaller than 200 square meters at 350 W/m2. These small wind turbines find application in off-grid setups such as telecommunication towers and domestic uses. Small wind is expected to become an important source of renewable energy to reduce reliance on fossil fuels.

Growing environmental concerns, coupled with economic advantages, have led governments across the world to support the renewable energy industry, thereby expanding the small wind market. The capital costs involved in setting up a functional wind power project still remain high, but the gradual shift towards reducing reliance on fossil fuel consumption for electricity has aided cost reduction for wind technology.

The segmentation considered for the recent report on small wind market was based on the type, application, and region. The market was segmented on the basis of type into horizontal axis wind turbine and vertical axis wind turbine and on the basis of application, the market was been segmented into on-grid and off-grid. The off-grid segment accounted for the largest share of the global small wind market in 2014.

The small wind market is projected to grow at a CAGR of 19.5% from 2014 to 2019 to reach USD 1.89 Billion by 2019. The demand for small wind power has escalated due to rapid industrialization and development of infrastructure in unconnected areas. The rise in wind energy generation initiatives offers an attractive opportunity to the wind turbine manufacturers. The North American region accounted for the largest market share in the small wind market in 2014; this is owing to the high demand for on-grid applications of small wind power, especially in developed nations such as the U.S. In the European region, the demand for small wind power for off-grid applications, from most of the Western European countries, is expected to grow at a high rate in coming years.

Despite weakening policy drivers and competition from declining solar PV prices, the SMWT industry is still poised for growth. With a large amount of wind resource potential still available, plus several growing and emerging markets, the industry is anticipated to sustain itself into the foreseeable future. According to a new report from Navigant Research, the global installed capacity of SMWTs is expected to grow from 176.4 MW in 2017 to 446.0 MW in 2026.

“With historically leading markets such as the United States, the United Kingdom, and China seeing declining annual installed capacities of small and medium wind in recent years, other countries such as Japan, Denmark, and Italy are emerging as forces in the distributed wind market thanks to favorable government incentives,” says Adam Wilson, research associate with Navigant Research. “We’re also seeing a shift with medium-sized turbines as their niche slowly shrinks as drivers continue to favor small wind turbines for distributed wind and larger multi-megawatt turbines dominating utility-scale applications.”

As the SMWT market continues to mature, wind lease programs are becoming a more popular business model, and the applications for small wind turbines are expanding, according to the report. Key industry players, however, are beginning to set themselves apart as market innovators by seeking out and expanding to different areas around the globe as policies shift and demand changes.

Leading players in the small wind market include Northern Power Systems Inc. (U.S.), Bergey Wind Power Co. (U.S.), Kingspan Group Plc. (Netherlands), Shanghai Ghrepower Green Energy Co. Ltd. (China), Endurance Wind Power Inc. (Canada), ZKEnergy Technology Co., Ltd. (China), and Xzeres Wind Corp. (U.K.). One of the major developments observed in the small wind market is new product development. It is essential for the manufacturers to continually invest in research and development activities and come up with innovative solutions to adhere to the standards set by government for small wind market. Companies are adopting inorganic growth strategies such as acquisitions to cope with the increasing demand of small wind power in key emerging markets. These strategies have aided companies to create a large customer and partner base in key markets.