Bs and Cs: Think Microgrid's State Scorecard Indicates Projects Growing, but Grades Policy Making as Slow So Far
Microgrid project development is accelerating by double-digit percentage points on an annual basis—proving the energy market understands that decentralization can actually bolster grid-level power delivery for mission critical customers.
Developers, energy technology firms and end users are making the grade in uniting resiliency with sustainability. When it comes to state-level policy making, however, the efforts are falling short of helping microgrids realize their full potential as a key asset at the intersection of resiliency and sustainability.
Advocacy group Think Microgrid’s second annual State Scorecard somewhat echoes its first report released in late 2023—only a few of the good students (i.e., states) out there are proactive in moving microgrids forward. But even among the lagging states, microgrid enthusiasts are encouraged by the success of individual test cases, while seeing plenty of room for improvement going forward.
Think Microgrid's 2023 State Scorecard
Once again, Think Microgrid’s study does not give a single “A” grade to any state for its microgrid policy making. Same as last year’s inaugural scorecard, only four states merited “B” marks, but one former member of that class dropped into the “C average” level.
This time around, it’s four states and a territory earning B-level plaudits from the Think Microgrid team. They are Connecticut, Maine, Colorado, Puerto Rico and Texas, which will be host to the Microgrid Knowledge Conference this April in Dallas. Maine is the newcomer to the B team for 2024 while Hawaii dropped to a C.
Research partner firm Wood Mackenzie has calculated that overall U.S. microgrid operational capacity surpassed 9 GW across more than 5,000 installed projects by the third quarter this year. The industry is growing by an annual estimated rate of 26%, but the states are not doing what’s necessary to remake the grid in a more distributed fashion.
“While some states receive an “A” for activity in specific categories, there is no state where an “A” is warranted,” the Think Microgrid summary reads. “This reflects the continued status of the current microgrid policy landscape: states have taken innovative actions, but barriers still inhibit advancement toward commercialization. The level of deployment is nowhere close to establishing microgrids as the building blocks of an electric grid where DERs represent a ubiquitous resource for grid operations.”
Golden state not as golden in 2024
Meanwhile, the state with the largest overall deployment of microgrids, California, fell to a lowly D. The Golden State was not alone but ranked among more than 30 that were judged as close to failing in microgrid-positive policies.
Think Microgrid based its rankings on research into microgrid policy activity since the 2023 scorecard, including legislation, regulatory decisions and planning efforts as well as engagement with regulators, policymakers and industry stakeholders.
“Hawaii and California were downgraded because, despite earlier success and momentum, those states have either stalled or restricted their efforts at scaling up microgrids,” group Executive Director Cameron Brooks said in an email with Microgrid Knowledge.
Given that Think Microgrid's scorecard has yet to grade any states as A-worthy in its two years of existence, the question begs as to what would it take to earn the top mark? Well, the scorecard itself spells out the answer.
To earn an A, the states must be "leading proactive, urgent action to pursue long-term reform of existing barriers across regulatory, legislative and financial dimensions. State actions support robust and diverse microgrid deployment; microgrids are leveraged as a meaningful solution for the operational needs of the state electric grid and the fundamental architecture of the grid supports robust contributions from distributed energy resources and microgrids."
Brooks breaks it down on a deeper level, given all the interconnection and jurisdictional challenges that distributed energy resources currently face.
“I would say that deployment remains one of the key challenges, in that no state has yet achieved a level of microgrid deployment that would be considered a ‘meaningful solution for the operational needs of the state electric grid,’” he said, partially quoting from the first report. “While there are many examples of microgrid offering a invaluable resilience solutions and benefits to individual customers, we have some distance to go before microgrids and distributed energy are integrated into the overall operation of the electric grid. Beyond that, we are looking to see states that are tackling some of the biggest barriers (such as for multi-customer microgrids) rather than pilot programs.”
The Wood Mackenzie data shows that microgrids are making clear headway to the top of the distributed energy resource class. What’s lacking, from the Think Microgrid perspective, is real, sustained commitment to microgrid momentum within each of the states.
In fact, Cole Triedman, Think Microgrid’s policy director, argued that the state scorecard offers more encouragement than indictment nationwide.
“It is certainly an indictment against state policy but not necessarily markets writ large,” Triedman told Microgrid Knowledge. “The Wood Mac data paints an industry steadily growing and diversifying, which we expect to continue.
“We hope to frame states as having an opportunity to proactively remove barriers to microgrid integration,” he added.
C-graded states welcoming notable microgrid projects in the past year include Alaska, North Carolina, Louisiana and Minnesota, among others.
Click here to see the full Think Microgrid 2024 State Scorecard report.
