"Actionable Insights to Fuel Your Growth"

Microgrid Market Size, Share & COVID-19 Impact Analysis, By Capacity (Less than 5 MW, 5 MW - 10 MW, 10 MW - 20 MW, 20 MW - 50 MW, and Above 50 MW), By Power Source (Diesel Generators, Natural Gas, Solar PV, CHP, and Others), By Application (Educational Institutes, Remote Areas, Military, Utility Distribution, Commercial & Industrial, and Others), and Regional Forecast, 2022-2029

Region : Global | Format: PDF | Report ID: FBI100406



Play Audio Listen to Audio Version

The global microgrid market size was valued at USD 7.76 billion in 2021 and is projected reach USD 23.49 billion by 2029 from USD 8.74 billion in 2022, exhibiting a CAGR of 15.2% during the forecast period. Based on our analysis, the global market exhibited a decline of 6.2% in 2020 as compared to 2019. The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels.

Some of the major factors contributing to the growth of the market include increasing emphasis on decarbonization by end-users and governments, increasing use of microgrids for rural electrification, and the need for a growing supply of reliable and uninterrupted power. Additionally, increasing cyber-attacks on energy infrastructure and government initiatives to encourage the development will drive the industry's growth in the near future.


COVID-19 Pandemic Slowed the Global Market Despite Growing Need for Resilience 

The considerable impact of COVID-19 observed on the microgrid market growth due to supply chain disruption of raw materials and hindrance in activities due to social distancing norms. Due to several other factors, such as lack of skilled professionals to operate the technology along with the shutdown of manufacturing units around the world, the market had registered a downfall in revenue.

Associations, such as the Solar Energy Industries Association (SEIA), Advanced Energy Economy (AEE), Institute for Local Self-Reliance (ILSR), and Alliance for Rural Electrification (ARE), are taking steps to put microgrid projects back on rails. The clean energy and microgrid development proposals by these associations came at a time when nearly 100,000 advanced energy workers in the U.S. are unemployed. However, proposals to bolster distributed power are emerging as the U.S. government formulates a stimulus package in response to COVID-19-induced unemployment.


Request a Free sample to learn more about this report.

Growing Requirement of Clean Energy is Promoting the Adoption of Smart Grids Initiatives

Future power grids must be flexible, accessible, reliable, and economically viable to achieve the goals of the smart grid initiative. With the rising initiatives in reducing greenhouse gas (GHG) emissions, research on various configurations or architectures of microgrid systems is gaining attention to control equipment malfunctioning. Additionally, growing environmental concerns and adopting renewable energy are creating a lucrative opportunity for the market.

This is happening alongside the increasing penetration of Renewable Energy Sources (RES) such as solar, wind, and other micro-sources. The growing demand for combined or hybrid integrated grid networks is expected to drive the hybrid microgrid network globally. The majority of installations are united with CHP systems, including other technologies such as solar PV and energy storage. CHP is most often used to supply baseload power and thermal energy for continuous microgrids.

Although there is a substantial amount of deliberate deployments for CHP-based microgrids, solar presently leads the way for deliberate capacity of microgrids. Most operational grids system are located in the Northeast, with a large portion also positioned in California, Hawaii, and Alaska.

Thunderstorms and unpredicted weather in Northeastern states similar to Massachusetts and New York have raised the demand for better-quality resistance devices to a power cut that microgrids provide. California anticipates more installations as the PUC answers to the new microgrid bill. Microgrids in Hawaii and Alaska are usually mandatory for islands and remote communities or off-grid. On the west coast, renewable energy policy has driven California microgrids.

Rising Government Initiative for Providing Reliable and Efficient Power Supply Spurs Product Demand

Microgrid technology is becoming increasingly cost-effective and provides a reliable and efficient power supply for various verticals. Governments have made investments in microgrids from different countries. For example, in June 2020, the Australian government supported 17 projects with over USD 19 million in grants under the first round of the Regional and Remote Communities Reliability Fund. In October 2019, the federal government launched Australia's USD 50 million funding program. Of this amount, USD 20 million in funding has been allocated for feasibility studies in the country. Such government initiatives are expected to provide growth opportunities for the market over the forecast period.


