Microgrid Market Growth Opportunities, Trends & Forecast 2035

Global Microgrid Market Key Insights

During the forecast period of 2023-2035, the global microgrid market is expected to reach an estimated value of ~USD 250 billion by 2035 by expanding at a CAGR of ~13%. The market further generated revenue of ~USD 65 billion in the year 2022. Renewable energy is the major source for the working of microgrids. Therefore, major key factors propelling the growth of the microgrid market worldwide are the increasing demand for electricity all across the world and the rising use of renewable energy for the production of electricity.

Market Definition of Microgrid

A microgrid is an energy system that provides power to hospitals, colleges, offices, households, and others. Microgrid act as bridges between dispersed energy resources and load under well-defined boundaries. It is a self-sustained system, which can operate independently without a centralized grid, it is not connected to the main grid and is also known as an electrical island. The major driving force of microgrid systems is renewable energy. Therefore, it also enables the reduction of greenhouse gas emissions. Microgrids offer various advantages, such as the amalgamation of smart grid technologies, grid modernization, and reduction of energy loss during transmission and distribution.

Global Microgrid Market: Growth Drivers

The growth of the global microgrid market can majorly be attributed to the growing demand for electricity in the world followed by the higher contribution of renewable energy for the generation of electricity. The demand for electricity grew by 5% in 2021 and around 4% in 2022. This growth is driven by the post-covid recovery of the global economy. Furthermore, need for renewable energy, such as hydropower, wind, and solar power firmly sprouted by around 8% and 6% in the year 2021 and 2022, respectively. Furthermore, the share of renewable energy for electricity generation was approximately 28% between 2020 and 2021. On the other hand, the market growth can also be attributed to several constructional activities being carried out across the world. The building of residential property increased by 1% in 2020 compared to the previous year, while commercial construction increased by 2%.

The global microgrid market is also estimated to grow majorly on account of the following:

• Rising Demand for Electricity Worldwide
• Growing Share of Renewable Energy for Electricity Generation
• Rising Constructional Activities
• Rapid Penetration of Urbanization
• Government Efforts to Reduce Carbon Footprint

Global Microgrid Market: Restraining Factor

The application site of microgrids, such as defense equipment, and ruggedized computers are of high cost. Moreover, there are various technical issues occurred during operating microgrids. Hence this factor is expected to be the major hindrance for the growth of the global microgrid market during the forecast period.

Global Microgrid Market Segmentation 

• By Connectivity (Grid Connected, and Off Grid Connected)
• By Offering (Hardware, and Software & Services)
• By Application (Institutional Sites, Commercial Facilities, Remote Off-Grid Communities, and Others)

The remote off grid communities segment, amongst all the other segments, is anticipated to garner the largest revenue by the end of 2035. The growth of the segment can be attributed to the remote areas that do not have microgrids or are using a solar panel for powering the households. The area without microgrids represents a population density of more than 100 people per square km. it is expected that in developing nations, around 80 million people is to have microgrid access by 2040.

• By Region

The North America microgrid market is anticipated to hold the largest market share by the end of 2035 among the market in all the other regions. Soaring demand for electricity and rising use of solar panels in the region is attributed to the growing market size in North America. By the end of the third quarter of 2020, the U.S. had installed enough solar panels to power around 16 million homes. Moreover, the typical household solar system in the United States has 5KW, or about 20 panels. Furthermore, in 2021, the United States consumed more than 4 trillion kWh of electricity, which is 13 times more than it did in 1950. Moreover, the amount of power used directly by the industrial and commercial sectors totaled roughly 0.14 trillion kWh, or about 3% of the total amount used. The retail sector accounted for 97% of the total electricity used.

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The market research report on global microgrid also includes the market size, market revenue, Y-o-Y growth, and key player analysis applicable for the market in North America (U.S., and Canada), Latin America (Brazil, Mexico, Argentina, Rest of Latin America), Asia-Pacific (China, India, Japan, South Korea, Singapore, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia-Pacific), Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, NORDIC (Finland, Sweden, Norway, Denmark), Ireland, Switzerland, Austria, Poland, Turkey, Russia, Rest of Europe), and Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa).

Key Market Players Featured in the Global Microgrid Market

Some of the key players of the global microgrid market are Siemens AG, Eaton Corporation Inc., Schneider Electric SE, General Electric Company, Honeywell International Inc., ABB, Ltd., S&C Electric Company, Power Analytics Corporation, Exelon Corporation, HOMER Energy LLC, and others.