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Wood Mackenzie estimates that the US microgrid market has seen a 47% increase in solar and storage capacity in 2022 compared to 2017 levels. The US microgrid market reached 10 GW in the third quarter of 2022, with more than 7 GW in operation and the rest in the planning or construction phases, according to the latest analysis from Wood Mackenzies Grid Edge Service. Microgrids are groups of distributed energy resources, such as solar modules on a home, connected to a battery system, that can be disconnected from the grid and operate independently during a power outage. “Despite the global Covid-19 pandemic and associated macroeconomic challenges that have caused a two-year slowdown in the United States, the microgrid market is developing at a rapid pace and 2022 is on track to be a record year in scheduled installations and pipelines,” says Elham Akhavan, principal research analyst at Wood Mackenzie. Akhavan noted that microgrids are being installed in various customer segments, with commercial and industrial leading the way. Microgrids are being adopted in sectors such as department stores and manufacturing, “indicating increased demand for uninterrupted service,” he said, adding that the government sector comes in second, closely followed by residential sectors. and educational. Military microgrid installations will likely grow as a result of the US Armys goal to install a microgrid at every facility by 2035. These will include large-scale renewable generation and battery storage, with the goal of being able to “self-supply their critical missions” in all Army installations by 2040. According to Wood Mackenzie data, the US microgrid market saw a 47% increase in solar and storage capacity additions in 2022 compared to 2017 levels. Additionally, the data shows that more than 175 solar and microgrid projects solar plus storage have been in active development and were scheduled to come online in late 2022. “There has been a significant shift in the type of technology, particularly the increase in solar and storage demand among microgrid customers, driven largely by corporate ESG goals,” Akhavan said. He noted that there has been an increase in “multi-distributed energy resource (DER) microgrids,” which can include a fossil fuel generator acting as a standby power generator in cases where solar power and batteries alone cannot mitigate long-term outages. Business models The microgrid-as-a-service (MaaS) business model is expected to see continued growth in several non-utility customer segments, and according to Wood Mackenzie data, the share of MaaS deals grew 25% between 2019 and Q3 2022, while the percentage of microgrids owned by end users fell 31% between 2019 and Q3 2022. “While third-party financing in general is not a new model, MaaS is evolving beyond PPA contracts, which often involve the acquisition of a single DER, to an affordable solution for financing the construction, operation and maintenance of multiple DERs. , tailored to the customers energy goals,” added Akhavan. Data from Wood Mackenzie shows that there are 28 states with utility microgrids, with approximately 35 MW of projects expected to come online by 2022. This brings total microgrid capacity to more than 1.1 GW. “While utility companies typically look for fee-based microgrids, some are partnering with developers to offer microgrids to their customers under MaaS agreements,” Akhavan said. “For example, Enchanted Rock announced a utility partnership program in early 2022 that enables utilities to offer end-to-end “resiliency as a service” to their customers.” Enchanted Rock deploys commercial-scale microgrids that use natural gas and renewable natural gas (RNG) to reduce carbon emissions and pollutants found in traditional diesel generators. Akhavan estimates that we will see more than 20% growth in annual microgrid capacity installation if the market continues on its current trajectory. The sector has experienced growth in the Northeast, where a number of competitive grant programs support resiliency projects for critical facilities. “The West Coast, led by California, is growing substantially, with a strong pipeline of projects coming online in 2024. This is closely followed by the Southwest market, which has expanded more than three-fold since 2019. Texas is the leader, with two of the major developers in the region, PowerSecure and Enchanted Rock, having installed full capacity so far in 2022,” Akhavan added. |
