Standardizing Microgrids to Boost Their Bankability

May 21, 2019
Standardizing microgrids can expedite development cycles and cut costs while simplifying projects, making them more appealing to financiers. That’s according to a new Microgrid Knowledge white paper that explores microgrid financing.

Even as the market grows, developers struggle to obtain microgrid financing. Why? What are the obstacles? And how can project developers overcome them? The Microgrid Knowledge white paper, “How to Get Your Microgrid Projects Financed,” explores these issues through interviews with prominent developers, financiers and other sources. Below is an excerpt that focuses on the potential of standardizing microgrids. 

Download the full report.

Financing a microgrid is difficult if developers use a number of different vendors and technologies, as is common. 

An integrated and standardized solution like Scale Microgrid Solutions’ (SMS) expedites the development cycles and cuts costs while simplifying microgrids, making them more appealing to financiers. 

The standard SMS system is a behind-the-meter modular microgrid system that utilizes solar photovoltaics, lithium ion battery storage and natural gas generation. These assets are operated by a microgrid control platform, co-developed with Schneider Electric, that allows customers to optimize the economic, operational and environmental benefits of distributed energy resources. 

Bowery Farming contracted with SMS to build a solar, energy storage and natural gas microgrid to help the facility reduce costs, increase resiliency and improve the sustainability of operations.

With this standard microgrid design, the company is able to reduce design and construction costs. SMS aims to build microgrids that are 30% cheaper than “piecemeal” or non-standardized solutions. 

Standardizing microgrids can also help overcome regulatory obstacles, such as those associated with interconnecting to utilities—often a big hurdle to developers. 

Ryan Goodman, CEO and co-founder, Scale Microgrid Solutions

“We have experience with a lot of these utilities; we can more accurately predict problems. More broadly, our whole philosophy is to manage all the parallel paths that you have to go down,” says Ryan Goodman, CEO and co-founder, Scale Microgrid Solutions.

While financing has historically slowed microgrid development, standardizing microgrids simplifies the product and helps financiers know what to expect. 

SMS’s goal is to provide one integrated product nd process. By managing all of the parallel paths (technological, regulatory, financial), SMS reduces risk and inefficiencies. 

An example of a project by SMS is the Bowery Microgrid. Bowery Farming, recently named one of Fast Company’s 50 most innovative companies, has constructed the world’s most technologically advanced vertical farm in New Jersey. Bowery Farming contracted with SMS to build a solar, energy storage and natural gas microgrid to help the facility reduce costs, increase resiliency and improve the sustainability of operations. 

The microgrid system will operate both in parallel to the grid and in ‘island-mode’ during grid outages. It will be able to provide demand response and other ancillary services to the grid. 

“The solution is very modular and the overall system uses the same building blocks that we use in every one of our installations, from the hardware to the software to the contracts,” says Goodman. 

With this model, Scale Microgrid Solutions hopes to help integrate decentralized solutions into the centralized grid, yielding sustainability, resiliency and cost benefits. 

Moving the market with better tools for seeking financing 

Microgrid developers have encountered challenges finding financing, in spite of the fact that new financing models are becoming available. The developers struggle conveying these complicated projects to financiers because they often lack experience working with financiers and don’t know the language financiers speak. In addition, lack of standardization makes financing difficult. However, by preparing information related to a project’s risks and rewards and focusing on the financier’s needs, microgrid developers will be better equipped to attract financing. 

This Microgrid Knowledge special report series on microgrid financing also covered the following topics in previous weeks. 

Download the full whitepaper, How to Get Your Microgrid Projects Financed, free of charge, courtesy of Scale Microgrid Solutions.

About the Author

Microgrid Knowledge Editors

Related Content

Brandon Olafsson / Shutterstock.com

Department of Energy Spending Up to $200M Connecting Remote Microgrids

March 15, 2024
The U.S. Department of Energy is currently accepting proposals for transmission projects that would connect remote and isolated microgrids to each other or to existing transmission...
U.S. Army photo by Scott Darling, Fort Cavazos Public Affairs)

U.S. Army Improves Resilience at Fort Cavazos with New Microgrid

March 14, 2024
U.S. Army Garrison-Fort Cavazos, formerly known as Fort Hood, will use the microgrid to power critical services and infrastructure during outages and to reduce energy costs during...

Reducing Costs and Uncertainty in Microgrid Deployment By Employing An Integrated Solution

March 15, 2024
This white paper - the second in a series - explores the Model Predictive Controller (MPC) approach to Microgrid and EV infrastructure operation.

Malaysian Semiconductor Maker Secures Critical Power with Rolls-Royce mtu Powerpacks On-Site

March 13, 2024
X-FAB Sarawak, the Malaysian division of worldwide foundry group X-FAB, will utilize the four mtu Kinetic Powerpacks at its site in Kuching, Sarawak, Malaysia. The company manufactures...

Only through Standardization Can Microgrids Accelerate the Energy Transition

Jan. 18, 2024
Jana Gerber, North America microgrid president at Schneider Electric discusses how standardizing microgrids will accelerate the energy transition.

Clean Energy Microgrids_cover
Clean Energy Microgrids_cover
Clean Energy Microgrids_cover
Clean Energy Microgrids_cover
Clean Energy Microgrids_cover

Staying the Course on Clean Energy in a Time of Societal Disruption

Concern is growing that an economic downturn could stifle progress on clean energy. How can clean energy microgrids help society stay the course through their use and management...