Microgrid Market by Connectivity (Grid Connected, Off-grid), Offering (Hardware (Power Generators, Controllers, Energy Storage Systems), Software, Services), Power Source, End User, Power Rating and Region - Global Forecast to 2029
Updated on : September 13, 2024
Microgrid Market Size & Growth
The global microgrid market size is estimated to be USD 37.6 billion in 2024 and is projected to reach USD 87.8 billion by 2029, at a CAGR of 18.5% during the forecast period. Some of the major factors contributing to the growth of the microgrid market include the increasing digitalization and smart grid integration, increasing usage of microgrids across various end-user industries, rising instances of cyberattacks on energy infrastructures, economic and environmental advantages of microgrid adoption and the surging demand to electrify rural areas.
Microgrid Market Forecast to 2029
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Microgrid Market Trends:
Market Dynamics:
Driver: Rising demand for EV charging infrastructure
The rapid proliferation of electric vehicle (EV) charging infrastructure is driving a surge in the demand for microgrids. As EV adoption grows, there's a significant uptick in electricity usage, particularly in areas with numerous charging stations, straining existing grid infrastructure. However, microgrids present a viable solution by integrating localized power generation and distribution, effectively managing the increased electricity demand from EV charging. By optimizing energy generation, distribution, and load management, microgrids alleviate grid congestion, reducing the need for costly upgrades. Moreover, EV charging stations often contribute to peak demand, leading to higher electricity costs. Microgrids equipped with sophisticated load management capabilities facilitate the optimization of charging schedules and load distribution, thereby minimizing peak demand, enhancing grid stability, and reducing charging costs. Moreover, microgrids synergize effectively with the incorporation of renewable energy sources such as solar panels and wind turbines into electric vehicle (EV) charging infrastructure, promoting environmentally friendly transportation and mitigating carbon emissions. Additionally, microgrids can integrate energy storage systems to complement EV charging by storing surplus energy and ensuring uninterrupted power supply during grid disruptions. Through the integration of intelligent charging technologies, microgrids provide adaptive and dynamic charging solutions, optimizing charging activities based on grid conditions, energy tariffs, and user preferences. Ultimately, the expansion of EV charging infrastructure is driving the demand for microgrids, as they efficiently manage the heightened electricity demand, facilitate the integration of renewable energy, reinforce grid stability, and enhance the resilience of charging operations.
Restraint: Complexities in grid interconnections
The challenges associated with grid interconnection pose a significant obstacle to the expansion of the microgrid market. Integrating microgrids with the existing electrical grid often involves encountering technical and logistical hurdles. Frequently, modifications or upgrades to the grid infrastructure become necessary to facilitate the seamless integration of microgrids. Grid operators and utilities typically enforce specific interconnection requirements, further complicating the implementation process and extending the timeline. Ensuring compliance with these requirements and guaranteeing compatibility between microgrids and the broader grid system can be intricate. These interconnection challenges frequently lead to project delays and inflated costs, potentially dissuading organizations from investing in microgrid installations. Addressing grid interconnection issues through the establishment of streamlined processes and clear guidelines will be pivotal in surmounting this inhibiting factor and nurturing the growth of the microgrid market share.
Opportunity: Digitalization and smart grid integration
The intersection of digitalization and smart grid integration presents enticing prospects for the expansion of the microgrid market. Incorporating cutting-edge digital technologies and integrating smart grid infrastructure enables superior energy management and optimization within microgrids. Leveraging data analytics, Internet of Things (IoT) devices, and real-time monitoring empowers microgrids to optimize energy generation, storage, and consumption, resulting in heightened energy efficiency and cost-effectiveness. The fusion of microgrids with digitalization trends not only unlocks fresh avenues for energy management but also fosters the development of innovative solutions and intelligent grid systems. Through seamless digital technology integration, microgrids can dynamically adapt to fluctuating energy demands, balance loads, and make data-informed decisions to maximize efficiency. This symbiotic relationship between digitalization and microgrids equips businesses and consumers with sophisticated energy management tools, leading to enhanced operational performance, cost savings, and sustainability improvements. The potential for advanced energy management solutions and the establishment of intelligent grid ecosystems renders digitalization and smart grid integration a compelling opportunity for the growth and advancement of the microgrid market share.