Continuous Demand for Electricity in Healthcare and Military Industry is Supporting the Adoption of Microgrids

Rising power outages in cities and rural areas may cause severe damage to several places such as hospitals and military areas by interrupting power supply. In hospitals, many things need electricity, such as lights, heating, and cooling, and electricity, for life support systems like dialysis and ventilators machines, oxygen monitoring meters, and others.

A secure electricity supply becomes an imperative necessity in the hospital, as they are in operation 24/7, and any power disturbance could put a patient's life in danger. Several hospitals are switching from diesel generators to microgrid-based power backups as they can combine and control various energy sources while monitoring and handling energy supply. As a result, in an emergency, a microgrid can supply the hospital with power during a power outage. Therefore, this factor is positively impacting the market.

Furthermore, due to its capability of functioning independently from the grid, it also provides ultimate backup power supply, enhancing the physical and cyber security of the military bases. Many projects are ongoing or operated at numerous Army bases, including Fort Hunter Liggett in California, the Redstone Arsenal in Alabama, and Fort Bragg in North Carolina. These factors further propel the global market as they are designed with national security in mind.

Government Initiative to Reduce Carbon Footprint and Reliable Power Supply is Promoting Utilization of Microgrids

Growing demand for consistent and protected power supply globally coupled with government initiatives to reduce carbon footprint taken to reduce carbon footprints is likely to propel the demand for energy storage systems. Several other factors, such as extensive industrialization, and the introduction of IoT in microgrid connectivity to manage and control distributed energy resources, have spurred the demand for the product. Utilities generally consider these systems as a primary block for a smart grid and focus on R&D as a severe focus area.

For instance, according to SmartGrid Consortium (NYS), the New York government has been implementing microgrids. Consequently, 20 projects were nominated from an extensive candidate list of New York. Detailed analysis of these projects is based on various parameters, including regulations, energy delivery, technology, and development.


Monumental Installation and High Costs of Maintenance are Hindering the Market

The initial cost of these system is significantly higher than that of conventional power grids, typically between 25% and 30%. The infrastructure costs include everything from deploying communication systems to installing smart meters and maintaining them. In addition, the installation of smart meters costs about 50% more than the installation of electricity meters. The Distributed Energy Resources (DERs) used in microgrids are also more expensive than those used in traditional power plants.

Building a new microgrid or transforming a current system into a hybrid system can cost around 10,000 or even hundreds of millions. The most expensive generation assets include batteries, solar photovoltaic collections, and combined heat and power systems. Additionally, a significant amount of capital is required for grid automation and control systems that can intelligently monitor and manage all components, controlling the microgrid power efficiently. These systems can store and convert energy and provide improved reliability and power quality over traditional grids, their costs are enormous. This factor is limiting the growth of the market.


By Capacity Analysis

Less Energy Cost of above 50 MW will Amplify Market Growth

Based on capacity, the market is segmented into less than 5 MW, 5 MW -10 MW, 10 MW- 20 MW, 20 MW -50 MW, and above 50 MW. The above 50 MW segment holds a dominant share of the market due to low electrification rate of grid connectivity compared to the other capacity segments. The components used in every system are the same irrespective of their capacity, for example, solar panel, charge controller, battery, which can absorb more charge and result in the long run.

The 10 MW- 20 MW and 20 MW -50 MW segments are also addressed as medium-scale capacity. The increasing need for enhanced technology for power generation and distribution has surged the demand for 10 MW- 20 MW and 20 MW -50 MW capacity segments. Another reason that increases the demand for medium-scale plants is the easy availability of components such as panels, inverters, and others.

