DER Developers Choosing Multi-Asset Microgrids, Often Off-Grid: Survey

Research by software company Xendee released last year showed that distributed energy resource (DER)  developers will save money–compared to utility power–if they choose a phased, multi-year approach that begins with off-grid microgrids.

By starting out with this strategy, developers can avoid interconnection delays, add new technologies as they’re developed and possibly connect to the grid when grid power is available, Adib Nasle, co-founder and CEO at Xendee, a microgrid design software company, said at the Great Transformation conference in Bend, Ore.

Survey finds that developers begin off-grid and may add grid power later

Now, an October/November 2025 market survey of more than 150 distributed energy and microgrid professionals conducted by Energy Changemakers, Factor This Renewables and Xendee found that, in the face of federal funding cutbacks, interconnection delays and other challenges, developers are indeed turning to microgrids. They often begin off-grid to circumvent interconnection slowdowns and are also adding a number of different technologies, including solar, storage,  combined heat and power (CHP), natural gas generators, fuel cells, wind, biogas, absorption chillers and hydrogen electrolyzers.

“Data validates that microgrids have become less expensive to implement and run than upgrading and running grid transmission assets,” said Trent Maw, marketing director at Xendee.

The capital costs for microgrids and energy cells average $3.62 million per MW of installed capacity. By comparison, the capital costs of grid and power plant expansion average $3.9 million per installed capacity or transmission capacity, according to a LinkedIn post by Michael Stadler, chief technology officer at Xendee.

This means that it’s more attractive for venture capital funds and other funding sources to step up and make up for the federal incentives rolled back by the Trump administration, Maw added.

Complex microgrids capture additional revenue streams

The survey found that more complex microgrids offer more opportunities for developers.

“Developers focused on multi-DER microgrids are far more likely to have projects under development than those pursuing simpler, one- or two-technology systems. The ability to coordinate multiple assets, capture additional revenue streams and optimize across operating scenarios is increasingly what makes projects viable,” the report said.

For example, if microgrid operators see that high demand periods are coming in the next few days, and if they overlay that information with different technologies in a microgrid, there’s more complexity, but if the microgrid is run well, there’s more opportunity to reap savings, Maw said.

In Xendee’s platform, the company uses AI to analyze complex datasets and predict and adjust in real time to help deploy multiple technologies in a microgrid, choosing which technologies provide the most benefits at any given period of time, he added.

Absorption chillers and CHP are among the technologies that can give microgrid performance a boost. Traditional, simple microgrids generally include solar and storage. When there’s both electrical and thermal loads, additional electricity is often used to cool a commercial or industrial campus. By integrating CHP and absorption chillers, developers make use of the heat that’s produced and transform that into cooling, which creates efficiency.

Survey respondents want to move ahead with projects despite funding losses

Interestingly, even though the survey respondents identified federal policy changes as a challenge in 2026, and even though two-thirds said state grants and incentives aren’t enough to offset this loss, 70% to 75% of those surveyed don’t see funding as a top challenge, possibly demonstrating that they’re depending less on the federal government, the survey said. And respondents said they’re moving forward with projects that aim to meet the challenges of long interconnection queues, data center demand and extreme weather.

“The survey respondents said that they recognize there's a loss of federal funding and states aren't making up the difference, at least not fully.  But they’re still determined to move these projects forward,” Maw said.

For example, data centers aren’t waiting for interconnection, he said. They’re moving as fast as they can, deploying assets that can generate electricity, store it and provide resilience.

Microgrids make more sense than waiting for grid interconnection

Of the DER developers willing to wait for interconnection, 80% withdraw from the queue in response to interconnection delays or loss of funding, Maw said.

Instead of waiting to interconnect, multi-assset microgrids make more sense, the survey found.

“For organizations to continue to exist in an era of slimmer margins, they must manage complexity with sophisticated modeling approaches and tools as well as integrated control strategies so that projects meet financial requirements to move forward at every stage,” the survey said.

Meanwhile, a Bloom Energy 2026 Data Center Power Report found that one-third of data centers expect to be fully off-grid by 2030.

In addition, they’re locating in regions that have available power and aren’t necessarily planning on adding grid power.

“Capital is concentrating in power-advantaged regions, longstanding assumptions about grid delivery timelines are being challenged, and onsite generation is increasingly being incorporated into long-term power strategies rather than treated as a temporary bridge,” said the report.

Whether they’re a temporary strategy or an off-grid option, microgrids are proving that they can help meet the growing need for electricity, often with clean energy.

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