Small Wind Turbine Market

Market Overview

The global small wind turbine market size was valued at USD 6.9 Billion in 2023 and is projected to reach USD 23.2 Billion by 2032, registering a CAGR of 14.5% during the forecast period (2024-2032). The market expansion is driven by increased investment in renewable energy development and the widespread use of small wind turbines in commercial applications and rural households.

Small wind turbines are upwind devices that utilize blades, rotors, and generators to convert wind energy into electrical energy. They provide micro-level electrical generation capabilities and are commonly used in residences, businesses, and farms. The proliferation of worldwide environmental problems has heightened the necessity for alterations in the excessive exploitation of finite resources. In addition, they provide modern electricity services to households previously without access to electricity, thereby reducing electricity expenses in remote areas and islands that rely on oil-fired power generation. Moreover, this enables residents and small businesses to generate their electricity.

The global energy crisis and the diminishing availability of non-renewable resources for electricity generation primarily influence the market. Moreover, the market is expected to be driven by severe government rules to limit the expansion of carbon emissions and financial incentives provided to promote renewable energy sources. In addition, due to recent technological developments and a substantial decrease in manufacturing costs, there is an anticipated rise in the usage of small wind turbines shortly.

Highlights

• Off-grid generates the highest revenue share based on grid connectivity.
• The horizontal axis accounts for the largest market share by axis type.
• 5 kW to 10 kW influenced the market growth by capacity.
• Residential contributes significantly to the market through application.

Market Dynamics

Global Small Wind Turbine Market Drivers:

Growing Prevalence of the Horizontal Axis Wind Power

The primary components of the horizontal axis wind turbine (HAWT), namely the main rotor shaft and electrical generator, are situated at the uppermost part of the tower. The market sector for tiny wind turbines aligned with the horizontal axis is the most dominant. Contrary to the past decade, during which the bulk of small vertical axis wind turbines (VAWT) were produced, this product has been made for over three decades. The concurrent technological and economic benefits propel the small HWAT. The compact horizontal axis wind turbine has several advantages for high-speed winds, including its affordability, ease of maintenance, and independence from specialized personnel.

Additionally, the elevated foundation of the compact Horizontal Axis Wind Turbines (HAWTs) provides an advantage by granting them enhanced exposure to the wind in areas characterized by wind shear. There is a high likelihood of moderate deployment of these units within the expected timeframe. In April 2021, Engie and Eocycle-XANT partnered to provide clients in Belgium with a small wind turbine as part of a decentralized range of green energy options. The EOX M-26 wind turbine, with a power output of 90kW, produces an average of 260 megawatt-hours of renewable electricity per year.

Rising Investments

Wind power is rapidly emerging as a crucial worldwide energy source. The global wind industry achieved a remarkable milestone in 2023 by installing a record-breaking 117 gigawatts (GW) of new capacity, representing a substantial 50% growth compared to the previous year, 2022. An essential catalyst for expanding the small wind power sector is the increasing influx of funds into the renewable energy sector. India, China, and Japan are among the countries currently augmenting their renewable energy investments.

In addition, in September 2022, the State Investment Promotion Board (SIPB) of Andhra Pradesh offered opportunities for investment in various industries to promote the growth of green energy. The SIPB has approved Greenko to spend USD 246 billion on renewable energy (RE) projects, which will have a total capacity of 4,230 MW. This investment is expected to expand the small wind power market revenue. In 2023, developers in China placed an order for around 100 GW, the highest annual order intake ever recorded. This also signifies that China has consistently received orders for at least 90 GW for multiple years. The primary driver of this expansion has been the demand from China's wind bases onshore.

Furthermore, in 2023, Western markets experienced exceptional order intake levels, resulting in a record-breaking addition of 55 GW. This achievement was particularly notable in Europe, with a year-on-year momentum of 19 GW, and in North America, with a year-on-year momentum of 17 GW. Hence, such growing investment drives market growth.

Global Small Wind Turbine Market Restraints:

Increasing Popularity of Solar Energy

The global small wind turbine market may encounter obstacles due to the growing prevalence of solar energy. The solar energy sector has expanded significantly, propelled by declining costs, technological progress, and favorable government regulations. Consequently, several individuals and organizations are choosing solar power systems as a sustainable energy source. Every quarter, the National Renewable Energy Laboratory (NREL) presents the Quarterly Solar Business Update, highlighting the latest technical advances in the solar business. According to analysts, around 350 gigawatts of direct current (GWdc) of photovoltaics (PV) were installed worldwide in 2023. However, new data suggests this number could be closer to 440 GWdc. Global installations are projected to rise to 400 GWdc in 2024 and further expand to 590 GWdc by 2027. The estimated figures for 2023 may increase following the latest news stating that China installed around 260 GWdc of photovoltaic panels that year.

