What Trends are Driving Growth for the Microgrid Market?

John Hostetter, Sr. Engineering & Technology Development Lead, Ameresco

John Hostetter: The microgrid market is evolving and growing rapidly. Many governmental organizations are investigating the viability of microgrids to enable continuation of service during an emergency or power outage. Businesses are starting to see the value in avoiding lost productivity due to down time, and prices are going down while availability of equipment and knowledge in the industry is going up. The global health crisis brought on by COVID-19 has introduced a heightened awareness around the importance of healthy, safe, and resilient working environments. Many are keeping this front of mind as they implement re-opening strategies across the world. The consideration of microgrid and demand controls at this time could integrate on-site generation that adapts to facility usage in order to match demand rates and variable occupancy due to stay at home or work from home orders. 

Are there particular geographic regions that are exhibiting changes of note?

JH: The western United States, especially California, is seeing a large uptick in interest and viability of microgrids. With public safety power shutoffs and updates to the California Self Generation Incentive program (enabling certain facilities to receive a higher incentive rate with the installation of distributed energy resources on the customer’s side of the utility meter), microgrids are more viable and more affordable than ever.  

What sectors have become the most active and what is their motivation for pursuing microgrids?

JH: Several sectors have become active in pursing microgrids. The Federal Government set the stage for microgrid adoption — we’ve seen this in projects such as the Marine Corps Recruit Depot at Parris Island, Portsmouth Naval Shipyard, and the Joint Base San Antonio. Higher Educational campuses, K12, and Municipalities — such as McKinleyville, California — follow their lead. We’re also seeing a wealth of C&I customers consider energy resiliency needs as a top of mind priority in their operational reliability strategy to ensure critical operations can stay online in areas affected by unreliable grid sources and/or severe weather events. These sectors are evaluating the use of microgrids and how they fit into larger energy strategies, especially when thinking about being able to serve as shelters or provide services to their communities during a power outage. 

Have you seen any evolution in microgrid pricing or technology over the last year?

JH: Yes, regarding the evolution of both pricing and technologies. Costs are in decline as the availability and reliability of equipment continues to rise.  In parallel, technology continues to advance with the inclusion of more sophisticated control systems, more readily available equipment such as smart switch gear, and more cost-effective energy storage modes — we have seen tremendous growth, all to improve project design to meet a customer’s specific requirements.   

Has Ameresco positioned itself differently or re-framed its strategy as a result of changes in the market over the last year?

JH: Ameresco remains nimble and has been able to expand our portfolio along with the market to meet our customers’ needs, while keeping an independent mindset. We have evolved our position as a market leader in the energy services space to include a broader bench of expertise across our portfolio of solutions — including distributed energy resources, microgrids, and storage — as part of our standard offering. We continue to incorporate the most advanced technologies into our comprehensive solutions, first supporting customers with efficiency improvements followed by generation and management of the energy load that is needed. The COVID-19 pandemic has renewed our sense of how important energy resiliency is for building owners and occupants, and how energy efficient upgrades and microgrid and demand controls can be a part of the conversation.