The term “microgrid” evokes a modernistic, almost futuristic, package of technologies that can provide electricity for one or more customers in a clean, diverse and sustainable way. The use of renewables like PV, multiple energy sources, energy storage, ability to connect or disconnect from the grid based on power availability or pricing, and the like, warms the hearts of advocates of sustainability, clean energy and addressing climate change. Examples of such microgrids dot the headlines in trade and occasionally the public media.
However, the present market reality is quite different from this golden scenario. GTM Research has published a study which depicts the present microgrid market in a more pedestrian manner, while analyzing the way forward to the types of systems that realize all the benefits available. The report, “U.S. Microgrids 2017: Market Drivers, Analysis and Forecast”, examines a universe of 1,900 existing and planned microgrids in the U.S.
The sobering part is a useful description by GTM Research of the difference between basic and advanced microgrids. Essentially, a basic microgrid is a simple application of one energy source that supplies an onsite generator in the event of a power interruption. This presently constitutes the largest market segments of microgrids. These are primarily for commercial operations in the Gulf Coast states like Florida or Texas, use onsite stored diesel or pipeline sourced natural gas as backup to onsite generators, and generally operate only in the event of a power outage, typically from weather related events.
The forward looking portion of the study indicates a much more optimistic scenario for the PV, clean energy and sustainability communities. Advanced microgrids are coming to the forefront, becoming more geographically diverse in the U.S., particularly in the Northeast and Southwest regions. Commercial markets are still expected to predominate in advanced microgrids, as earlier segment leaders like military, university and public sector customers have, for the time being, declined greatly in 2017.
The push for advanced microgrids is greatly abetted by state policies and incentives, as well as the growing realization of and opportunity for reliability and price risk management by decision makers. Market growth of microgrids is expected to average between 10% to 18% annually to 2022, from presently over 3 gigawatts (GW) to 5-8 GW. The good news for the PV industry has been a significant increase in technology participation from a previous 3% of capacity to 26% in the latest available numbers.