Last year brought the highest number of microgrid installations on record in the US, surpassing 500 systems, according to a Wood Mackenzie report released today.
The “US microgrid Forecast H1 2020” also notes a shift in the type of projects being developed. New microgrids tend to be more modular — a trend advocated by the industry for years to make development quicker and less expensive.
New microgrids also tend to be smaller, with most of the systems below 5 MW, said the report. The smaller size appears to account for the fact that while the number of microgrid installations was up, total capacity is down 7% over 2018.
The smaller size of projects is in keeping with anecdotal reports from developers who have told Microgrid Knowledge that they are seeing an uptick in businesses pursuing microgrids. This contrasts to the early days of development when universities, the military and government tended to dominate with larger more complex systems.
The trend a follows an uptick in interest among businesses noted in another recent report. That one, by Deloitte, found that 44% of businesses who responded to a national survey are considering microgrids, an increase of nine percentage points over last year’s survey.
The WoodMac report found 546 microgrids installed in the US last year, with solar plus storage systems leading in type for advanced microgrids.
The majority of microgrids installed came from companies and organizations that specialize in smaller units: PowerSecure, Enchanted Rock, and the Red Cross and Blue Planet Energy, a team installing microgrids in Puerto Rico.
Other key players, such as Ameresco, did not top the list for number of microgrids installed because they build fewer, but more sophisticated microgrids, according to the report. Often these are larger campus microgrids that are tailored to the customers’ needs and integrate a range of various distributed energy resources.
While the number of US microgrid projects reached a record high in 2019, it appears to be lagging, so far, in 2020, with project starts at the lowest point since 2016. WoodMac attributed the slowdown to the shelter-in-place orders and social distancing that have delayed permitting, engineering, construction and interconnection.
Because of the Carnovirus-related lag, WoodMac revised its two-year growth forecast downward.
The report also found that fossil fuel generation continues to dominate, accounting for over 80% of installed microgrid capacity in 2019.
Green future for microgrid installations
“Although most of the power distributed via microgrids came from fossil fuel generation last year, we believe that microgrids in the US will become increasingly reliant on renewables technologies. Through our five-year forecast we are optimistic that solar, wind, hydropower and energy storage will grow to account for 35% of annually installed capacity by 2025,” said Isaac Maze-Rothstein, WoodMac research analyst and report author.
The full report is available for a fee here.