Distributed Generation: Transforming the global energy matrix

Distributed generation (DG) is a decentralized model of electricity production, close to or at the point of consumption, usually from renewable sources such as solar photovoltaic and wind. Unlike centralized generation, based on large power plants and long transmission lines, DG provides greater autonomy, reduces losses, and increases efficiency in the electrical system. This model is at the center of the global energy transition, with significant growth driven by cost reductions in technologies, favorable regulations, and digitalization.

Solar distributed generation (DG) continues to expand globally, driven by favorable public policies, cost reductions, and growing environmental awareness. According to the Renewables 2024 report from the International Energy Agency (IEA), distributed applications, including residential, commercial, industrial, and off-grid systems, are expected to account for approximately 40% of the total expansion of solar photovoltaic energy by 2030. This growth reflects the increasing adoption of the distributed generation model by consumers and companies seeking cost reduction, greater energy reliability, and alignment with ESG goals.

What is Distributed Generation

Distributed generation refers to the production of electricity in small to medium-sized systems installed near or at the point of consumption. This approach is made possible by technologies such as solar panels, wind turbines, biomass, and more recently, hybrid solutions with battery storage. The model allows consumers to become "prosumers," generating and consuming their own energy, with the possibility of injecting surpluses into the grid.

This concept is increasingly associated with sustainable practices, operational cost reduction, and mitigation of risks related to energy volatility. PV Magazine highlights that over 50% of the solar capacity added globally in 2022 came from distributed systems, consolidating its strategic importance.

Distributed Energy Generation

DG is a solution that serves various consumer profiles—residential, commercial, industrial, and rural. Its growth has been primarily driven by solar photovoltaic energy, responsible for over 90% of global DG installations. Moreover, models such as microgrids and energy communities are being implemented to maximize system efficiency and resilience.

Studies by Rethink Energy indicate that after 2030, distributed systems may represent up to 63% of all new solar installations. The proliferation of DG drives not only clean generation but also the development of innovative business models, such as virtual PPAs, system leasing, and community solar programs.

How Distributed Generation Works

In practice, DG systems capture energy from renewable sources and convert it into electricity for immediate use or grid injection. For example, photovoltaic solar panels generate electricity from solar radiation, which can be consumed locally or sent to the grid, generating credits through compensation policies like net metering.

The integration of DG systems with storage and smart energy management technologies, such as artificial intelligence (AI), further enhances their benefits, allowing automated decisions on when to consume, store, or sell energy.

Difference Between Distributed and Centralized Generation

While centralized generation relies on large plants (hydroelectric, thermal, large-scale wind farms) and transmission through extensive lines to consumption centers, DG occurs near consumption, reducing losses and increasing efficiency.

DG provides greater autonomy to the consumer, who can generate their own energy and reduce dependence on utilities. Additionally, it enables the creation of more resilient solutions, such as microgrids capable of operating independently in case of failures in the main grid.

Distributed Generation: Advantages and Disadvantages

Advantages:

• Reduction in energy costs
• Increased energy security and autonomy
• Contribution to ESG goals and emissions reduction
• Stimulus for innovation and new business models
  

Disadvantages:

• High initial investment
• Dependence on weather conditions
• Need for regulation and integration with the grid
  
  

Solar Distributed Generation

Photovoltaic solar energy is the most used source in global DG, driven by falling equipment prices and increasing system efficiency. Models such as community solar and collective self-consumption expand access, allowing even consumers without their own space to benefit from renewable generation.

We can highlight the expansion of community solar models, which recorded installation records in the US in 2024, with more than 1.7 GW added. Integration with storage systems and electric vehicles is a growing trend, further enhancing the benefits of DG.

ANEEL Distributed Generation

Although Delfos operates globally, it is worth mentioning the Brazilian regulatory reference: ANEEL Normative Resolution 482/2012, which established the electricity compensation system. This model inspired similar policies in several countries, such as Chile, India, and the Philippines.

IEA, Distributed solar PV capacity growth by country/region, IEA, Paris https://www.iea.org/data-and-statistics/charts/distributed-solar-pv-capacity-growth-by-country-region,
License: CC BY 4.0

Brazil has become one of the largest DG markets in the world and the largest in Latin America, with over 35 GW of installed capacity by 2025. Brazilian regulation is considered one of the most successful and serves as an international benchmark.

Distributed Generation in Brazil

DG in Brazil is led by photovoltaic solar energy, with emphasis on remote self-consumption, shared generation, and mini-generation modalities, which enable collective projects, of larger scale, and expand access to clean energy. The Brazilian model inspired the adoption of similar policies in Latin America, promoting the regional development of DG.

Delfos offers advanced solutions for the intelligent management of DG assets, using artificial intelligence to optimize performance, reduce losses, and maximize return on investment. With its international presence, Delfos enables companies and operators to manage DG portfolios in a centralized and efficient manner.

Want to know how to enhance the efficiency of your distributed generation with artificial intelligence? Talk to our experts and discover our solutions for monitoring and optimizing renewable assets.

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