Though still sparsely utilized due to the infancy of the concept, microgrids are seeing a surge in growth as they offer unique opportunities to harness green energy.
Microgrids—a small power system that can operate independently of the macrogrid—use less than 0.2 percent of all U.S. electricity, according to the Center for Climate and Energy Solutions. However, that capacity is expected to more than double by 2020, as certain states create funding opportunities and attract developers.
These self-contained power systems can light up commercial facilities, residential neighborhoods or remote communities. They can operate on a range of sources, including emerging technologies like fuel cells and modular nuclear reactors and are able to harness the power of on-site energy by collecting the heat from a nuclear reactor or the wind or sunlight over surrounding land. Using renewable resources, the microgrid can generate zero-emission electricity. And finally, the microgrid can keep running when storms or blackouts cause the macrogrid to lose power.
Most microgrids are located in seven states—Alaska, California, Georgia, Maryland, New York, Oklahoma and Texas. In Brooklyn, a project is moving forward to power a low-income housing community with a lithium-ion-battery microgrid. A public-private development in Denver is using a solar-powered microgrid. And another public-private partnership in Maryland is developing two microgrids to power county facilities.
Because microgrids are a relatively new concept, they face unique financial and legal hurdles. Some states do not have an adequate legal definition of a microgrid, and the shaping of new regulations could impact the feasibility of new microgrids. State funding and public-private partnerships are among the most appealing sources of financing, with several states committing millions toward microgrid projects. New York has created NY Prize, a $40 million grant program to create business model templates for community microgrids that can be emulated across the country. And California has awarded $27.3 million to 10 microgrid and electric vehicle charging projects.
Despite the challenges, demand for microgrids is growing. The microgrid market, valued at $16.58 billion in 2015, is estimated to reach $38.99 billion in 2022. As interest in green energy continues to rise, so too will the demand for systems, like microgrids, that use that power efficiently.