Small Wind Turbine Market

Market Overview

The Total Addressable Market (TAM) for Small Wind Turbine was valued at USD 275.63 million in 2022, and it is anticipated to reach USD 301.45 million by 2031, at a CAGR of 1% during the forecast period (2023-2031). 

Small wind turbines are low-cost, low-maintenance, and dependable alternative energy generators which can be installed quickly in very little space and virtually without any additional infrastructure. Although large-scale, cleaner power generation using more giant wind turbines has been taking place rapidly worldwide, there are several associated problems with their sustainable development. Growing energy prices, the associated desire for decentralized electricity generation, and concerns about global climate change have convinced many people to seek alternative energy sources.

Small wind turbines can power communities, businesses, schools, clinics, single households, farms, and various equipment. Small-scale wind turbines have traditionally been used for remote, off-grid applications across households, farms, agriculture, and telecommunications. Moreover, over the past few years, there has been an increasing trend of grid connections from SWTs, in response to continual electricity price increases and increased demand for on-site power generation.

Market Dynamics

Global Small Wind Turbine Market Drivers

Lower Capex Requirements

Due to their smaller size relative to conventional wind turbines, small wind turbines have much lower overall costs, making them affordable for small project developers and consumers with lesser energy demands. As distributed generation customers are primarily situated in off-grid rural communities with limited financial resources, the total project cost is a huge factor in determining the feasibility of small wind turbine projects.

Moreover, smaller wind turbines are suited to the needs of smaller rural consumers in residential, portable, or off-grid applications. Small-wind turbines are mainly used to power rural or suburban homes, farms, schools, and manufacturing facilities. During 2020, small wind systems were installed in wineries, schools, residences, farms, a tribal government, an animal eye care clinic, and a biodiesel production facility in the United States. Hence, small-wind can empower remote rural communities by providing energy security. Due to such measures, small wind power can help in rural communities' sustainable development, which is expected to drive the market significantly. 

Increasing Investments in Renewable Energy

The increasing renewable energy investments are driving the growth of the small wind turbine market. Investments in renewable energy have increased in various countries such as India, China, and Japan. For instance, in September 2022, the State Investment Promotion Board (SIPB) of Andhra Pradesh announced investment opportunities for various companies to increase green energy. Greenko got the SIPB's approval for an investment of USD 246 billion in renewable energy (RE) projects with a total capacity of 4,230 MW. Thus, the rising investments will fuel market growth in the near future.

Global Small Wind Turbine Market Restraint

Competition from Alternative Distributed Generation Sources such as Rooftop Solar Photovoltaic (PV)

Rooftop solar PV is the most widely-used distributed generation source globally, and it has significant advantages over distributed and small wind turbine generation. Most significantly, solar rooftop PV systems are fiscally a much more sensible option, with lower capital investments and O&M costs.

Rooftop solar has had a significant decline in price over the last decade, primarily due to rising efficiencies of solar panels and economies of scale. Solar PV module prices have fallen by around 90% since 2009, while wind turbine prices have fallen by only 55-60% since 2010. The price decline is expected to increase the market share of solar in the global renewable energy market at the expense of less economically viable renewable technologies, such as small wind turbines. Moreover, modern rooftop solar has advantages, such as comparable capacity factors and a lack of land requirement. They also need lesser maintenance and refurbishment and are almost ideally suited to distributed generation in off-grid applications.

Due to the above factors, solar PV is expected to dominate the distributed generation market. The market for small wind turbines is expected to grow only in geographic segments where solar PV is unsuitable due to low solar irradiation. This is expected to significantly restrain the growth of the small wind turbine market during the forecast period.

Global Small Wind Turbine Market Opportunities

Commercialization of Building-Integrated Wind Turbines

The deployment of small wind turbines atop high-rise buildings has been investigated and implemented in limited capacities across many Western countries. This technology can redefine renewable energy generation and consumption in urban neighborhoods with a high carbon footprint. The development and mass deployment of building-integrated wind turbines (BIWTs) is a significant growth opportunity for the small wind turbine market.

As the building and turbine share a common structural base, it limits the maximum load of the turbines, constraining the maximum size of wind turbines. Due to this, only small wind turbines can be deployed atop tall buildings. BWIT systems have been integrated into significant landmark buildings across the globe. In 2008, the first large-scale BWIT system was launched as a part of the World Trade Centre, Bahrain, and consisted of three 29m horizontal axis turbines suspended between two 34-story towers of prime office space. Since then, BWIT systems have been deployed across prominent skyscrapers and buildings in the United States and Europe. The large-scale commercialization of BWITs is expected to be a significant growth opportunity for the small wind turbine market.

Segmental Analysis

The global small wind turbine market is segmented by axis type, application, and region. 

By Axis Type Analysis

By axis type, the global market is segmented into vertical-axis wind turbines and horizontal-axis wind turbines. The horizontal axis wind turbine segment accounted for the largest market share during the forecast period. The horizontal axis wind turbine (HAWT) has the main rotor shaft and electrical generator at the top of the tower, and it may be pointed toward or away from the prevailing wind by a simple wind vane. The horizontal axis wind turbine segment has a significant share in the small wind turbine market. It has been in production for over three decades, whereas most small vertical axis wind turbines (VAWTs) were produced in the last ten years. The small HWAT receives impetus due to techno-economic benefits associated with the same. The small horizontal axis wind turbine at high-speed wind benefits low-cost wind energy generation, devoid of a skilled workforce and easy maintenance. All such factors drive segment growth. 

