It's Not Just Data Centers Driving the Train: Microgrid Future is Wide Open, Tough and on Track to Survive

“While data centers are often spotlighted as the primary driver of future load growth, their impact is concentrated in specific regions and a relatively small number of sites,” Gerber said. “The real ‘best-kept secret’ for microgrid opportunity lies in the vast and largely untapped commercial and industrial (C&I) building sector.

“Why? The C&I sector is massive,” she added, citing federal Energy Information Administration statistics. “There are nearly six million commercial buildings in the U.S. alone, consuming 6.8 quadrillion British thermal units and spending $141 billion on energy annually.”

Indeed, the C&I sector is distributed, diverse and located everywhere, Gerber noted. These opportunities could lead to thousands of microgrids, some off-grid and many interconnected at the edge of the grid.

New Sun Road’s Pierce, whose company also engages in microgrid building globally, recognizes vast change in the energy sector: grid interconnection delays, distribution capacity limitations, long supply chain lead times and, of course, the rise of the tariffs and the potential end of renewable energy incentives in the U.S.

These factors are huge and potentially deciding factors for C&I and mission-critical customers seeking energy resiliency and sustainability. And it may not just be AI and hyperscalers calling.

“We anticipate businesses that need productive power will seek power solutions that offer autonomy, resilience and cost control,” Pierce said. “Ironically, over the next few years it will be oil, gas and mining that are growth areas and likely candidates for microgrids.

“Additionally, opportunities will present in regions where the grid is constrained and there is growth. If data centers are the elephant demanding power and prioritization, then other businesses and communities will be looking for independent options,” she added.

Microgrids are expensive. What, pray tell, is the value proposition for customers?

You cannot hide from the bottom line. Microgrids are very expensive to build and maintain, so the value argument is critical in underlining and then proving the benefits of long-term energy cost reduction, reduced emissions, energy security from outages and, increasingly, grid services.

“The future of microgrids is being shaped by innovations that go beyond just financing models,” Gerber replied, noting work that Schneider Electric and partners are doing to create more standardization and modularity around microgrids.

The hope is that this voluntary standardization will cut down on interconnection and regulatory delays often adding up to several years. Microgrids are intended to deal with sudden changes in energy supply, so they must be adaptable and more easily deployed.

“Designing new infrastructure with a ‘Microgrid Ready’ approach (integrating microgrid capabilities during electrical distribution manufacturing) makes it far more cost-effective to add microgrids from the outset, rather than retrofitting later,” Gerber said. “For existing facilities, EaaS (Energy as a Service) and performance contracts allow organizations to upgrade without upfront capital, paying instead from the savings and value generated by the microgrid.”

Due to the imposing upfront costs of microgrids, many system developers lean toward EaaS as the best way to bring customers onboard, with the developer tackling all of the upfront design, development, construction and operational costs, while the C&I customer pays their part in what are essentially contracted energy bills.

The attraction of EaaS is true for customers, while developers must make them pencil out in both energy cost reduction but contracted in a way to create a return on investment for both sides of the microgrid deal.

New Sun Road’s Pierce also contends that the industry needs a framework design and “credible planned performance” to make the sizable investments attractive on all ends.

“This is where operations and energy management play a key role,” she said. “We need to provide data and analysis like KWh Analytics did for renewable energy to unlock financing for microgrid market growth. There is a lot of data available, but it is widely dispersed and microgrids need to be categorized so that data can be organized and analyzed. Reference baseline designs and case studies would go a long way to help.”

So customers want predictability. OK, why can’t the government give us that, too?

The political pendulum is in full swing in the U.S. Four years of Biden initiatives create the Infrastructure and Inflation Reduction Acts, both of which rewarded renewable energy and grid upgrade projects with tax credits and other incentives.

The Trump Administration is sweeping much of that away through its budget law and executive order process. Just this past month, one federal regulatory branch under President Trump granted more time for a liquified natural gas export project to revolve its trade-making options, but another agency shut down work on an offshore wind project that was 80% complete and previously approved by the same agency.

The pendulum is nothing new, especially in the 21^st century, but it’s now rolling like a battle axe against renewables and propulsion for traditional power such as natural gas and nuclear.

How does the microgrid sector survive? Well, because although it sounds like a new thing, microgrids have been around for a long time and for quite compelling reasons. We need all the energy and the means to move it that we can get. Data centers, AI and re-industrialization will require it.

“To electrify our infrastructure, we need to triple our power generation capacity,” Pierce pointed out. “Microgrids provide rapidly deployable, local power. This is of significant advantage to the smaller, more flexible data centers.

“Microgrids will survive because they are inherently local and flexible,” the New Sun Road CEO said.

How do microgrids move ahead? Because they must

Indeed, independent forecasting resources such as GM Insights are anticipating strong growth in grid-connected microgrids, as much as 18% per year. Even the Trump and Republican-led One Big Beautiful Bill Act (OBBBA) offered targeted support for microgrid-enabling technologies despite sun-setting many renewable and hydrogen production credit programs.

“Microgrids are uniquely resilient to policy swings because their value proposition goes beyond just renewable generation; they deliver grid independence, resilience and operational flexibility—benefits that remain critical regardless of the political climate,” noted Gerber of Schneider Electric. “The preserved and expanded incentives under OBBBA, combined with growing private sector investment and the need for reliable, resilient power, create a stable foundation for microgrid growth even as broader energy policy shifts.”

Microgrid planners don’t have genies granting wishes, but what they build offers blessedly predictable energy supply and costs for all manner of co-located customers, whether they be commercial real estate, manufacturing plants, residential neighborhoods, military bases and, yes, AI-enabled data centers.

So if the know-it-all genie tells you he can predict the future, run away. But if reasoned planning can include some sense of predictability, which is something we all want, then the industry will be a vital part of the energy future.

“As long as there is demand for energy reliability and cost control, and as long as microgrid technologies remain eligible for targeted incentives, microgrids can not only weather the policy pendulum but thrive, serving as a strategic hedge for organizations navigating an uncertain energy future,” Gerber said.

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