Global Microgrid Market Report and Forecast 2024-2032

Global Microgrid Market Outlook

The global microgrid market size reached approximately USD 28.98 billion in 2023. The market is projected to grow at a CAGR of 10.4% between 2024 and 2032, reaching a value of around USD 70.74 billion by 2032.

Key Takeaways

• Microgrids are crucial for maintaining a reliable supply of power in diverse industries.

• Growing integration of renewable power sources to achieve sustainability goals is a key factor shaping the market trends.

• Fuel cells are used in microgrids that prioritise low emissions and sustainability, especially in urban or environmentally sensitive areas.

A microgrid refers to a separate energy network composed of interconnected charges and distributed energy supplies that can operate alongside or independently of the main power grid. Microgrids are commonly known to be smaller versions of power grids, which provide electricity to customers from producers, help reduce overall costs in the case of an emergency and provide redundancy for the grid. They are more powerful, together with a range of other renewable sources like solar, wind, small hydroelectric power, geoelectric, waste energy systems, and heat and power combined (HPCP) systems than conventional electrical grids. Microgrids are a reliable energy source because they continue to work during power outages.

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The increasing demand for microgrid systems which allow customers and developers to achieve environmental goals by using renewable energy as a source of electricity is one of the crucial factors driving the microgrid market growth. Governments of many countries are also taking steps to set up bioelectric power, solar, and wind farms. Others have legislation, such as the Clean Power Plan (CPP), which seeks to reduce carbon dioxide emissions, enforced by countries such as the United States. A variety of technological advancements have also been made to increase the performance of battery inverters to ensure an uninterrupted power supply via microgrids. In addition, better battery technology with higher power inputs and outputs has also been developed for a longer time.

These days, the reliance on new communication technology like wireless cloud computing is growing, making electricity networks vulnerable to cyber-attacks and hackers. For this purpose, a stable network with 24/7 power is required in certain industries, such as military and research laboratories, which are given by microgrids, as they can be run in 'island mode' independently from all external power and data transfer. This is expected to support the growth of the microgrid market globally.

The ability to deliver improved performance against low transmission losses is another factor boosting the demand as microgrids produce local power and decrease reliance on long-haul lines and therefore reduce transmission losses.

Key Trends and Developments

Integration of renewable energy sources; growing advancements in energy storage solutions; rapid digitalisation and adoption of smart technologies; and regulatory and policy support are the major trends impacting the microgrid market expansion

Microgrid Market Trends

The increasing incorporation of renewable energy sources like solar, wind, and hydroelectric power into microgrids is a response to a global push for sustainability. Renewable energy sources produce electricity with minimal to no greenhouse gas emissions, significantly reducing the environmental impact compared to fossil fuel-based power generation. By using locally available renewable resources, microgrids enhance energy independence and security and contribute to microgrid market development. This is particularly valuable for remote or isolated communities with limited access to the central grid or regions that rely heavily on imported fuels.

In February 2024, Toshiba and Aquatera announced that they are developing a pilot microgrid project, leading a consortium. The consortium has secured USD 1.9 million investment from the UK government, showcasing a significant commitment to support renewable energy projects and international cooperation in sustainable development. The project aims to design and implement a microgrid system on a remote island in Thailand which will integrate wave energy as its primary source, highlighting an innovative approach to utilising renewable resources.

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Market Segmentation

“Microgrid Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Solar photovoltaic accounts for a significant microgrid market share due to the rising demand for renewable energy sources

Solar photovoltaic (PV) holds a significant share of the microgrid market due to its decreasing cost, scalability, and global push for renewable energy sources. It is favoured for its relatively easy installation in both rural and urban settings and its low operating costs. Solar PV's popularity is also driven by its environmental benefits, contributing to its high market share.

Diesel generators are commonly used in microgrids as backup power sources as they can quickly start up. They are common especially in remote or off-grid locations due to their reliability and the high energy density of diesel fuel as they are often used for backup or emergency power in microgrids.

Meanwhile, natural gas is also expected to grow at a sizeable rate, especially for Combined Heat and Power (CHP) systems. Natural gas can provide baseline power to a microgrid and adjust output to follow daily and seasonal load variations. Natural gas CHP systems are efficient, as they can provide both electricity and heat from a single fuel source. This efficiency, combined with the relatively lower emissions of natural gas compared to coal and diesel, makes it a popular choice for microgrids, particularly in urban or industrial settings.

The utility/community segment maintains its dominance in the market due to the rising demand for sustainable energy sources in these sectors

The microgrid market is supported by its growing applications in the utility/community segment as microgrids can integrate renewable energy sources, provide grid services, and enhance resilience against grid outages. The push for decarbonisation and energy independence in urban and suburban areas further boosts the adoption of utility/community microgrids.

Institutional and campus microgrids are typically the second-largest segment. These microgrids serve universities, hospitals, corporate campuses, and other large institutions. They are favoured for their ability to provide reliable, efficient, and green energy solutions that can operate independently from the main grid.

Competitive Landscape

The market players are collaborating to develop large scale energy projects, involving microgrids, to meet the rising global demand for energy and further their sustainability efforts

The market comprises a diverse set of players that work across various segments, offering solutions that range from hardware (like solar PV panels, batteries, and control systems) to software (for energy management and grid analytics) and services (including design, construction, operation, and maintenance).

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Microgrid Market Analysis by Region

The dominant region for the market is North America, accounting for a quarter of the market share. Development in the region is triggered by the growing use of microgrids in defence as well as remote systems to improve cyber-attack protection. North America, particularly the United States, has experienced several high-profile extreme weather events and natural disasters that have highlighted the vulnerability of the traditional electricity grid. Microgrids offer a way to maintain power during grid failures and are thus seen as a crucial component of disaster preparedness and response.

The Asia Pacific microgrid market is also expected to grow readily as many countries in the region are undergoing rapid urbanisation and industrialisation, leading to increased demand for reliable and efficient energy sources. Microgrids offer a solution to meet this growing demand, especially in urban areas where energy reliability is critical for economic activities.

Key Highlights of the Report

Microgrid Market Report Snapshots

Microgrid Market Size

Microgrid Market Trends

Microgrid Market Regional Analysis

Microgrid Companies