Global Grid Connected Microgrid Market Overview
As per MRFR analysis, the Grid Connected Microgrid Market Size was estimated at 9.18 (USD Billion) in 2022. The Grid Connected Microgrid Market Industry is expected to grow from 10.06 (USD Billion) in 2023 to 22.9 (USD Billion) by 2032. The Grid Connected Microgrid Market CAGR (growth rate) is expected to be around 9.57% during the forecast period (2024 - 2032).
Key Grid Connected Microgrid Market Trends Highlighted
The grid-connected microgrid market is driven by several key factors, including increased awareness of distributed energy resources, the need for improved grid resilience, and the growing adoption of renewable energy sources. Additionally, government incentives and regulatory policies contribute to the growth of the market. Opportunities in the grid-connected microgrid market lie in the development of new technologies and applications, as well as the expansion of existing markets. The increasing demand for reliable and resilient power supply, coupled with the rising penetration of renewable energy sources, is creating opportunities for grid-connected microgrids. Recent trends in the grid-connected microgrid market include the integration of advanced control systems, the development of new energy storage technologies, and the increasing use of microgrids for critical infrastructure applications. The trend towards distributed energy resources is also driving the growth of the market, as microgrids can be used to integrate renewable energy sources and provide backup power.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Grid Connected Microgrid Market Drivers
Growing Demand for Decentralized Energy Generation
A major driver of the Grid Connected Microgrid Market Industry is the increasing demand for decentralized energy generation. Microgrids are becoming increasingly popular as they offer a number of benefits over traditional centralized power systems, including increased reliability, resilience, and efficiency. As the world becomes more decentralized from an energy perspective, the demand for microgrids will grow. There are several factors that are contributing to the increasing demand for decentralized energy generation. One primary factor is the fact that traditional forms of energy are becoming more expensive. Over the past few years, the cost of oil and gas has continued to rise, making it relatively expensive to generate electricity from a central power station. In addition to this, consumers are also becoming increasingly aware of the fact that these sources of energy are having a negative impact on our planet. Microgrids offer a sustainable and renewable way of generating electricity, which is greatly appealing to both consumers and businesses. The Grid Connected Microgrid Market Industry is expected to be worth $50.61 billion by 2030. It is anticipated that this market will expand at a compound annual growth rate of 9.57% over the next decade.
Government Incentives for Microgrid Development
Another major driver of the Grid Connected Microgrid Market Industry is government incentives. Numerous governments are offering different types of financial incentives to businesses as well as communities that develop microgrids. Tax breaks, rebates, and grants are among the different types of government incentives. A few reasons necessitate the formation of government incentives. Thus, first, a microgrid can play a crucial role in improving the reliability and resilience of the electric grid. After a major storm, many places experience power outages, which take a long time for electricity to be restored. Businesses and communities that have microgrids are less affected by electric power outages since they can use the electricity generated by the microgrids. Another reason for the formation of a government incentive is the fact that a microgrid can be used to reduce the impact of electricity generation on the environment. That is because most vegetation used for generating electricity in microgrids is usually small, so it is not affected by storms, unlike big vegetation in major areas where electricity is generated. Additionally, power generation from microgrids is considered environmentally friendly. The microgrid can use renewable resources to generate electricity, hence reducing the amount of greenhouse gases produced.
Technological Advancements in Microgrid Technology
Technological advancements are also supporting the growth of the Grid Connected Microgrid Market Industry. Microgrid technology is changing from time to time, and with technological advancements, new technologies are heading out that provide more affordability and facilitate the development and operations of microgrids. For example, new power electronics devices are now being developed to help build more efficient and reliable microgrids. Moreover, new software tools are being developed to facilitate the management and control of the microgrids. In return, these technological advancements are making it more suitable for businesses and those living in the communities to develop microgrids.
Grid Connected Microgrid Market Segment Insights
Grid Connected Microgrid Market Energy Source Insights
The Grid Connected Microgrid Market is segmented by energy source. The energy sources are analyzed as solar, wind, hydropower, biogas. Solar or photovoltaic energy is the most popular energy source for grid-connected microgrids, and it is estimated to account for more than 50% of the market share in 2023. Furthermore, the solar energy market is anticipated to grow with the highest CAGR during the forecast period. The increase in the growth of this segment is supported by the decrease in the price of solar panels and the demand for clean and reliable sources of renewable energy. In addition, by energy source, winds are estimated to be the second main energy for grid-connected microgrids, with a market share of more than 25% in 2023. Moreover, the growth of the wind energy segment is driven by the increasing investment in wind farms and the advancements in wind turbines.
