Microgrids: $40 billion global market by 2020

Centralized power grids are becoming less reliable. That means a growing market for microgrids.

In the wake of powerful storms like Hurricane Sandy knocking out electricity for millions and events like India's massive blackout last year, the world is increasingly looking to microgrids to provide more reliable electricity.

A new report from Navigant Research says that the microgrid market will rise from nearly $10 billion in estimated revenue this year to $40 billion by 2020.

"At this point in time, microgrids can provide a quality and diversity of services that incumbent utilities have been unable to match," said Peter Asmus, principal research analyst for Navigant Research, in a statement. "While utilities have shown institutional biases against the entire concept of microgrids for decades, extreme weather events and the growing recognition of microgrids as potential sources of demand response resources are building engineering and cultural support for these systems in a variety of settings."

The report says that microgrids are "moving into full-scale commercialization" thanks in part to successful pilot programs, falling prices for solar photovoltaic systems, and fewer regulations against distributed energy.

So where's the best market for microgrids? North America and, more specifically, the United States. "Pockets of poor power quality scattered throughout the United States and the structure of behind-the-meter markets for distributed energy resources," according to the report, are the main factors leading the growing U.S. microgrid market.

Photo: Flickr/USACE HQ

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