The global microgrid market size was valued at USD 28 billion in 2020 and is expected to reach USD 46 billion by 2028, expanding at a CAGR of 10% during the forecast period, 2021–2028.
The growth of the market is attributed to the rising demand for sustainable energy, increasing incidences of cyberattacks on energy systems, increasing demand for a dependable and secure global power supply, and expanding global deployment of microgrids for rural electrification are all driving market expansion.
A microgrid is a small set of synchronized electrical sources and loads that are connected to the main power system. In island mode, the microgrid can be separated from the main grid and run independently. Microgrids, otherwise known as small-scale power grids, can be used in associated with a wide variety of renewable energy sources such as solar, wind, and waste-to-energy.
Furthermore, batteries or solar panels can be used to power them. Microgrids connected to the main power source provide a more stable source of electricity since they minimize the impacts of the power grid on localized disasters. Power demand has decreased dramatically as a result of the lockdowns imposed due to Covid-19 in several countries, as most industrial and commercial operations have paused.
Market Trends, Drivers, Restraints, and Opportunities
- High installation costs and the lack of regulatory frameworks for microgrid operations are estimated to hamper the market expansion.
- Microgrids offer a range of green power generation technologies that are becoming more preferred around the world as individuals become more conscious of clean energy is estimated to spur market growth in the coming years.
- During the forecast period, government initiatives, planned projects, and private investment are expected to propel the global microgrid market.
- Microgrids are anticipated to produce environmental and environmental benefits through the use of automation as dispersed energy resources are introduced into the power system, offering the profitable potential for the market to create immense opportunities for the market players.
- Possessing high rates of rural electrification, which provides an opportunity for the microgrid industry to expand.
Scope of Microgrid Market Report
The report on the global microgrid market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.
Microgrid Market - Global Industry Analysis, Growth, Share, Size, Trends, and Forecast
Types (Grid-connected, Hybrid, and Remote Grid), Power Sources (Natural Gas, Solar PV, Combined Heat & Power (CHP), Fuel Cells, and Diesel), Offerings (Hardware and Software & Services), and Applications (Healthcare, Defense, Educational Institutes, Industrial, Commercials, Remote, and Others)
Asia Pacific, North America, Latin America, Europe, and Middle East & Africa
Company Share, Market Analysis and Size, Competitive Landscape, Growth Factors, and Trends, and Revenue Forecast
Key Players Covered in the Report
Toshiba Corp.; Standard Microgrid Inc.; Siemens AG; Schneider Electric SE; S&C Electric Co., Honeywell International Inc.; Hitachi Ltd; General Electric Company; ENGIE EPS SA; and Eaton Corporation PLC
Global Microgrid Market Segment Insights
Grid-connected segment is projected to hold a large market share
Based on types, the global microgrid market is divided into grid-connected, hybrid, and remote grid. The grid-connected segment is expected to hold a key share of the market during the forecast period owing to the expansion of utility-based grid networks, as well as the widespread usage of renewable energy sources like offshore wind.
Grid-connected microgrids provide enhanced grid resiliency and power quality. They have a low environmental effect, which drives demand for clean energy.
Natural gas segment is expected to grow at a significant pace
On the basis of power sources, the market is segmented into natural gas, solar PV, combined heat & power (CHP), fuel cells, and diesel. The natural gas segment is expected to account for a key share of the market in the coming years due to natural gas is the most common energy generation source used by microgrids since it emits fewer carbon emissions than oil or coal-fired electricity.
Software segment is projected to account for a key market share
In terms of offerings, the global microgrid market is bifurcated into hardware and software & services. The software segment is expected to constitute a key share of the market during the forecast period owing to the software solution is aimed at campuses, institutions, infrastructures, and utilities that require advanced monitoring, administration, and optimization of distributed energy at a low cost without having to manage and maintain on-site IT equipment. Microgrid software as a service is a microgrid control system that is hosted remotely.
Remote segment is anticipated to register at a rapid CAGR
Based on applications, the market is segregated into healthcare, defense, educational institutes, industrials, commercials, remote, and others. The remote segment is expected to represent a key share of the market in the coming years due to the rising adoption of microgrids in remote places. Governments across the world are progressively investing in the expansion of power infrastructure to deliver low-cost and clean electricity.
As a consequence, the need for microgrids in rural places has increased. Microgrids are power plants that are set up in remote places to create, manage, and control distributed energy resources, allowing for resource optimization.
North America is anticipated to dominate the market
On the basis of regions, the global microgrid market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America is anticipated to dominate the market at an impressive CAGR during the forecast period. The regional market growth can be attributed to the explosive growth of microgrids in the defense sector, as well as remote networks to boost cyber-attack protection.
The global microgrid market has been segmented on the basis of
- Remote Grid
- Natural Gas
- Solar PV
- Combined Heat & Power (CHP)
- Fuel Cells
- Software & Services
- Educational Institutes
- Asia Pacific
- North America
- Latin America
- Middle East & Africa
- Toshiba Corp.
- Standard Microgrid Inc.
- Siemens AG
- Schneider Electric SE
- S&C Electric Co.
- Honeywell International Inc.
- Hitachi Ltd
- General Electric Company
- ENGIE EPS SA
- Eaton Corporation PLC
Key players competing in the global microgrid market include Toshiba Corp.; Standard Microgrid Inc.; Siemens AG; Schneider Electric SE; S&C Electric Co., Honeywell International Inc.; Hitachi Ltd; General Electric Company; ENGIE EPS SA; and Eaton Corporation PLC.
Some of these players are adopting several business strategies including acquisitions, mergers, collaborations, partnerships, capacity expansion, and product launches to increase their market shares.