Hydropower is estimated to be the third most popular energy for grid connected microgrids; the market share is estimated to be more than 15% in 2023. Furthermore, the growth of the hydropower segment is driven by the demand for clean and reliable sources of energy. By energy source, biogas is the fourth most popular, with a market share of more than 10% in 2023. However, the growth of the biogas segment is driven by the supply of biogas from anaerobic digestion plants and the demand for renewable sources of energy. The Grid Connected Microgrid Market is expected to rise from $15.00 billion in 2024 to 38.45 billion by 2032 on a CAGR of 9.9%. The increase in the market is being supported by the rising demand for reliable and sustainable energy, increasing investment in renewable energy projects, and government policies to adopt microgrids. Market growth is further expected to be fueled by demand in developing countries, the innovation of advanced microgrid systems, and awareness of the advantages of microgrids.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Grid Connected Microgrid Market Microgrid Size Insights
The Grid Connected Microgrid Market is segmented by microgrid size into small-scale (up to 1 MW), medium-scale (1 MW - 10 MW), and large-scale (over 10 MW). The small-scale segment held the largest market share in 2023, and it is expected to continue to dominate the market over the forecast period. The medium-scale segment is expected to witness the highest growth rate over the forecast period. The growth of the small-scale segment is attributed to the increasing adoption of microgrids in remote areas and developing countries.
The medium-scale segment is expected to grow due to the rising demand for microgrids in commercial and industrial applications. The large-scale segment is expected to witness moderate growth due to the high cost of installation and maintenance. In 2023, the small-scale segment accounted for over 50% of the Grid Connected Microgrid Market revenue. The medium-scale segment is expected to reach a market size of over USD 7 billion by 2032. The large-scale segment is expected to account for over 20% of the Grid Connected Microgrid Market revenue by 2032.
Grid Connected Microgrid Market Application Insights
The Grid Connected Microgrid Market is segmented into various applications, including commercial, industrial, residential, and utility. In 2023, the commercial segment held the largest market share, accounting for approximately 40% of the global revenue. The industrial segment is projected to witness significant growth over the forecast period, owing to the increasing adoption of microgrids in manufacturing facilities and other industrial settings. The residential segment is expected to grow steadily, driven by the rising demand for reliable and resilient power supply in remote areas. The utility segment is also anticipated to contribute to the growth of the Grid Connected Microgrid Market, as utilities seek to integrate microgrids into their distribution networks to improve grid stability and reliability.
Grid Connected Microgrid Market Battery Technology Insights
The Battery Technology segment of the Grid Connected Microgrid Market is anticipated to witness substantial growth over the forecast period, owing to the increasing demand for cost-effective and reliable energy storage solutions. Lead-acid batteries, with their well-established technology and low cost, currently hold a significant share of the market. However, Lithium-ion batteries are gaining popularity due to their higher energy density, longer lifespan, and lower maintenance requirements. Flow batteries, known for their scalability and long-duration storage capabilities, are expected to emerge as a promising technology in the coming years. The Grid Connected Microgrid Market segmentation provides valuable data and insights into the market dynamics, enabling stakeholders to make informed decisions. The market growth is primarily driven by the rising adoption of renewable energy sources and the need for grid resilience.
Grid Connected Microgrid Market Regional Insights
The Grid Connected Microgrid Market is expected to reach a value of USD 14.5 Billion by 2026, exhibiting a CAGR of 10.2% during the forecast period. Regionally, North America is anticipated to dominate the market, accounting for a significant share of the Grid Connected Microgrid Market revenue in 2024. This dominance can be attributed to the presence of favorable government policies, increasing adoption of renewable energy sources, and growing demand for reliable and resilient power supply. Europe and APAC are also expected to witness substantial growth, owing to increasing investments in renewable energy and supportive government initiatives. South America and MEA are expected to contribute a smaller share to the Grid Connected Microgrid Market but are anticipated to grow at a steady pace due to rising energy demand and growing awareness about the benefits of microgrids.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Grid Connected Microgrid Market Key Players And Competitive Insights
Existing and emerging players in the Grid Connected Microgrid Market industry have been aiming to develop new technologies and enhance their product portfolios. In addition, several Grid Connected Microgrid Market companies have been adopting various strategies, such as mergers, acquisitions, and product developments, to enhance the competitiveness of their offerings in the market. Leading Grid Connected Microgrid Market players have been focusing on investment in R&D activities to introduce new products and solutions. Moreover, the increasing demand for energy power is a prime factor that has been driving the development of the Grid Connected Microgrid Market.
