A growing number of businesses appear ready to adopt small-scale, on-site applications of electric-generating technology, or distributed energy, to address concerns about power reliability and energy-price volatility, according to a new study released by Primen, a Madison, Wis.-based energy market intelligence company.

Based on surveys and interviews with 627 industrial companies and commercial businesses that use 10kW to 5MW of electricity, the study, entitled “Distributed Energy at the Tipping Point: Customers' Growing Receptivity to Grid-Alternative DE,” found that more than 10% of U.S. and Canadian businesses in five sectors identified themselves as “strong candidates” for base-load distributed energy applications during the next two years. Nearly half of the businesses said they are actively evaluating distributed energy options, including natural gas reciprocating engines, microturbines, and fuel cells.

The study also uncovered the motivation behind the companies' interest: deregulation. Representatives of several companies surveyed said their experience with deregulation has made them highly skeptical that retail competition will lower their energy costs. Those showing the most interest in distributed energy are located in California. Conversely, businesses in states and provinces just beginning the transition to retail competition are among the least likely candidates for the electric grid alternative.

“Even a moderate success will substantially increase the base-load distributed generation installed in North America in a short time,” says Nicholas Lenssen, senior director of distributed energy at Primen.