The vertical axis wind turbine segment is the second largest. Vertical axis wind turbines (VAWTs) are becoming popular, especially in the residential sector. Although VAWTs are less common than HWATs due to their lesser efficiency, VAWTs are quite suitable for deployment at residential sites. Apart from residential use, the VAWTs power street lights, as they are relatively compact and visually appealing.

A few of the significant advantages that are likely to enhance the industry outlook of the small VAWT market during the forecast timeframe include the following:

• A key advantage of VAWT is that it does not need to be pointed toward the wind to be effective, which indicates that it can be used on sites where the wind direction is highly variable.
• These turbines can be used where tall structures are not allowed. As VAWTs are mounted closer to the ground, maintenance is easier.
• VAWTs are quiet, efficient, economic, and suitable for residential energy production, especially in urban regions. The operations of VAWTs can be initiated with lower wind startup speed.

By Application Analysis

By application, the global market is segmented into on-grid and off-grid. The off-grid segment accounted for the largest market share during the forecast period. Off-grid small wind power plays a vital role in remote areas of underdeveloped and developing countries. Off-grid applications include rural residential electrification, telecommunication stations, offshore generation, etc., and off-grid systems include hybrid systems coupled with a diesel generator and solar. According to the Ontario Ministry of Agriculture, Food, and Rural Affairs (OMAFRA), average annual wind speeds of at least 4.0-4.5 m/s are required for a small wind turbine to operate at optimal power output levels. These small wind turbines for off-grid applications can be connected with battery storage for energy storage purposes. As the cost of energy storage batteries has declined in recent years, the small wind power system and battery storage witnessed improved business viability for deployment at off-grid communities.

Furthermore, the aging transmission and distribution (T&D) infrastructure and the harsh weather conditions made various regions worldwide more prone to power shortages. For instance, in February 2021, the Texas power crisis, a massive electricity generation failure in the state of Texas, United States, resulted in a shortage of food, water, and heat, leaving approximately 4.5 million homes deprived of essential utilities. Thus, the aging power infrastructure worldwide will likely increase the demand for distributed energy sources, including off-grid small wind turbine systems, to get an uninterrupted power supply during the forecast period.

Regional Analysis

By region, the global small wind turbine market is segmented into North America, Europe, South America, Asia-Pacific, and Middle East & Africa

North America accounted for the largest market share during the forecast period. North America is among the major markets for small wind turbines. The major factors driving the demand for new installations are increasing investment in the renewable energy sector and an increasing shift toward grid-independent electricity generation. Moreover, the reinstated Residential Renewable Energy Tax Credit for small wind turbines and extended Business Energy Investment Tax Credit for small wind projects, which start construction by the end of 2022, is expected to drive the small wind turbine market in the future. Although the smaller turbines still account for most units sold in the distributed wind projects, the installed capacity of larger-sized turbines is rising. This trend is expected to negatively impact the global market during the forecast period.

Asia Pacific is the second largest region. The Asia-Pacific region is among the largest small wind turbine markets, mainly driven by countries like China, Japan, South Korea, and others. China holds the largest wind power generation capacity globally, with 288.3 GW of installed capacity as of 2020. The country installed 25.65 MW of SWTs in 2020, reaching a cumulative installed capacity of 610.6 MW. The country first introduced FiT from onshore wind in 2009; it currently offers FiT for small wind turbines ranging from EUR 13.4-20.1 ct/kWh. China's government has been promoting small wind power deployment since the early 1980s. It is one of the few developing economies actively developing in this sector. The country's annual small wind turbine capacity additions have been declining in recent years, mainly due to decreasing FiT rates. Chinese SWT application is shifting from rural electrification oriented to city streets illumination and telecom stand-alone power systems. It is developing rapidly in these new application fields. Furthermore, an off-take in distributed power generation, supportive policies for mini-grid development, and rural electrification programs will likely augment SWT demand in China.

Europe is the third largest region. Europe is one of the significant markets for small wind turbines, with most installations in countries like Germany, Denmark, the United Kingdom, and Italy. The major factors driving the demand are increasing investment in the renewable energy sector and an increasing shift toward distributed electricity generation. Germany had Europe's largest onshore wind generation capacity of over 62.85 GW as of 2020. The country is considered among the top three markets in the onshore wind turbine industry. As of 2020, the country's small wind turbine capacity of turbines with a capacity of up to 50kW stood at 35.75 MW. Competitive FiT, more certain policies regarding small wind power compared to other nations in the region, and the ability of the wind turbines to complement the solar power plants led to the growing deployment of small wind power, during 2015-2020, as a part of the small-scale solar-wind hybrid plants. The ability of small wind turbines to complement small-scale solar power plants is expected to drive the market during the forecast period.

Recent Developments

• March 2022 - Aeolus is celebrating five years of serving the offshore wind market. 
• June 2019 - Aeolus is proud to have supported the 450MW NnG project, developed by EDF Renewables, reaching this milestone. The project consists of 54 Siemens Gamesa 8MW turbines and will be one of the deepest non-floating wind farms constructed using jacket foundations.
• January 2021 - The Intergrid inverter, manufactured by Matric Limited of Seneca, Pennsylvania, as part of a 2020 CIP manufacturing innovation award, fills a void in the distributed wind industry by providing an interconnection-code-compliant inverter designed for use with wind technology that is compatible with other distributed energy technologies.

Small Wind Turbine Market Segmentation

By Axis Type

• Horizontal Axis Wind Turbine
• Vertical Axis Wind Turbine

By Application

• On-grid
• Off-grid

By Region

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa