Microgrid Market Report (2024-2030) - Size and Share Analysis, Industry Trends, and Growth Forecasts
This Report Offers Deep Insights into the Microgrid Market and is Segmented into Connectivity (Grid-Connected, Off-Grid), Offering (Hardware, Software, Services), Power Source (Natural Gas, Solar PV, Combined Heat and Power, Diesel, Fuel Cell), End Use (Commercial, Industrial, Military, Government, Utilities, Education, Healthcare).
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The microgrid market generated revenue of USD 32.1 billion in 2023, which is expected to witness a CAGR of 18.6% during 2024–2030, reaching USD 105.3 billion by 2030. The market is experiencing growth due to the increasing demand for reliable and resilient power solutions. Essentially, the increasing EV charging infrastructure demand, renewable energy integration, and rising focus on electrifying rural areas contribute to the expansion of the market globally.
The deployment of smart grids and their digitalization are other crucial factors behind the growth of the market. This integration helps in superior energy management and optimization in microgrids. Such facilities can boost energy consumption, storage, and generation, which results in enhanced cost-effectiveness and energy efficiency. This can be done with internet of things (IoT) devices and real-time monitoring.
This combination not only gives rise to new possibilities for energy management but also boosts the adoption of cutting-edge solutions and the development of intelligent power systems. With the help of digital technologies, microgrids can respond effectively to dynamic energy demands and make data-directed decisions to maximize efficiency. This combination of technologies helps provide complex energy management tools, reduce costs, improve operational performance, and achieve sustainable goals.
The rapid urbanization and population growth in developing markets over the last few years have become reasons for the increase in the government spending on infrastructure development. It is likely to play an important role in propelling the power demand, which will lead to market growth.
Microgrid Market Trends and Drivers
Smart Grids Propel Clean Energy Adoption
The increasing demand for clean energy is a crucial aspect of the wide adoption of smart grid initiatives worldwide. These escalating concerns surrounding environmental sustainability and climate change are driving the integration of cleaner energy sources into the existing power infrastructure.
Smart grids help in the transition by enabling the incorporation of advanced technology and intelligent systems. These facilities assist in the seamless integration of renewable energy sources, especially solar and wind.
Increasing Requirement of Charging Infrastructure For EV
Electric vehicle charging infrastructure is rapidly expanding, which is further increasing the demand for microgrids. The increasing adoption of EVs adds fuel to the consumption of electricity, specifically in places with many charging locations.
Microgrids provide a reasonable solution for the integration of localized power generation and distribution, which efficiently manages the additional electricity load originating from EV charging.
This infrastructure eliminates the need for costly grid upgrades and reduces grid congestion through the optimization of load management, distribution, and energy generation.
High Installation and Maintenance Burden Limit Market Potential
Microgrid systems have a higher than traditional power grids. The infrastructure costs include those for all the things from setting up communication systems to installing smart meters and maintaining them. Smart meters cost 50% more to install than traditional meters.
Microgrids are majorly used for distributed energy resources (DERs), which are also more expensive than traditional power plants.
It is also very expensive to make a new microgrid or convert a current system into a hybrid system.
Segmentation Outlook
Off-Grid Category to Grow with 18% CAGR
The grid-connected category dominated the market, with a share of around 75%, in 2023. Grid-connected microgrids consist of many generators, complex controllers, and distribution networks. Grid connectivity ensures electricity quality, lowers environmental effects, and enhances demand response, in addition to grid resilience.
Most rural and urban areas (especially remote ones) often face problems in accessing the main grid since it is limited or does not exist, which makes grid-connected microgrids popular. The growth in the adoption of distributed energy sources, such as energy storage systems and solar panels, has added fuel to the market growth.
Further, microgrids are gaining popularity as communities look for methods to eliminate their carbon footprint. Developing countries are widely using remote microgrids to provide electricity to remote locations.
The off-grid is a speedily growing category, with an expected CAGR of over 18.8% during 2024–2030 in the market. This growth is due to the rising need to provide electricity in remote areas.
The demand for power infrastructure is increasing in rural areas, and due to easy installation, off-grid microgrids are being adopted to improve the existing electricity infrastructure here.
During the study, we analyzed two connectivity types in the report:
Grid-Connected (Larger Connectivity Type)
Off-Grid (Faster-Growing Connectivity Type)
Offerings - Hardware is the Largest Category
The hardware category is the largest, with a share of around 55% in 2023. This is attributed to the increasing number of government projects to decrease greenhouse gas emissions and support clean energy, reasonable costs of energy storage, and the rising number of microgrid projects worldwide.
Hardware for such a system contains energy storage systems, power generators, and controllers.
The software category is set to be the fastest growing, with a CAGR of around 19.0%, during 2024–2030. This is due to the crucial role of software in modeling variable energy sources, such as wind and solar, and helping manage inconstant thermal loads. A microgrid has several types of software for system reconfiguration software, generator and load management, energy management, and SCADA.
Apart from helping in their operations, these software solutions simplify the process of the simulation and resource management of microgrids. Cutting-edge software tools are being used for microgrid optimization, enabled by the advancements in data analytics, artificial intelligence (AI), and machine learning (ML).
Further, offerings are categorized into:
Hardware (Largest Offering)
Software (Fastest-Growing Offering)
Services
Solar PV Category is Gaining Momentum
The solar PV category will have the highest CAGR, of around 19.4%, from 2024 to 2030. This growth is associated with the technological advancements in the production process of organic solar PV modules.