Consequently, solar energy provides numerous benefits in comparison to modest wind turbines. It necessitates minimal upkeep, reduces ecological footprint, and can be effortlessly incorporated into preexisting infrastructure like rooftops. Moreover, solar panels can produce electricity even in densely populated urban locations where space is limited, thus making them a versatile choice for various purposes.

Moreover, the capacity of solar energy systems to scale up makes expanding and tailoring them to accommodate different energy requirements simpler. The versatility of this feature is attractive to both consumers and businesses, which might redirect investment away from tiny wind turbines.

Global Small Wind Turbine Market Opportunity:

Rising Concern of Utilizing Renewable Resources

Renewable resources are progressively becoming a central focus for addressing environmental issues and guaranteeing sustainable energy production. The increasing recognition of climate change and the imperative to decrease greenhouse gas emissions has stimulated interest in renewable energy sources such as wind power. Small wind turbines generate decentralized energy, making them especially attractive for isolated places or off-grid applications where conventional power sources are neither feasible nor accessible.

In addition, including small wind turbines in hybrid renewable energy systems, in conjunction with solar panels or energy storage solutions, increases their attractiveness by offering a more consistent and dependable power source. The ability to deploy small wind turbines in numerous sectors, such as residential, commercial, and agricultural, expands their market potential.

Additionally, the global capacity for renewable energy is projected to increase by 107 gigawatts (GW) in 2023, marking the most considerable absolute growth ever recorded and bringing the total capacity to over 440 GW. This equals a total power capacity that is more than Germany and Spain's combined installed power capacity. The remarkable expansion is propelled by increasing regulatory backing, rising worries about energy security, and enhanced competitiveness compared to fossil fuel alternatives. These variables surpass the impact of increasing interest rates, elevated investment costs, and ongoing supply chain difficulties.

Therefore, due to continuous technological progress and favorable policies, small wind turbines are positioned to substantially impact the shift towards a more environmentally friendly energy future.

Regional Analysis

Asia-Pacific Dominates the Global Market

The global small wind turbine market analysis is conducted across North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

Asia-Pacific is the most significant global small wind turbine market shareholder and is estimated to grow at a CAGR of 14.2% over the forecast period. The region has substantial opportunities for growth in the small wind turbine market, particularly in off-grid and residential-scale applications. As of 2023, China had the highest wind power generation capacity worldwide, with an installed capacity of 441.89 GW. In 2022, the country added 60 MW of tiny wind turbines, bringing the total installed capacity to 704.32 MW. The government initially implemented a Feed-in Tariff (FiT) program for onshore wind energy in 2009. Currently, it provides a FiT scheme for small wind turbines, with rates ranging from USD 13.4-20.1 cents per kilowatt-hour (ct/kWh). However, India ranks fourth in installed capacity for wind power globally. As of 2023, the country's installed wind power capacity was 44.7 GW.

Additionally, regarding solar wind turbines (SWTs), most systems currently built in India are off-grid or stand-alone. Maharashtra has the highest number of Small Wind Turbine (SWT) installations in the country. Despite being known for their strong winds, Tamil Nadu and Gujarat have few installations for small wind turbines (SWT). Due to the ongoing growth in wind generation capacity in China and India, the region is expected to see a rise in small wind turbine installations. Consequently, there is an anticipation of an increase in investments towards developing small wind infrastructure in the following years. Due to the factors above, the Asia-Pacific region will have the highest market share in the small wind turbine industry throughout the forecast period.

North America is anticipated to exhibit a CAGR of 14.8% over the forecast period. Various factors drive the small wind turbine market in North America. The use of small wind turbines is being boosted by the rising need for renewable energy sources and the increasing emphasis on sustainability. The market growth is further accelerated by government incentives, subsidies, and favorable legislation that promotes renewable energy. Technological progress, which results in enhanced efficiency and dependability, has a substantial impact.

Furthermore, the increasing expenses associated with power and the aspiration for self-sufficiency in energy are motivating individuals and businesses to allocate funds towards tiny wind turbines as a practical substitute or addition to conventional energy sources.

Europe holds a significant market share. Various factors primarily drive the European small wind turbine market. Market growth is primarily driven by the increasing awareness and adoption of renewable energy solutions fueled by environmental concerns and government incentives. Technological improvements have resulted in the development of more efficient and economically viable turbines, promoting consumers' use of these turbines.

In addition, advantageous government policies and regulations, such as feed-in tariffs and net metering, offer financial incentives for installing tiny wind turbines. The increasing need for off-grid power solutions, particularly in isolated regions, enhances the market's growth. Finally, forming partnerships and collaborations between companies in the industry fosters product innovation and market expansion, contributing to overall growth.

Segmental Analysis

The global small wind turbine market is segmented based on grid connectivity, axis type, capacity, and application.