By Power Source Analysis

Rising Application of CHP Bolstered the CHP Segment 

By power source, the market is segregated into diesel generators, natural gas, solar PV, CHP, and others. The CHP segment holds a dominant market share as it saves total energy costs for consumers.

Natural gas holds a significant market share due to its versatility and abundant characteristics which power microgrids with relatively less impact on the environment. Natural gas is available adequately and adaptable to many different functions, propelling the demand for CHP in the global market.

The energy storage system in a microgrid can operate in control mode but only a single power source is permitted when it is remotely operated. In other words, if links with the grid are cut-off, the grid can work under a single source when diesel generators are the most suitable option.

By Application Analysis

To know how our report can help streamline your business, Speak to Analyst

High Utilization in Educational Institute Will Lead to Domination of Segment 

Based on application, the market is segmented into educational institutes, remote areas, military, utility distribution, commercial & industrial, and others. A paradigm shift toward adopting safe and reliable power generation units and the continued adoption of innovative technologies to ensure a resilient power supply against grid instability surge the demand for microgrids in educational institutions.

Commercial and industrial industries comprise significant heating and cooling demands with good cost reduction opportunities and the potential to reduce emissions. They are usually large areas and may double up as emergency shelters during extreme events such as cyclones, forest fires, and earthquakes, which is expected to grow the market for commercial & industrial rapidly.


Asia Pacific Microgrid Market Size, 2021 (USD Billion)

To get more information on the regional analysis of this market, Request a Free sample

The global market has been analyzed across major regions, including North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa.

Currently, most of the world's microgrids are in Asia Pacific, with most of the capacity being in the People's Republic of China and Japan. There is a high demand for robust and continuous network connectivity to provide seamless support to large enterprises, facilitating the outlook for the Asia Pacific microgrid market share. The regional government's initiatives have driven the construction of innovative yet dependable telecom infrastructure, which is impacting the market. International Data Corporation (IDC) states that spending on Asia Pacific telecommunications and pay-TV services jumped from USD 494 billion in 2020 to USD 505 billion last year. Asia Pacific spending has also increased, reaching USD 1,566 billion in 2021, up by 1.6% yearly.

In the European market, microgrids play a vital role in the electricity ecosystem of the future, with decarbonization, digitalization, decentralization, and non-wires solutions being its key attributes. It helps transform industries from all sectors, increasing production capacities; this increases the dependence on the continuous power supply to keep the system running. A few seconds of a power outage can interrupt industrial processes and cause significant economic loss. Microgrids also relate to the transportation sector, which consumes over 30% of primary energy. Electrifying only a small percentage of this would translate to significant capacity in the coming years.

North America is likely to maintain its significant hold in the global market due to the availability of reliable, stable, and affordable power. Rising attention to technological advancement by key manufacturers, scaling up existing infrastructure with advanced systems, and increasing demand for a stable and secure global power supply are some factors attributable to the market growth.

The Latin American market has gained momentum in recent years. Advanced technologies such as IoT, Big Data, and AI are increasingly deployed in the region. The introduction of the cloud is also accelerating rapidly in this area. In addition to setting up microgrids and local power generation, the operators are procuring redundant power infrastructure.

In the Middle East & Africa, increasing investment in the commercial sector with several ambitious government visions in the region, such as Saudi Vision 2030, Turkey Vision 2023, and South Africa Vision 2030, would drive significant development activities to advance power demand backup solutions


ABB and Eaton Lead with Wide Product Profile and Established Brand Name to Capture Market

The market has several players focused on providing microgrids. Market players are developing various technological advancements, with the adoption of AI platforms and leveraging solar energy and battery storage to support the facility. The majority of market players focus on these technologies. A growing commodity and energy market will create profitable opportunities for mining companies as the mining industry expands.


  • ABB (Switzerland)

  • Eaton Corp (Ireland)

  • Honeywell (U.S.)

  • Schneider Electric (France)

  • Siemens (Germany)

  • Spirae, LLC (Colorado)

  • Power Analytics Corporation (U.S.)