Tata Power Renewable Energy has commissioned a 1.04-MW solar system, featuring 1,900 bifacial PV modules, for the Chengmari Tea Estate in India.
Recently, the Indian government made some changes in the Electricity Act to promote the installation of rooftop solar systems.
Combined heat and power (CHP) dominated the market, with a share of around 25%, in 2023. This is because CHP plants are capable of utilizing a wide range of energy sources, such as biogas, biomass, and fossil fuels. CHP has a versatile nature, which makes it a sustainable and efficient choice for both thermal management and energy generation. Additionally, it provides improved energy efficiency when compared to the older power generation methods.
Further, the demand for CHP is on the rise in industrial complexes, institutions, and hospitals due to its ability to contribute to sustainable goals, reduce energy bills, and increase energy resilience.
Below are the power sources studied for this report:
Natural Gas
Solar PV (Fastest-Growing Power Source)
Combined Heat and Power (Largest Power Source)
Diesel
Fuel Cells
Others
Industrial Category is the Fastest Growing End User
Industrial is the fastest-growing end user category and will have a healthy CAGR of 19.6% from 2024 to 2030. This is because industries are increasingly employing microgrids for many benefits, such as reasonable cost, uninterrupted operations, and enhanced energy resilience.
Industries are also investing a large sum of money in microgrid solutions as the demand is rising for secure power sources, along with the need to decrease carbon footprints.
Utilities are the largest category, holding a share of around 30% in 2023. This supremacy is due to the increasing focus on the evolution toward a cleaner energy future and sustainability.
Utilities are empowered by microgrids to combine renewable energy sources, enhance grid stability, and counter the changing demand trends.
Further, the end use categories are written below:
Commercial
Industrial (Fastest-Growing Category)
Military
Government
Utilities (Largest Category)
Education
Healthcare
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North America is the Largest Region
Geographically, North America is the largest region, holding a share of around 50% in 2023. This dominance is due to the accessibility of stable, affordable, and reliable power.
Captive power generation methods are widely used in the industrial and municipal sectors of the U.S. to reduce the dependence on government-controlled power supply.
APAC is expected to be the fastest-growing region, with a CAGR of around 19.3%, from 2024 to 2030. This is due to the favorable government policies for rural electrification, increasing penetration of smart grids, rising focus on renewable energy, and growing demand for a reliable and resilient power supply.
The APAC region is susceptible to natural disasters, such as earthquakes, landslides, ice storms, tsunamis, and cyclones. Microgrids can provide a robust and reliable power supply in the aftermath of such a disaster.
Additionally, this region is ahead of others in terms of the adoption of renewable energy. Microgrids are used to incorporate renewable energy sources into the grid, which makes the entire power system more sustainable.
These regions and countries were analyzed for this report:
North America (Largest Regional Market)
U.S. (Larger Country)
Canada
Europe
Germany (Largest and Fastest-Growing Country Market)
Brazil (Largest and Fastest-Growing Country Market)
Mexico
Rest of LATAM
Middle East and Africa (MEA)
Saudi Arabia (Largest Country Market)
South Africa
U.A.E (Fastest-Growing Country Market)
Rest of MEA
Competition Analysis
A large amount of money is being spent on R&D by major market players to expand their product portfolios. Different strategic approaches are also being implemented to enhance their presence globally, including mergers and acquisitions, partnerships, contractual agreements, and product launches.
Several competitors are offering cost-effective items to grow and survive amidst the rising competition. One of the main focus areas of the companies operating in the microgrid industry is to lower the operating costs of these systems.
Top Microgrid Companies:
Siemens AG
Eaton Corporation plc
ABB Ltd.
General Electric Company
Honeywell International Inc.
Schneider Electric SE
S&C Electric Company
Power Analytics
Hitachi Energy Ltd.
PECO Energy Company
Spirae LLC
Homer Software
Microgrid Companies News
EcoStruxure Microgrid Flex was launched by Schneider Electric in May 2023; it alters project timelines and leads to higher returns on investment.
Schneider Electric released the Easy UPS 3-phase modular inverter in April 2023. It has a capacity ranging from 50 to 250 kW, along with the N+1 scalable configuration. The product incorporates the EcoStruxure architecture, which enables remote monitoring for enhanced performance management and monitoring.
Swinburne University of Technology partnered with Siemens in February 2023 to accelerate the energy transition and achieve net-zero objectives. An advanced Energy Transition Hub at Swinburne University's Hawthorn campus in Melbourne, Australia, was also established through this partnership.
AEP Ohio offered Eaton Corporation a contract in February 2023 to strengthen the resilience and sustainability of crucial water infrastructure in Columbus, particularly at the Tussing Water Booster Station.
Schneider Electric and ORPC Inc. signed an MoU in December 2022 to work together on microgrid projects, to modernize marine energy as a commercially viable renewable energy source.
Eaton Corporation, along with Planair, Yverdon Energies, and Smart Energy Link (SEL), signed a deal in August 2022 to work on the SunnYparc Microgrid Project. This deal centered on creating a microgrid demonstrator that can supply electricity to local businesses and, at the same time, charge up to 350 electric vehicles.
Eaton and Microsoft made their collaborations to boost the worldwide adoption of Eaton's EnergyAware UPS technology in major sectors more extensive in June 2022.
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