Distributed energy (DE) differs from centralized energy in several respects. It has the advantages of high energyefficiency because it utilizes local renewable resources,and it is located closer to end users, thus avoiding hightransmission costs. It is an effective supplement tocentralized energy systems.

Distributed energy is one of the essential characteristicsof China’s energy transition. Yet, there are still manypotential scenarios for DE development in China. Despitelarge and growing markets for some distributed energyapplications, only a small fraction of the existing economicpotential has been realized. Existing policies,technologyapplications, business models, financing sources, andstakeholder involvement have scarcely begun to addressthe true potential or capture the true long-term value ofdistributed energy.