July 28, 2013 – Driven by feed-in tariffs (FITs) and the commoditization of photovoltaic (PV) modules—along with leasing programs for residential solar installations—Navigant Research expects distributed solar PV systems to see double-digit and, in some countries, triple-digit growth over the next five years.

Navigant says distributed solar power systems offer a number of advantages over large, centralized solar arrays: they reduce the need for new transmission capacity; they are scalable to meet the specific demand of the end user; they help reduce efficiency losses from transmission; and are relatively quick to permit and install.

As such, a recent report from Navigant expects worldwide revenue from distributed solar power generation to reach $112 billion annually by 2018.

“It is a great time for consumers and end users to purchase or lease distributed solar PV systems, as prices continue to fall in the midst of fierce competition and continued consolidation,” said Dexter Gauntlett, research analyst with Navigant. “Paradoxically, the impending slowdown in government-funded initiatives will actually benefit the market, as governments retool their FITs to place greater emphasis on onsite generation, opening the door to new business models and creating opportunities for the entire distributed solar value chain.”

At the same time, solar PV trade disputes are expanding around the world at different points in the value chain, creating uncertainty for many companies, particularly in the United States and Europe, adds Navigant. China, already the leader in manufacturing, is anticipated to install more solar PV systems domestically in 2013 than any other country.

Ultimately, solar PV price reductions are expected to continue, albeit at a more gradual rate compared to the past three years, which have witnessed dramatic price declines as a result to an oversupply of Chinese modules.