The worldwide distributed and cogeneration (DCG) market will grow from 53 GW in 2003 to 78 GW in 2008, creating a US$30 billion opportunity by 2008, according to “Distributed and Cogeneration – Technology and Markets, Volume 1; Worldwide Forecasts, Applications and Competitive Environment” recently released by Darnell.Corona, California – April 1, 2003 [SolarAccess.com] “Current political, economic and environmental issues around the world are creating new markets for distributed and cogeneration,” said Ye Chu, author of the new report. “With a growing demand for power security and power independence in the U.S., Europe and Asia, the market is waiting for another wave of significant growth once the economy picks up and restrictions on capital spending are released. Growth is expected to accelerate in 2004.” This report looks into a variety of factors that have driven and will continue to drive the DCG markets worldwide and in specific regions. As an alternative to traditional centralized power generation, the development of DCG relies on government policies and a supportive regulatory framework, including tax credits, buy-down programs to compensate the high initial capital cost, renewable portfolio standards that set a certain percentage of power generated from Renewable Energy resources, streamlined application, testing and permitting process for DCG projects, and standardized regulations on grid interconnection issues. As far as cogeneration is concerned, output emission standards are required in order to capitalize on the high overall system efficiency of CHP and its environmental benefits. This report details widely varying adoption of various DCG technologies in different national markets including the success of the German wind energy market and the Japanese photovoltaic (PV) market, and the dramatic fluctuation of the U.S. wind energy market. Germany and Japan are among the first to use national energy policies to promote clean energy sources. Since early in 1990s, laws in Germany have required utilities to buy electricity generated from wind, solar and other renewable sources at a high fixed rate. By the end of 2002, Germany has become the undisputed “wind superpower” with 39 percent of the world’s installed wind energy capacity. Similarly, by providing direct subsidies toward PV installation costs and heavy government investment in PV technology research, Japan dominates the world PV market with 46 percent of total installed capacity. By contrast, the uncertainty of the wind energy production tax credit (PTC) in the U.S. left the industry in a devastating situation. The last-minute purchases before the PTC was terminated at the end of 2001 resulted in surging sales of 1,690MW of wind energy capacity in 2001. As the PTC was extended till the end of 2003, sales in 2002 stumbled to merely 410 MW.