A growing number of businesses appear ready to adopt small-scale, onsite 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 telephone surveys and in-depth interviews with 627 industrial companies and commercial businesses that use between 10kW and 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 those same businesses said they are already actively evaluating distributed-energy options, including natural gas reciprocating engines, microturbines, and fuel cells.

In addition, the study 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.

“Given the size of the potential market identified in the study, 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. “Such interest and activity was virtually nonexistent as recently as two years ago and suggests that we may be on the verge of a real growth spurt in distributed energy.”