  • Toshiba Corporation (Japan)

  • GE (U.S.)

  • HOMER Energy (Colorado)

  • S&C Electric (Chicago)

  • Caterpillar (U.S.)


  • May 2022, Caterpillar purchased Tangent Energy Solutions, an energy-as-a-service (EaaS) company that enables Caterpillar to work directly with utilities and energy providers to deliver distributed energy resources. Tangent Energy's proprietary software solution is a DERMS platform that monitors, manages, and monetizes onsite energy assets, including natural gas and renewable energy generation, storage, and microgrids.

  • October 2021, Global equipment manufacturer Caterpillar supplied hybrid energy solutions technology, including 7.5MW of battery storage, to the microgrid running a gold mine in the Democratic Republic of the Congo. Regional Caterpillar distributor Tartaric has approved the project for customer Barrick Gold Corporation. The new grid stabilizing equipment reduces the need for spinning reserve at the site, decreasing diesel consumption annually by around 3 million liters and reducing carbon dioxide emissions.

  • November 2021, GE Digital and Florida Power & Light Company (FPL) announced the opening of the new cutting-edge Microgrid Control Lab at the University of Central Florida. The lab will work as a state-of-the-art research facility and control room for engineering faculty and students. FPL and GE Digital are co-sponsoring the lab at UCF, which will feature control center equipment and software that students will use to simulate and test real-life grid control operations and find ways to optimize and keep the future grid secure. Innovative research space to help America’s future engineers learn about critical issues and opportunities facing energy companies to ensure grid stability and reliability.

  • August 2021, Toshiba Energy Systems & Solutions to Supply Microgrid Energy Management System for Preparing Outer Islands for Sustainable Energy Development (POISED) on Hithadhoo Island in Addu Atoll, Maldives. The contract was won to install controller and energy management system in a 10 MW hybrid microgrid on Hithadhoo Island in the Maldives. This system will integrate 1.7MW of existing solar and diesel generators and a 1MW-0.3MWh battery energy storage system.

  • November 2021, Schneider Electric introduced the first industrial Microgrid in Spain in a strategic tie-up with ACCIONA Energia to mimic any industrial plant. This enable the addition of renewable energies, electric vehicles, and energy storage and provide better consistency and flexibility to energy supplies. The vital aim of the project, which can be simulated in any industrial plant, is to endure development in the energy transition by uniting distributed energy resources sustainability and digitalization to generate a more profitable, resilient, and supportable energy infrastructure.


An Infographic Representation of Microgrid Market

To get information on various segments, share your queries with us

The research report highlights regional and country-level analysis to understand the user better. Furthermore, the reports provide insights into the latest market trends and market analysis of technologies deployed rapidly globally. It further highlights some drivers and restraints, helping the reader gain in-depth knowledge about the industry.




Study Period


Base Year


Estimated Year


Forecast Period


Historical Period



Value (USD Billion)

By Segmentation

By Capacity, By Power Source, By Application, and By Region

By Capacity

  • Less than 5 MW

  • 5 MW -10 MW

  • 10 MW- 20 MW

  • 20 MW -50 MW

  • Above 50 MW

By Power Source

  • Diesel Generators

  • Natural Gas

  • Solar PV

  • CHP

  • Others

By Application

  • Educational Institutes

  • Remote Areas

  • Military

  • Utility Distribution

  • Commercial & Industrial

  • Others

By Geography

  • North America (By Capacity, Power Source, Application, Country)

    • U.S. (By Application)

    • Canada (By Application)

  • Europe (By Capacity, Power Source, Application, Country)

    • Germany (By Application)

    • France (By Application)

    • U.K. (By Application)

    • Italy (By Application)

    • Spain (By Application)

    • Rest of Europe (By Application)

  • Asia Pacific (By Capacity, Power Source, Application, Country)

    • China (By Application)

    • India (By Application)

    • Japan (By Application)

