Telecommunications boosting hybrid power in off-grid areas

According to research group Frost & Sullivan, end users in remote areas are retrofitting or replacing diesel generators with more cost-effective and efficient hybrid power systems. The trend is creating opportunities for hybrid power system manufacturers around the globe in view of key potential growth segments such as resorts, remote tourist spots and off-grid residential communities.

Frost & Sullivan’s new Global Hybrid Power Systems Market report finds that the market earned $358.4 million in revenue last year and estimates sales will reach $552.2 million in 2018 at a compound annual growth rate of 9%. Latin America and Africa are expected to see the fastest growth.

"Industrial penetration into off-grid remote areas is boosting power requirements, driving the installation of hybrid power systems," said Frost & Sullivan Energy & Environmental Research Analyst Ashay Abbhi. "Telecom sector penetration is particularly strong and will thus contribute most to global market revenues."

However, lack of clarity on the subsidies and other incentives provided for hybrid power systems is discouraging some end users, according to Frost & Sullivan.

"Proper legislation governing the installation of hybrid power systems too is reducing market potential," the report found. "For instance, solar and wind power subsidies are extended to hybrid power systems but do not have legislative literature with specific technical requirements to support it."

In addition, the relatively higher capital costs of hybrid power systems compared to diesel generator sets, and the increased costs incurred while transporting these solutions to far-flung areas can deter uptake.

Nevertheless, cost may become less of a concern among customers with the gradual reduction in the prices of solar modules and wind turbines, which are the dominant renewable energy sources for hybrid power generation. The cost of installation and equipment required for the use of hybrid power systems is decreasing as well.

"Capital costs will fall further once clear legislations regarding subsidies provided for hybrid power systems are defined by governments," noted Abbhi. "The standardization of modular hybrid power systems will also lower capital costs substantially and power the use of these solutions globally."