The increasing number of residential, commercial, and industrial spaces is propelling the demand for a reliable, safe, continuous, and cost-effective supply of energy, stimulating microgrid technologies. Advantages of microgrid include reliability, enhanced energy efficiency, reduced consumption of electricity, security, cost-effectiveness, voltage control, and congestion relief.
The global microgrid market size will witness unprecedented growth over the years, reaching $38 billion in value by 2026. This is primarily due to investments being made by the governments to provide access to electricity in remote villages and districts. With respect to power source, the market is segmented into natural gas, diesel generators, solar PV, and CHP.
In 2017, the total net electricity generation in the EU was recorded at 3.1 million GWh and is expected to grow at a rapid rate owing to increasing developments in data centers, residential buildings, and the automobile industry.
The solar industry is witnessing favorable support from public and private entities towards encouraging the use of solar-sourced microgrids to boost renewable energy deployment. The total adoption of solar energy in the UK has increased from 5,488.6 MW in 2014 to nearly 13,259 MW as of June 2019. By 2023, the total solar capacity is in the country is anticipated to rise to 15,674 MW.
Evolving renewable energy applications
Fiscal benefits provided by the governments to encourage the adoption of solar power are positively influencing the market dynamics. Incentives such as, tax rebates, investment tax credits, leveraging schemes, FIT, and subsidies will considerably propel the deployment of solar power.
Various market players are investing towards R&D activities to improve the efficiency of the product and render operational flexibility. The US Department of Energy had established a photovoltaics subprogram a few years ago that supported research and development projects with an aim to reduce the manufacturing cost and improve reliability of PV technologies. The program is focusing on reaching the levelized cost of energy of $0.03 per kilowatt-hour.
Efforts like these will bolster renewable energy deployment and enhance microgrid industry trends over the coming years. Further, the increasing rate of carbon emission leading to environmental degradation is driving the use of sustainable sources of energy.
In 2017, electricity accounted for 28% of the total share of greenhouse gas emissions in the US. Prominent market players are heavily investing towards the optimization of microgrid to lower emissions and enhance fuel efficiency to meet the stringent targets set by the government bodies across the globe.
Establishment of microgrid projects in the US
Increasing investment by electric companies across the US towards the deployment of technologically advanced energy solutions such as storage of energy, microgrids and private solar is supplementing the regional business growth. As of 2018, the total capacity of microgrids projects planned and operational in the region was estimated at around 7,000 MWs.
In 2018, Michigan had introduced a bill that sought the adoption of microgrid standards, develop service rates and assess the costs of utilizing microgrid systems for powering critical infrastructure. In Hawaii, a legislation was passed for establishing microgrid service tariffs for the state power company and its subsidiaries. US microgrid market share is expected witness substantial expansion, owing to similar moves taken by other starts nationwide.