Challenges: Complexities in standardizing the scalability of microgrids
Scalability and standardization represent notable hurdles in the expansion of the microgrid market. Achieving scalability entails ensuring that microgrid solutions can be efficiently implemented across various applications, sectors, and geographic regions. Each deployment may exhibit distinct requirements and attributes, necessitating customized approaches while preserving interoperability and compatibility. Consequently, consistent standards must be developed to govern the design and implementation of microgrid systems. Standardization facilitates the integration of diverse components and technologies, streamlining interoperability and diminishing integration expenses. Additionally, embracing modular design methodologies permits flexibility and adaptability, allowing microgrid systems to be easily adjusted in scale based on evolving demands. The implementation of best practices is instrumental in fostering standardization and ensuring the consistent performance and reliability of microgrid solutions. Through the establishment of clear guidelines and widespread adoption of these best practices, the industry can surmount scalability and standardization challenges, facilitating the broad deployment and integration of microgrid solutions across diverse applications, sectors, and geographical locations.
Microgrid Market Ecosystem
The prominent players in the microgrid companies are Schneider Electric (France), Siemens (Germany), Eaton (Ireland), General Electric (US), ABB (Switzerland), Hitachi Energy Ltd. (Switzerland), Honeywell International Inc. (US), Homer Energy (US), S&C Electric Company (US), Power Analytics Global Corporation (US). These companies not only boast a comprehensive product portfolio but also have a strong geographic footprint.
Microgrid Market Segmentation
Grid-connected microgrid to lead the microgrid market during the forecast period.
Grid Connected microgrids benefit from access to the primary power grid, ensuring a backup in case of disruptions to the microgrid's internal power generation or distribution system. This inherent backup system renders them more dependable compared to off-grid microgrids, which lack connectivity to the main grid and must rely solely on their internal power infrastructure. Moreover, grid-connected microgrids typically entail lower installation and operational costs than their off-grid counterparts. This cost-effectiveness is attributed to their ability to leverage existing power grid infrastructure, thus reducing expenses associated with transmission lines and substations. Additionally, grid-connected microgrids contribute to enhancing the reliability of the main power grid, mitigating greenhouse gas emissions, and enhancing overall energy efficiency. These advantages have propelled the increased market dominance of grid-connected microgrids.
Hardware segment to account for the largest market share during the forecasting period.
The hardware components of microgrids encompass power generators, energy storage systems, and controllers. The hardware segment of the microgrid market is witnessing growth propelled by several factors. These include the proliferation of microgrid projects globally, the declining costs associated with energy storage, and increasing government initiatives aimed at promoting clean energy and reducing greenhouse gas emissions. Microgrids harness a range of energy sources, incorporating renewables like solar, wind, and photovoltaic cells, as well as non-renewables such as fuel cells, diesel generators, combined heat and power (CHP) systems, micro-CHP systems, and microturbines.
Commercial & Industrial Buildings end users to grow at the highest CAGR during the forecast period.
The commercial and industrial buildings microgrid market is anticipated to demonstrate the highest Compound Annual Growth Rate (CAGR) throughout the forecast period. This surge can be attributed to the imperative for a dependable power supply to ensure uninterrupted operations across various industries. Maintaining consistent power flow is essential to minimizing downtime, enhancing productivity, and averting equipment damage. Consequently, the commercial and industrial sectors are increasingly embracing microgrid solutions to fulfill their power requirements. Moreover, governmental initiatives aimed at incentivizing the adoption of clean energy and mitigating greenhouse gas (GHG) emissions are bolstering the expansion of the microgrid market within commercial and industrial settings. These initiatives provide incentives and assistance to enterprises for implementing sustainable energy solutions, including microgrids. By adopting clean energy alternatives, businesses can align with environmental objectives, adhere to regulatory requirements, and contribute to fostering a more sustainable future.
The 1 MW to 5 MW power segment is likely to dominate the microgrid market between 2024 and 2029.
In 2023, the 1 MW to 5 MW segment emerged as the dominant market shareholder. This segment encompasses microgrid systems primarily tailored for commercial and industrial applications. Additionally, it includes installations in hospital complexes, colleges, military bases, research institutions like the National Renewable Energy Laboratory (NREL), and remote regions such as Decatur Island in Washington, US, where there is a heightened power demand due to tourism.
Within this category, microgrid systems integrate a mix of renewable and non-renewable energy sources. However, the majority of installations in this range predominantly rely on non-combined heat and power (non-CHP) natural gas as their primary energy source. This indicates that these microgrid systems are primarily fueled by natural gas but also integrate intermittent renewable energy sources to complement their energy requirements. The commercial and industrial sector represents the primary end-user where microgrid systems with power ratings ranging from 1 MW to 5 MW are in demand.
Microgrid Industry Regional Analysis
Asia Pacific to grow at the highest CAGR during the forecast period.