The competitive nature of the Grid Connected Microgrid Market landscape may remain fragmented over the next few years, and therefore, a number of key Grid Connected Microgrid Market companies are expected to exert a notable stronghold in the market. General ElectricGeneral Electric is a major player in the Grid Connected Microgrid Market. The company provides a wide range of solutions, such as distributed generation, energy storage, and control systems. General Electric has a notable presence both domestically and internationally and is well-placed to address the growing demand for microgrids. Schneider Electric is another notable Grid Connected Microgrid Market company. The firm offers an entire suite of microgrid offerings, such as power electronics, automation, and software.
The company has been focusing on R&D activities, and its innovation has been setting it apart from other leading market participants. ABB is another major player in the market. The company is widely known for its expertise in power and automation technologies. The firm offers diverse microgrid solutions, which include power electronics, storage, and controls. ABB has a strong presence in both established and emerging markets, making it a company to watch in the growing Grid Connected Microgrid Market.
Key Companies in the Grid Connected Microgrid Market Include
Grid-Connected Microgrid Market Industry Developments
The Grid Connected Microgrid Market is poised to witness significant growth over the coming years, driven by factors such as increasing demand for distributed energy resources and rising concerns over climate change. In 2023, the market was valued at USD 10.06 billion and is projected to reach USD 22.9 billion by 2032, exhibiting a CAGR of 9.57% during the forecast period. Key market developments include the rising adoption of renewable energy sources, technological advancements in microgrid controllers, and supportive government policies. Strategic partnerships and mergers and acquisitions are also shaping the competitive landscape. However, challenges related to grid integration and high upfront investment costs may hinder market growth to some extent.
Grid Connected Microgrid Market Segmentation Insights
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Grid Connected Microgrid Market Energy Source Outlook
- Solar
- Wind
- Hydropower
- Biogas
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Grid Connected Microgrid Market Control System Outlook
- Centralized
- Decentralized
- Hybrid
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Grid Connected Microgrid Market Microgrid Size Outlook
- Small-scale (up to 1 MW)
- Medium-scale (1 MW - 10 MW)
- Large-scale (over 10 MW)
-
Grid Connected Microgrid Market Application Outlook
- Commercial
- Industrial
- Residential
- Utility
-
Grid Connected Microgrid Market Battery Technology Outlook
- Lead-acid
- Lithium-ion
- Flow batteries
-
Grid Connected Microgrid Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
9.18 (USD Billion) |
| Market Size 2023 |
10.06 (USD Billion) |
| Market Size 2032 |
22.9 (USD Billion) |
| Compound Annual Growth Rate (CAGR) |
9.57% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Schneider Electric, ABB, GE, LG Electronics, Sungrow Power Supply, Huawei, Honeywell, Eaton, SMA Solar Technology, Siemens, SolarEdge, Enphase Energy, S Electric, Toshiba, Mitsubishi Electric |
| Segments Covered |
Energy Source, Control System, Microgrid Size, Application, Battery Technology, Regional |
| Key Market Opportunities |
Smart Grid Integration Microgrid Expansion in Remote Areas Green Energy Integration Government Incentives Reliability and Resilience |
| Key Market Dynamics |
Rising energy costs Increasing penetration of renewable energy sources Government incentives and regulations Technological advancements Growing emphasis on energy resilience |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Grid Connected Microgrid Market is expected to reach USD 22.9 billion by 2032, exhibiting a CAGR of 9.57% during the forecast period (2024-2032).
North America is expected to dominate the Grid Connected Microgrid Market throughout the forecast period due to increasing demand for reliable and sustainable energy sources in the region.
The key growth drivers of the Grid Connected Microgrid Market include rising concerns over grid resilience, increasing adoption of renewable energy sources, and government initiatives and incentives.
Major applications of Grid Connected Microgrids include remote communities, industrial facilities, commercial buildings, and military bases.
Key competitors in the Grid Connected Microgrid Market include Schneider Electric, Siemens AG, ABB, Eaton Corporation, and General Electric.
The Grid Connected Microgrid Market is expected to exhibit a CAGR of 9.57% during the forecast period (2024-2032).
Challenges faced by the Grid Connected Microgrid Market include high installation costs, lack of standardization, and intermittency of renewable energy sources.
Opportunities for growth in the Grid Connected Microgrid Market include increasing demand for distributed energy resources, technological advancements, and favorable government policies.
Key trends shaping the Grid Connected Microgrid Market include the integration of renewable energy sources, the development of smart grid technologies, and the increasing adoption of microgrids in developing countries.
The Grid Connected Microgrid Market is expected to be valued at USD 10.06 billion in 2023.
