Strong Growth Predicted for Microgrid Market

Microgrid Market

(Credit: Pixabay)

by | Oct 17, 2022

Microgrid Market

(Credit: Pixabay)

Spurred by continuing demand for energy reliability as well as multiple industries installing them, the microgrid market is expected to be worth $60 billion by 2028, according to a report from Insight Partners.

An increase in spending by countries across the world on microgrids and the electronification of transportation have also presented growth opportunities for companies that participate in the microgrid market. The report finds the market will grow at a significant 17% annual clip from 2022 through the forecast period. The microgrid market in 2021 was valued at $25 billion, according to Insight Partners.

Expansion of renewable energy use and advancing legislation to encourage clean energy transitions also are helping to grow the market, according to the report. Industries such as the military, healthcare, education, and governments have been installing microgrids at a significant rate.

The report also says the next step in the market is standardization, which will likely benefit developers and users alike. Insight Partners says the acceptance of a microgrid control standard from the IEEE is helping to encourage the development of more standards. Microgrid controls are another way for microgrids to monitor demand and usage, to help keep grids resilient. The Microgrid control market is also expected to grow at a more than 15% rate through 2030 to $14.35 billion, according to a separate report from Market Research Data.

The use of microgrids is seemingly exploding across industries and is seen as a way to keep businesses and communities efficiently using energy and keeping their power sources operational and reliable. Microgrids are a large part of the Army’s net-zero aspirations, and cities such as San Diego have installed multiple systems, such as an eight-microgrid project that is expected to save millions in energy costs.

The Daughters of Mary of the Immaculate Conception campus is installing a system that combines 1.4-megawatt hours of battery storage and 1.2 megawatts of solar energy generation. Six Bimbo Bakery locations in California are an example of a business using microgrids, which are expected to cut that operation’s carbon emissions by 25%.

General Motors recently announced a new energy business unit, which will offer battery storage and microgrids connected to fuel cells, among other technologies.

Those types of projects have been at the forefront of increased microgrid use over the past several years. According to Green Tech Media, the United States had a microgrid capacity of around 1.3 gigawatts in 2015. A US Department of Energy microgrid tracker lists 676 projects with more than 4.1 GW of capacity as of mid-2021.

The Insight Partners report says Asia-Pacific dominated the microgrid market in 2021 with around a 36% share. Some of the reasons for that implementation include a large portion of the population lacking electricity access, many countries in the region depending on energy-as-a-service business models as well as the development of modular and connected microgrids with the Internet of Things technologies prevailing in Asia.

Additionally, many of the top microgrid developers are located in the region, including China and Japan, where they are promoting the use of microgrids in industry.

Key players in the microgrid market according to the Insight Partners report include ABB Group, Eaton, General Electric, Homer Energy, Honeywell International, PECO, Power Analytics, and S&C Electric.

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