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3 Trends Driving the Growth in Solar Microgrid Markets

By December 6, 2021December 7th, 2021Blog
Rows of solar panels in a California solar microgrid surrounded by chainlink fence and blue sky.

Globally, the Microgrid market is set to increase by 11.4 percent from 2021-2026, increasing nearly $17.7 billion in USD. So what is driving the increase in microgrids? Weather, Climate, Energy Independence, Technology, Power outages, Natural Disasters, and so much more. Inside, we discuss the trends that drive the increase in Microgrid systems.

What is a Microgrid?

A Microgrid is a series of small energy generators, such as solar, fuel cells, wind turbines, and backup generators that feed into a clearly defined electrical circuit. The Microgrid is connected to the electrical grid but may be disconnected to continue to provide electricity to the community it serves.

Factors that Drive the Increase in Microgrids

1. Weather and Climate Change Events

In California alone, there were 8,367 wildfires in 2021. Some were under 100 acres, and other wildfires were so devastating that entire towns were burned. Three million eighty-three thousand five hundred seven acres burned in 2021. [1]

In the US, seven hurricanes made landfall in 2021. One, Hurricane Ida caused 1.2 million homes to lose electrical power. [2]

The ongoing rise in power outages, including those that impact homes and businesses, coupled with the massive delay in energizing communities, fuels the drive for smaller, isolated power grids. Many microgrids have options for grid-tied assistance and the ability to disconnect from the grid for enhanced control during power disruptions.

2. The Cheaper Costs of Renewable Energies

Study after study shows a decline in the cost of renewable energies. Even for an energy storage system, the price is falling. A big part of that is a drop-in technology, both for creating energy and its storage. Lithium-ion battery prices are 80% what they were just five years ago. [3] The drop in cost for battery backup for solar drove up the installation of solar battery backup systems in the US. in 2019, third-quarter data shows a 93% spike in the installation of solar storage with the installation of arrays. [3]

For Microgrid installations, the lower costs of energy and storage mean that it is cheaper to install a solar array than to build a fossil fuel-burning energy production center. [3] What does that mean for commercial and industrial solar in California? It means more businesses are going solar too. It is expected that cities and private entities will install more solar panels and solar microgrids.

The shift in technology and a higher rate of implementing renewable energy, including solar energy, has made it possible to forecast the future of energy at 100% renewable. As a solar energy company in California, that is exciting. Microgrids and solar microgrids have become one of the commercial solar energy solutions in California.

3. Increasing Government Initiatives to Promote the Use of Clean Energy

The pressure for environmental care and clean air is increasing from every sector in the US and Globally. So much so that the US government is aggressively targeting greenhouse gas emissions. The current administration aims to reduce greenhouse gasses by 50-52 percent of 2005 greenhouse gas levels by 2030 and across the entire economy. [4]

The move is not only good for the environment but also the US. Renewable energy is a sector that is poised to increase dramatically. [5] The expectation is that more renewable energy jobs will enter the market as more and more states and cities set aggressive 100% clean energy goals.

Clean energy and renewable energy are becoming massive opportunities for investors of all levels, and more companies are coming on board with clean energy and environmental opportunities.

As a commercial solar company in one of the hottest energy markets in the world, we’ve seen the good that clean energy and renewable energy do. From agricultural solar energy systems to solar panel installations on college campuses, we’ve felt the increase in demand for solar energy.

Microgrids often utilize more than one type of solar energy, but some are purely solar arrays. As solar energy storage options continue to become more affordable, the demand for solar microgrids will increase. If solar energy is in your future as a commercial entity, reach out to our team. We offer many years of experience in solar for businesses, and we are happy to discuss how solar can benefit your business.

The Fed has passed a bill granting renewable energy funds, meaning an expanded tax credit for renewable energy users

Contact us to learn how you can benefit today