Microgrid Market by Region
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The Asia-Pacific microgrid industry is poised for significant expansion in the forthcoming years, driven by various factors. These include the escalating demand for dependable and resilient power supply, the growing emphasis on renewable energy sources, the increasing implementation of smart grid technologies, and supportive governmental policies. The Asia-Pacific region encompasses numerous countries vulnerable to natural calamities such as typhoons and earthquakes, making the need for reliable power supply paramount. Microgrids offer a solution by ensuring uninterrupted power provision during disasters. Furthermore, the region stands out for its leadership in renewable energy adoption, wherein microgrids play a crucial role in integrating these sustainable energy sources into the grid, thereby enhancing its sustainability. Additionally, the rising adoption of smart grids in the region allows for efficient power flow management and seamless integration of renewable energy sources, including microgrids, through advanced communication capabilities. Governments across the Asia-Pacific region are actively fostering the development of microgrids, evident in the form of subsidies and tax incentives provided for microgrid projects.
Top Microgrid Companies - Key Market Players
- Schneider Electric (France),
- Siemens (Germany),
- General Electric (US),
- Eaton (US),
- ABB (Swtitzerland) are among the major players in the microgrid companies.
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Report Metric |
Details |
Estimated Market Size |
USD 13.6 billion |
Expected Market Size |
USD 17.0 billion |
Growth Rate |
CAGR of 4.6% |
Market Size Availability for Years |
2020–2029 |
Base Year |
2023 |
Forecast Period |
2024–2029 |
Forecast Units |
Value (USD Billion) |
Segments Covered |
By Connectivity, Offering, Type, Pattern, Power Source, Power Rating, End User, and Region |
Geographies Covered |
Americas, Europe, Asia Pacific, and Rest of the World |
Companies Covered |
The major players include Schneider Electric (France), General Electric (US), Siemens (Germany), Eaton (Ireland), ABB (Switzerland), Hitachi Energy Ltd. (Switzerland), Honeywell International Inc. (US), HOMER Energy (US), S&C Electric Company (US), Power Analytics Global Corporation (US) |
Microgrid Market Highlights
This research report categorizes the microgrid market share by connectivity, offering, type, patterns, power source, power rating, end-use, and region available at the regional and global level
Segment |
Subsegment |
Based on Connectivity: |
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Based on Offering: |
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Based on Power Source: |
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Based on Pattern: |
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Type of Microgrids: |
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Based on Power Rating: |
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Based on End Use: |
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Based on the Region: |
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Recent Developments
- In May 2023, Schneider Electric launched EcoStruxure Microgrid Flex, a pioneering standardized microgrid solution that revolutionizes project timelines, resulting in a higher return on investment.
- In April 2023, Schneider Electric launched Easy UPS 3-Phase Modular with a capacity ranging from 50 kW to 250 kW and an N+1 scalable configuration. It integrates with the EcoStruxure architecture, enabling remote monitoring services for enhanced performance monitoring and management.
- In February 2023, Siemens and Swinburne University of Technology partnered to expedite the energy transition and achieve net-zero objectives. The collaborative effort involves establishing an advanced Energy Transition Hub at Swinburne University's Hawthorn campus in Melbourne, Australia.
- In February 2023, Eaton was granted a contract to support AEP Ohio in bolstering the resilience and sustainability of crucial water infrastructure located in Columbus, specifically at the Tussing Water Booster Station. This initiative entails the creation of Columbus' inaugural renewable energy microgrid.
- In December 2022, Schneider Electric and ORPC, Inc. (US) signed a MoU to collaborate on microgrid projects to advance marine energy as a commercially viable renewable energy source. This will propagate the company’s smart microgrid controllers integrated with ORPC’s RivGen Power Systems to provide highly predictable baseload electricity in renewable energy form, enabling the global transition towards net-zero societies.
- In August 2022, Eaton, along with four other companies - Planair, Yverdon Energies, Smart Energy Link (SEL), and Virtual Global Trading (VGT), collaborated to work on SunnYparc Microgrid Project to construct a microgrid demonstrator, which has the capacity to supply electricity to local businesses and simultaneously charge up to 350 electric vehicles.
- In June 2022, Eaton and Microsoft extended their collaboration to accelerate the adoption of Eaton's EnergyAware uninterruptible power system (UPS) technology in key sectors worldwide.
Key Questions Addressed by the Report:
Who are the key players in the Microgrid market share? What are the major growth strategies they have taken to strengthen their position in the market?
Major players of microgrid market include Eaton (Ireland), Schneider Electric (France), General Electric (US), ABB (Switzerland) and Siemens (Germany). These companies offer a wide portfolio for microgrids with global presence acorss various countries to meet the requirements of customers. Strategies such as acquisitions, product launches, collaborations, agreements and contracts were adopted by these companies to withstand the competitive landscape of this market.
