As the Trump Administration begins eliminating federal funding for microgrid and other distributed energy resources (DER), municipalities, tribes, schools and developers are seeking state and local funding, while at the same time reducing their projects’ costs.
In spite of the funding cuts, microgrids are seen as critical resources for achieving energy resilience to cope with climate-change induced storms and wildfires. Municipalities especially want backup power for critical services such as schools, libraries, community centers, cooling centers, emergency response efforts and police stations.
Municipal governments seeking to deploy microgrids explore funding options
“When it comes to microgrids, we’re getting a lot of requests to produce feasibility studies, specifically in the municipal space,” said Marc Starkey, program manager at Schneider Electric North America’s sustainability business.
About a third to one half of the municipalities that approach Schneider Electric in California are looking to include microgrids in their projects, he said. The company is also seeing demand from military bases, counties and school districts.
Organizations interested in microgrids aren’t necessarily putting projects on hold in response to the Trump administration’s cuts to clean energy funding. They’re taking time to explore all state and local opportunities, he said. They include bond funding and state programs.
Stacking funding options in wildfire-prone California
In California, stackable funding opportunities include low-interest loans from the California Energy Commission, the state’s self-generation incentive program (SGIP) and the Community Energy Reliability and Resilience Investment Program, Starkey said.
Schneider Electric has some opportunities with school districts in California that are seeking to avoid wildfire-related outages, he said.
These school districts plan to use bond funds approved by local taxpayers to invest in microgrids to keep schools open so they can provide daily instruction and receive federal funding that’s based on their average daily attendance, Starkey said.
Projects funded by state clean energy, green bank dollars
Numerous state programs are helping fund microgrids, said Lesley Jantarasami, vice president of research & industry strategy at the Smart Electric Power Alliance.
Some examples:
- The Snohomish Tribe of Indians’ project to deploy a 31-kW solar and storage microgrid and a separate 55-kW solar and storage system received $1.75 million from the Washington State Department of Commerce’s Clean Energy Fund. The project aims to reduce energy costs and create more affordable housing by adding renewable energy to the state’s grid.
- A naval submarine base microgrid-ready project received $8 million in debt financing from the Connecticut Green Bank.
- The Steil Club Electrification and Microgrid Project received a $1.28 million grant from the Michigan Public Service Commission’s Renewable Energy and Electrification Infrastructure Enhancement and Development grant program.
New England funding programs
In addition to the Connecticut Green Bank’s program, funding is also coming from New England states that want to move forward on climate progress, said Sean Burke, director of policy, BlueWave, which develops renewable energy projects.
New England funding programs include:
- New York State Energy Research and Development Authority’s Retail Storage Incentive Program, which offers incentives for grid-connected residential and commercial customers to install either standalone energy storage or systems paired with a new or existing on-site renewable generation system.
- Connecticut Energy Storage Solutions program, which provides incentives to reduce the cost of deploying energy storage for homes, businesses and contractors.
- Massachusetts Clean Peak Standard, which offers incentives for deploying clean energy technologies that can supply electricity or reduce demand during seasonal peak demand periods.
DER industry members are also keeping an eye on New York State’s ASAP Act, which aims to accelerate the use of solar.
Lowering costs with flexible interconnection
Along with taking advantage of such incentive and grant programs, developers are looking to reduce the costs of clean energy projects.
For example, Massachusetts and New York have flexible interconnection programs that allow clean energy developers to speed the interconnection process by agreeing to reduce demand when the utility system is stressed. This gives utilities more control. Customers agree to curtail their load under certain circumstances in exchange for a less expensive, faster connection.
“Interconnection remains challenging and often expensive and can be one of the deciding factors of whether a project reaches the finish line,” Burke said.
Grant-free models that are sustainable and scalable
While some developers are cutting costs and looking for state and local grants, microgrid developer Enchanted Rock doesn’t rely on grant funding.
“Grants can support early innovation, but true resiliency at scale requires a model that is sustainable and repeatable,” said Allan Schurr, chief commercial officer at the company.
Enchanted Rock has deployed more than 385 microgrids, including a 30-MW system at Houston’s Northeast Water Purification Plant, a 2.4- MW system at Marine Corps Base Quantico and 12 MW of power systems supporting levee improvement across Fort Bend, Texas. Recently, the company’s microgrids covered more than 165 hours of power outages across Texas, Schurr said.
While federal funding is disappearing for microgrid and DER projects, these technologies are needed more than ever, SEPA’s Jantarasami said.
“Across the country, microgrids are helping communities—from tribal nations to military installations—strengthen resilience, reduce energy burdens and integrate clean energy into the grid,” Jantarasami said. “These projects, many supported by state and local funding, demonstrate the practical and equitable value of distributed energy solutions.”
