44% of Businesses Considering Microgrids: Survey

July 17, 2020
In a new report by Deloitte, 44% of businesses who responded to a national survey said they are considering microgrids, an increase of nine percentage points over last year’s survey.

In a new report by Deloitte, 44% of businesses who responded to a national survey said they are considering microgrids, an increase of nine percentage points over last year’s survey.

In “Deloitte Resources 2020 Study,” 54% of those considering microgrids said they have critical operations that require uninterrupted power supply, said Marlene Motyka, principal, Deloitte Transactions and Business Analytics. Fifty-one percent said they have experienced increases in the number of outages.

The study did not pin down where the survey participants were experiencing outages. Major storms, fires and Public Safety Power Shutoffs in California are among the possible reasons, she said.

“They know they have to be resilient and more self sufficient,” she said.

Concern about resilience driving microgrids

Resilience was on the top of both residential and business customers’ interest list.

Fifty-two percent of business respondents said they’re concerned about an interruption to their electricity supply due to a cybersecurity event on the electric grid. And 37% of residential consumer respondents echoed this concern.

Residential customers showed that they know where to find resilience. More than half of these customers said they were interested in solar if combined with batteries.

“They see that if they have solar plus a battery, they can save and shore up resilience. Nearly half of residential respondents expressed a concern about outages from natural disasters or storms,” Motyka said.

Conducted in February, the study is based on more than 1,500 online interviews with residential utility customers and 600 online interviews with businesses located nationally that employ more than 250 people. The study documented increases in consumer and business concern about climate change, as well as an uptick in pressure on businesses from their customers to take action on climate change.

Uptick in use of on-site power among businesses

Along with increased interest in microgrids and solar plus storage, respondents showed an uptick in the use of on-site generation, said Motyka. Sixty percent of businesses said they have on-site generation, which is up 40 percentage points from the first Deloitte survey 10 years ago — a huge increase, Motyka noted.

When asked why they self generate, businesses said it provides resilience, price certainty, energy supply diversification and cost savings. Of the self generators, 15% use cogeneration and 13% employ renewables, the report found.

Climate change was also on the minds of residential respondents. Eighty percent of those surveyed said they believe corporate America has a responsibility to address climate change. This was the first time the survey posed that question.

Renewable energy got a big thumbs up from respondents. Sixty-five percent of residential customers said renewable development will boost the national economy. Three-quarters of business respondents said customers want them to acquire renewable energy, said Motyka.

The study suggested that the interest in renewable energy may be in part due to the COVID-19 crisis because renewables help lower energy costs.

“What we’re seeing is the fact that renewables basically have no marginal cost, so when utilities and others are focused on generating revenue but reducing cost, we see renewables are being dispatched first and generating electricity in the market and doing a great job beating coal,” said Motyka. “We also see a lot of demand for renewables from businesses and consumers.”

Fifty-one percent of businesses surveyed said they are working to acquire more electricity from renewables. That’s up from 40% in 2019. They’re acquiring the clean energy through power purchase agreements (PPA) and virtual PPAs. Virtual PPAs are purely contractual and do not require that the business takes the power physically. The business may, therefore, contract with a plant located across the country.

However, non-utility solar installations are dropping due to the pandemic, she said.

The US Energy Information Administration’s 2020 forecast predicted a 29% drop in non-utility solar in 2020. That’s in part because solar salespeople generally haven’t been able to meet in person with potential customers.

Survey signals support for climate action

In the survey, respondents signalled clearly that they want action on climate change — with millennials leading the pack.

Sixty-eight percent of residential customers said they’re concerned about climate change, but for millennials, the percentage was 81%.

And 80% of residential respondents said they strongly agree corporate America has to address climate change.

Meanwhile, responding to a new question, six out of ten businesses said they feel increased pressure from stakeholders to address climate risks.

Stop&Shop is among the businesses using microgrids. Photo courtesy of Bloom Energy

“Right on top are employees and board members and their customers,” said Motyka.

Overall, the survey pointed to business and residential customers’ growing awareness of the need for resilience and renewable energy. And the COVID-19 crisis may have increased this awareness — and the need to take action.

“In sum, while the world has changed drastically within a matter of weeks, many of the long-term, core sentiments and motivations for energy and resource management revealed in the resources study have not. In fact, the current crisis may have strengthened them further,” said the report.

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About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

Twitter: @LisaECohn

Linkedin: LisaEllenCohn

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