What are the new opportunities for emerging players in the microgrid value chain?
In the value chain of microgrids, established players have various new prospects to explore. These include opportunities such as the advancement of microgrid controllers, renewable energy storage systems, and smart microgrids that emphasize the integration of technology and data management. Additionally, they can pursue the creation of inventive hardware devices and software solutions specifically tailored for microgrids.
Which end-user of the microgrid market is expected to drive the market's growth in the next five years?
During the projected timeframe, the commercial and industrial buildings sector is anticipated to experience a more substantial expansion. This market segment's growth can be attributed to the persistent need for uninterrupted power supply in order to ensure seamless operations during industrial activities, reducing downtime, boosting productivity, and minimizing equipment damage. Furthermore, government initiatives aimed at promoting clean energy usage and reducing greenhouse gas emissions are also contributing to the growth of the microgrid market for commercial and industrial purposes.
Which region to offer lucrative growth for the microgrid market size by 2029?
During the projected period, it is anticipated that the Asia Pacific will take the lead in the microgrid market. Also, the Asia Pacific region is expected to experience the highest growth rate from 2024 to 2029.
Which offering of the microgrid market is expected to drive the market's growth in the next five years?
The software segment is expected to grow at a higher rate during the forecast period. The growth of this market segment can be attributed to the consistent requirement for remote monitoring of the microgrids.
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The study involved four major activities for estimating the microgrid market size. Exhaustive secondary research has been conducted to collect information relevant to the market, its peer markets, and its child market. Primary research has been undertaken to validate key findings, assumptions, and sizing with industry experts across the value chain of the microgrid market. Both top-down and bottom-up approaches have been employed to estimate the complete market size. It has been followed by the market breakdown and data triangulation methods to estimate the size of different segments and subsegments of the market.
Secondary Research
The research methodology used to estimate and forecast the size of the microgrid market began with the acquisition of data related to the revenues of key vendors in the market through secondary research. Various secondary sources have been referred to in the secondary research process for identifying and collecting information for this study. Secondary sources include annual reports, press releases, and investor presentations of companies; white papers, journals, certified publications, and articles by recognized authors; websites; directories; and databases. Secondary research has mainly been used to obtain key information about the supply chain of the microgrid market, the value chain of the market, key players, market classification, and segmentation according to the industry trends to the bottom-most level, geographic markets, and key developments from both market and technology-oriented perspectives. Secondary data has been collected and analyzed to determine the overall market size, further validated through primary research. The secondary research referred to for this research study involves the International Energy Association (IEA), Microgrid Knowledge, Solar Energy Industries Association (SEIA), Institute of Electrical and Electronics Engineers (IEEE) Smart Grid, and Clean Energy Council. Moreover, the study involved extensive use of secondary sources, directories, and databases, such as Hoovers, Bloomberg Businessweek, Factiva, and OneSource, to identify and collect valuable information for a technical, market-oriented, and commercial study of the microgrid market. Vendor offerings have been taken into consideration to determine market segmentation.
Primary Research
In the primary research, various primary sources from both the supply and demand sides have been interviewed to obtain the qualitative and quantitative information relevant to this report. Primary sources from the supply side include the key industry participants, subject-matter experts (SMEs), and C-level executives and consultants from various key companies and organizations in the microgrid ecosystem. After the complete market engineering (including calculations for the market statistics, the market breakdown, the market size estimations, the market forecasting, and the data triangulation), extensive primary research has been conducted to verify and validate the critical market numbers obtained. Extensive qualitative and quantitative analyses have been performed during the market engineering process to list key information/insights throughout the report. Extensive primary research has been conducted after understanding the microgrid market scenario through secondary research. Several primary interviews have been conducted with market experts from the demand and supply-side players across key regions, namely, the Americas, Europe, Asia Pacific, and the Rest of the World (Middle East & Africa). Various primary sources from both the supply and demand sides of the market have been interviewed to obtain qualitative and quantitative information. Following is the breakdown of the primary respondents.