Based on grid connectivity, the market is segmented into On-Grid and Off-Grid.

The off-grid segment dominated in 2023. Small wind power plants are often self-sufficient and have a compact design. Off-grid connectivity offers the advantage of enabling consumers to fully sustain their energy requirements independently. Off-grid tiny wind power devices possess a diverse array of possible applications. The system can provide electricity to various structures, such as residential residences, agricultural fields, ranches, logging camps, etc.

The on-grid segment is the fastest growing due to government efforts to improve grid connectivity in the small wind sector. The small wind power industry offers on-grid systems connected to a utility grid, enabling the provision of electricity for domestic appliances and business needs. The segmental growth is expected to be boosted over the projected period by regulators' various financial and economic incentives, such as Production Tax Credits, Investment Tax Credits, and Feed-in Tariffs.

Based on axis type, the market is segmented into horizontal and vertical axes.

The horizontal axis segment dominated in 2023 due to its superior efficiency and cost-effective installation and maintenance expenses. The classic three-bladed architecture is the usual choice for horizontal axis small wind power, accounting for 99% of the market share. However, unconventional solutions and designs with one or two blades are also available. The market growth is positively influenced by the minor blade count of three, allowing for easier management of centrifugal body forces.

The vertical axis segment is the fastest growing. Vertical axis wind turbines are expected to significantly expand in the forecast period due to their inexpensive cost and the numerous environmental benefits they bring.

The market is segmented based on capacity into Up to 2kW, 2kW to 5kW, and 5kW to 10kW.

The 5 kW to 10 kW capacity segment dominated in 2023. A wind power system with a capacity ranging from 5 kW to 10 kW can be connected to the electric grid in two ways: as a freestanding system, often known as off-grid, or by utilizing a power provider. Therefore, wind power systems are viable, especially in isolated areas lacking electricity infrastructure.

The 2kW to 5kW segment is the fastest growing. Small wind turbines, with power capabilities ranging from 2kW to 5kW, are crucial in stimulating the expansion of the worldwide small wind turbine business. These turbines serve various purposes, including providing energy to homes, farms, and businesses. They play a role in spreading energy production, promoting environmental friendliness, and bringing electricity to rural areas worldwide. Their ability to adapt and grow makes them crucial factors driving industry growth.

The market is segmented based on applications into residential, commercial, and utility applications.

The residential segment dominated in 2023, and its applications will be crucial in stimulating the expansion of the global small wind turbine market. As more and more individuals and households are looking for renewable energy options, small wind turbines provide a decentralized and sustainable choice for power generation. Apprehensions regarding energy autonomy and ecological sustainability further propel this movement.

The commercial segment is the fastest growing. Commercial applications of small wind turbines involve businesses or non-residential buildings utilizing wind energy to meet their energy demands. These turbines can be slightly larger than residential ones and are often used by businesses looking to reduce energy costs or enhance their sustainability credentials. Farms and agricultural facilities often have ample space and consistent wind conditions, making them suitable for installing small wind turbines. These turbines can power farm operations, such as irrigation systems or livestock facilities, contributing to energy efficiency and cost savings.

Utility-scale applications of small wind turbines involve larger installations that contribute to the overall energy generation for a community or utility provider. Small wind turbines can be deployed in microgrid systems or remote communities where access to the main power grid is limited or unreliable. These turbines help in providing a sustainable and independent source of electricity, improving energy security and reducing reliance on diesel generators.

Recent Developments

• In July 2024, German renewables developers VSB and NextWind unveiled the plan to repower a wind farm in Saxony-Anhalt to triple its original capacity. The developers are likely to replace 27 old turbines – a mixture of Vestas’ V80 and V52 models and Enercon’s E66 models – with 16 new Vestas V172 units. The previous installations in Zörbig had a capacity of 40.5MW, but repowering will boost the capacity to 115.2MW.
• In July 2024, Ryse Energy, a global leader in decentralized renewable energy systems, acquired leading US micro wind turbine manufacturer Primus Wind Power. The strategic acquisition solidifies Ryse Energy’s position as the most diverse small wind turbine technology player globally, opens doors to new North American opportunities, and fast-tracks American-manufactured Ryse Energy wind turbines. Ryse Energy’s acquisition of Primus Wind Power adds the proven AIR turbines to its diverse and high-performance small turbine portfolio
• In February 2024- The US Department of Energy's National Renewable Energy Laboratory (NREL) sought assistance from the Competitiveness Improvement Project (CIP) to facilitate the commercialization and market growth of small and medium wind turbine technology. The move is focused on commercialization plans and business models that support cost savings and revenue generation for rural small businesses and farmers in support of the U.S. Department of Agriculture and DOE’s new Rural and Agricultural Income & Savings from Renewable Energy (RAISE) Initiative