A microgrid is an autonomous, neighborhood-based energy system that supplies a particular area, such as a medical facility, college campus, or commercial district. It doesn't require the assistance of a centralized grid to function autonomously. Government initiatives to reduce carbon footprint and increase demand for dependable and secure power supply in commercial and industrial sectors around the world are expected to fuel the microgrid market's expansion. The market is also anticipated to grow quickly across various end-user segments, including commercial, government, industrial, and healthcare, due to software designed to manage and control distributed energy resources with load forecasting and integrated weather. Future market growth is anticipated to be fueled by elements like the expansion of smart cities, rising demand, expansion of rugged lot, and rising use of ruggedized P.C.s.
COVID-19 IMPACT
The COVID-19 pandemic has had an effect on society and the global economy. The supply chain is being increasingly negatively impacted by this outbreak every day. This has led to increased customer panic, slowing the supply chain, decreased business confidence, and uncertainty in the stock market. The closure of manufacturing facilities in the area has severely affected the business and revenue in lockdown-affected European nations. The COVID-19 outbreak significantly impacted the production and manufacturing processes, which prevented the microgrid market from expanding as quickly in 2020. The COVID-19 pandemic has significantly impacted global manufacturing and industrial industry, as production facilities have stalled, leading to a significant increase in demand in industries, according to microgrid market trends.
DRIVING FACTORS
Microgrid Adoption Is Supported By The Ongoing Need For Electricity In The Medical And Defense Industries
By disrupting power supplies, increasing power outages in urban and rural areas might seriously harm several locations, including hospitals and military bases. Just a few things hospitals need to run are lighting, heating, and cooling systems, as well as power for ventilators, dialysis machines, oxygen monitoring devices, and other life support systems. In a hospital, when operations are ongoing round-the-clock, and any power outage could endanger a patient's life, a reliable electrical supply becomes a critical requirement. Consequently, a microgrid can provide the hospital with power during a power outage in an emergency. As a result, this aspect is having a favorable effect on the market. Additionally, because it can operate independently of the grid, it offers the best backup power supply, enhancing military bases' physical and digital security. Because they were created with national security in mind, these factors further stimulate the global market.
RESTRAINING FACTORS
Issues with Operating Microgrids in Island Mode on a Technical Level to Limit Market Growth
A sudden intake of current can impact the frequency and voltages of power systems during the beginning stages of electricity generation in microgrids running in the island mode. Generators may trip. As a result, cutting them off. For this, it is necessary to examine the electrical generation techniques utilised in microgrids that run in the island mode. In addition, it is necessary to have specialized controls to guarantee efficient microgrid operations. Multiple distributed electrical generation sources are used in island microgrids. Voltages must be managed during microgrid operations utilising controllers for voltage versus reactive power drop to provide local reliability and stability of power systems. Operating microgrids in the island mode is difficult and requires sufficient technical expertise.
SEGMENTATION
By Connectivity

Based on connectivity, the microgrid market is segmented into grid-connected and off-grid connected. The grid-connected category dominated the market in 2021. It is anticipated to have a significant impact as smart micro-grid-connected P.V. systems become more popular due to their ability to supply power to consumers by lowering transmission losses. North Power Systems has been using technology that combines its wind turbines with solar P.V., diesel gen-sets, or other microgrid power sources over the past few years.
By Type
By type, the market is segmented into A.C. microgrids, D.C. microgrids, and hybrid microgrids. The A.C. microgrids category dominated the market in 2021 because of the network's effective high-end voltage levels throughout, lower transmission losses, and minimal heat generation. It also doesn't need inverters to deliver power, driving the industry's dynamics. It is also very compatible with grid networks. Additionally, the business environment will benefit from expanding high-voltage A.C. power networks and large solar and wind farms connected to A.C. transmission lines.
By End User
By end user, the market is segmented into commercial and industrial, government, healthcare, remote, utility, and others. The commercial and industrial categories dominated the market in 2021. This market segment's expansion can be attributed to the ongoing need for uninterruptible power supplies to maintain smooth operations during industrial operations, decrease downtime, boost productivity, and minimize equipment damage. Government programs to encourage the use of clean energy and lower greenhouse gas (GHG) emissions are also a major factor in the microgrid market growth for commercial and industrial end-users.
REGIONAL INSIGHTS

North America is projected to hold the largest share of the microgrid market over the forecast period. Government-beneficial policies, such as tax breaks and other promotional initiatives, drive the region's growth. The segment is anticipated to grow due to increased investments in research and development to create cutting-edge technologies. Additionally, the government's expanding efforts to lessen reliance on conventional power generation systems will increase demand for the microgrid industry.
On the other hand, the Asia Pacific microgrid market is anticipated to grow significantly over the forecast period because traditional power systems are becoming more innovative and developed to achieve an effective supply of electricity. Additionally, the region's adoption of microgrid technology has increased due to the growing demand for clean energy sources. The demand for microgrids in the regions is anticipated to rise as government initiatives to provide a reliable, affordable electricity supply in rural areas of developing economies increase.
LIST OF KEY COMPANIES PROFILED:
- ABB Group
- EATON CORPORATION
- EXELON CORPORATION
- GENERAL ELECTRIC
- HONEYWELL
- PARETO ENERGY
- Schneider Electric
- SIEMENS, SPIRAE INC.
- S&C ELECTRIC
KEY INDUSTRY DEVELOPMENTS:
- May 2022: With the acquisition of Tangent Energy Solutions, an energy provider of energy as a service (EaaS), Caterpillar can now collaborate directly with utilities and energy suppliers to deliver distributed energy resources. The DERMS platform Tangent energy uses a proprietary software solution that tracks, manages, and makes money off onsite energy assets, such as microgrids, natural gas, and renewable energy generation.
- October 2021: For the microgrid powering a gold mine in the Democratic Republic of the Congo, global equipment manufacturer Caterpillar provided hybrid energy solutions technology, including 7.5MW of battery storage. The project has received approval from regional Caterpillar distributor Tartaric on behalf of client Barrick Gold Corporation. The new grid-stabilizing machinery lessens the need for spinning reserve at the location, resulting in an annual reduction in diesel consumption of about 3 million liters and a reduction in carbon dioxide emissions.
Attributes | Details |
Study Period | 2016-2028 |
Base Year | 2021 |
Estimated Year | 2022 |
Forecast Period | 2022-2028 |
Historical Period | 2016-2020 |
Unit | Revenue (USD Million) and Volume (Kilo Tons) |
Segmentation | By Connectivity, By Type, By End User and By Geography |
By Connectivity |
|
By Type |
|
By End User |
|
By Region |
|