During this period, the cleantech market intelligence firm forecasts that annual RDEG capacity additions will increase from 5.9gigawatts (Gw) in 2009 to 15.1Gw in 2015.

The global electric power industry is evolving from a financial and engineering model that relies on large centralized power plants owned by the utilities to one that is more diverse - both in sources of generation and ownership of the generation assets, said the research firm.

RDEG, which includes both distributed solar photovoltaics (PV) and small wind power, is an emerging mode of operations that is a growing alternative to the traditional centralized power generation infrastructure.

Peter Asmus, senior analyst at Pike Research, said: “The economics of sub-utility scale renewable energy continue to improve at a rapid pace. This downward price curve is fueling demand for distributed solar PV and small wind systems as an alternative to centralized power generation.

“But the transition to a more distributed system is no small matter, and it requires the evolution of policies, technologies, and business models.”

Ms Asmus adds that, while RDEG currently represents a very small part of the global electric power generation capacity - just 0.2 percent - it has the potential to play a much larger role in the future. Although Europe and the US are the largest markets for RDEG today, China and India are huge potential markets.

Pike Research anticipates that Europe will continue to be the largest market for RDEG during the 2010-2015 forecast period, but China will see the largest market growth as the cost of renewable energy approaches that of conventional energy.

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