Primary data has been collected through questionnaires, emails, and telephonic interviews. In the canvassing of primaries, various departments within organizations, such as sales, operations, and administration, were covered to provide a holistic viewpoint in our report. After interacting with industry experts, brief sessions were conducted with highly experienced independent consultants to reinforce the findings from our primaries. This and the in-house subject matter experts’ opinions have led us to the findings described in the remainder of this report.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
The total size of the microgrid market has been estimated and validated using both top-down and bottom-up approaches. Furthermore, these methods have also been used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size is as follows:
- Identifying different entities influencing the value chain of the microgrid market
- Identifying major companies, system integrators, and service providers operating in the market
- Estimating the size of the microgrid market for each region based on demand for microgrids
- Tracking the ongoing and upcoming microgrid projects to forecast the market size based on these developments and other critical parameters
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
- Qualitative aspects such as market drivers, restraints, opportunities, and challenges have been taken into consideration while calculating and forecasting the market size.
Global Microgrid Market Size: Bottom-Up Approach
Global Microgrid Market Size: Top-down Approach
Data Triangulation
After arriving at the overall size of the microgrid market from the market size estimation process explained above, the total market has been split into several segments and subsegments. Data triangulation and market breakdown procedures have been employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments of the market. The data has been triangulated by studying various factors and trends from both the demand and supply sides. Along with this, the market size has been validated using both top-down and bottom-up approaches.
Market Definition
A microgrid is a self-sufficient energy system that serves a discrete geographic footprint, such as college campuses, hospital complexes, business centers, or neighborhoods. It acts as a single controllable entity for energy generation with respect to a grid. A microgrid can be connected to or disconnected from the main grid to enable it to operate in either grid-connected or off-grid-connected (island) mode. It can be used as a backup or supplementary power source for the main grid when there is an increased demand for electricity. A microgrid comprises one or more kinds of distributed energy hardware (solar panels, wind turbines, controllers, generators) that help produce power. Microgrids are used by end users such as commercial & industrial buildings, institutes & campuses, military facilities, government buildings, healthcare facilities, remote areas, and utilities.
Stakeholders:
- Raw material suppliers and microgrid developers
- Distribution network service providers
- Power-generating companies, retailers, and consultants
- Industrial and commercial end users
- Government agencies such as energy regulators and policymakers
- Energy producers
- Electric utilities
- End-use verticals utilizing microgrid services such as commercial & industrial buildings, military facilities, remote areas, institutes & campuses, and healthcare facilities
- Consultants for ensuring energy efficiency and sustainability
- Research organizations
- Technology standard organizations, forums, alliances, and associations
- Venture capitalists, private equity firms, and startups
Report Objectives
- To define, describe, segment, and forecast the size of the microgrid market by connectivity, offering, and end-user in terms of value
- To describe the various types, patterns, power sources, and power ratings of microgrids
- To describe and forecast the market for four main regions, namely, the Americas, Asia Pacific, Europe, and Rest of the World, in terms of value
- To provide detailed information regarding the drivers, restraints, opportunities, and challenges influencing the growth of the market
- To provide a detailed overview of the value chain of the microgrid ecosystem
- To strategically analyze micro-markets with respect to individual growth trends, prospects, and their contributions to the overall market
- To strategically analyze the ecosystem, Porter’s five forces, regulations, region-wise regulations, upcoming technologies in the market, revenue shift model in the market, patent landscape, trade landscape, and case studies pertaining to the market under study
- To analyze opportunities in the market for the stakeholders by identifying high-growth segments in the market
- To strategically profile key players and provide details of the current competitive landscape
- To analyze strategic approaches adopted by players in the microgrid market, such as product launches and developments, acquisitions, collaborations, agreements, contracts, expansions, and partnerships
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report:
Company Information:
- Detailed analysis and profiling of additional market players based on various blocks of the value chain.
Growth opportunities and latent adjacency in Microgrid Market
Looking to get an idea of the market share of MicroGrid controllers in the U.S. including depoyment costs.
Decentralization of energy generation is one of the important trends these days, could you share the list of ongoing and upcoming microgrid projects in Asia Pacific and the Middle East regions? Also, could you share specific information about the regulations and policies across the regions for energy saving?
I am looking for technological mix and trends - Economies of scale - Major players - Geographies likely to adapt Microgrids -Developers - Policies and regulatory support - Funding and financial viability. Can you provide this information?
Can I get an India-only cut of this report? Does it have market size projections by value chain component (e.g., building microgrids, operating and maintaining microgrids), by type (connected to main grid vs. disconnected) and sector? If so, please advise best price ASAP - I am looking to sort this out in the next 2 hours.
I am interested in commercial aspects in the US and UK only. And, would like to see information by total US and by region within the US. Is that possible? Can just the 2 countries be purchased? and if so at what cost?
We are a componment/system supplier in this market and getting this down to a unit level is helpful. I see that there is a $7m figure for a 2MW microgrid system. Should I simply divide by that? It also shows ABB with 30 projects per year. Do you have similar data to that for other companies?