The global microgrids market will experience strong revenue growth, increasing from $8.85 billion in 2021 to $19.55 billion in 2030. North America and Asia-Pacific (APAC) will be the leading markets from 2021 to 2030. However, APAC will outpace North America and hold the highest share in the long term, focusing on remote microgrids. With largely secure grid infrastructure, the European Union has limited microgrid developments to a few pockets, such as physical island markets and rural markets in Eastern European countries that still suffer from grid reliability issues. The European market will account for 9.5% of the world market. Industrial, commercial/campus, and rural/island grids held the major global application segments. Commercial/campus grids are a significant application segment in North America, whereas rural/island grids have the highest growth in APAC.
The decarbonization of microgrids and the decreasing solar and storage costs have emphasized the hybridization and integration of multiple distributed generation sources (conventional diesel and gas), renewables, H2-based generation sources, and energy storage to optimize microgrid efficiency (a transition from fossil-based power generation). A growing demand has emerged for modular containerized solutions with photovoltaic (PV) inverters, batteries, power converters, and protection and control systems. These solutions are future proof for speedy installation and commissioning, rapid access to power in rural and remote locations, access to power using existing generators/weak grids, and expansion of grid projects. Multiple microgrids will be a part of the wider smart grid, increasing visibility within regional/national energy systems and resulting in virtual microgrids using peer-to-peer (P2P) energy trading.
Upfront capital investments, complex operations, and associated risks have led to a growing preference for OPEX-based business models. Vendors are using the Microgrid-as-a-Service (MaaS) business model in developed and developing regions. Offerings such as Outcome-as-a-Service, which entails operation and maintenance (O&M), financing and energy sustainability, and optimization, will be a success factor in the future. Business models will vary depending on application and geographic location, but a hybrid business model will represent the primary growth model. The market comprises many active participants, and more companies plan to enter this space. The leading companies offer turnkey solutions and as-a-service models.
Frost & Sullivan’s research service on global microgrids provides insights into the latest market developments. The study includes revenue forecasts at a global and regional level (2022–2030), driving and restraining forces, technology trends, application market forecasts, competitive analysis, and identification of growth opportunities. The regional analysis breaks the market into North America, Europe, Asia-Pacific, and Rest of World (ROW).
Key Issues Addressed
Author: Neha Tatikota