    • Australia (By Application)

    • Southeast Asia (By Application)

    • Rest of Asia Pacific (By Application)

  • Latin America (By Capacity, Power Source, Application, Country)

    • Brazil (By Application)

    • Mexico (By Application)

    • Rest of Latin America (By Application)

  • Middle East & Africa (By Capacity, Power Source, Application, Country)

    • GCC (By Application)

    • South Africa (By Application)

    • Rest of Middle East & Africa (By Application)

Frequently Asked Questions

Fortune Business Insights says that the global market size was USD 7.76 billion in 2021 and is projected to reach USD 23.49 billion by 2029.

In 2021, the Asia Pacific market was valued at USD 3.33 billion.

The market is likely to grow at a CAGR of 15.2%, exhibiting substantial growth during the forecast period (2022-2029).

In the forecast period, educational institutes segment is expected to maintain its position as the dominant application segment.

ABB and Eaton Corp. are some of the key players operating across the industry.

Asia Pacific dominated the market in terms of share in 2021.

Seeking Comprehensive Intelligence on Different Markets?
Get in Touch with Our Experts

Speak to an Expert
  • Nov, 2022
  • 2021
  • 2018-2020
  • 266


  • $4850

Personalize this Research

  • Granular Research on Specified Regions or Segments
  • Companies Profiled based on User Requirement
  • Broader Insights Pertaining to a Specific Segment or Region
  • Breaking Down Competitive Landscape as per Your Requirement
  • Other Specific Requirement on Customization
Request Customization Banner

Client Testimonials

“This report is really well done and we really appreciate it! Again, I may have questions as we dig in deeper. Thanks again for some really good work.”

- U.S.-based biotechnology company focussing on treatment of chronic pain.

“Kudos to your team. Thank you very much for your support and agility to answer our questions.”

- Europe-based provider of solutions to automate data centre operations.

“We appreciate you and your team taking out time to share the report and data file with us, and we are grateful for the flexibility provided to modify the document as per request. This does help us in our business decision making. We would be pleased to work with you again, and hope to continue our business relationship long into the future.”

- India-based manufacturer of industrial and specialty intermediates with a strong global presence.

“I want to first congratulate you on the great work done on the Medical Platforms project. Thank you so much for all your efforts.”

- One of the largest cosmetics company in the world.

“Thank you very much. I really appreciate the work your team has done. I feel very comfortable recommending your services to some of the other startups that I’m working with, and will likely establish a good long partnership with you.”

- U.S. based startup operating in the cultivated meat market.

“We received the below report on the U.S. market from you. We were very satisfied with the report.”

- UGlobal hearing aids manufacturer.

“I just finished my first pass-through of the report. Great work! Thank you!”

- U.S. based solar racking solutions provider.

“Thanks again for the great work on our last partnership. We are ramping up a new project to understand the imaging and imaging service and distribution market in the U.S.”

- World’s leading advisory firm.

“We feel positive about the results. Based on the presented results, we will do strategic review of this new information and might commission a detailed study on some of the modules included in the report after end of the year. Overall we are very satisfied and please pass on the praise to the team. Thank you for the co-operation!”

- Germany based machine construction company.

“Thank you very much for the very good report. I have another requirement on cutting tools, paper crafts and decorative items.”

- Japanese manufacturing company of stationery products.

“We are happy with the professionalism of your in-house research team as well as the quality of your research reports. Looking forward to work together on similar projects”

- One of the Leading Food Companies in Germany

“We appreciate the teamwork and efficiency for such an exhaustive and comprehensive report. The data offered to us was exactly what we were looking for. Thank you!”

- Intuitive Surgical

“I recommend Fortune Business Insights for their honesty and flexibility. Not only that they were very responsive and dealt with all my questions very quickly but they also responded honestly and flexibly to the detailed requests from us in preparing the research report. We value them as a research company worthy of building long-term relationships.”

- Major Food Company in Japan

“Well done Fortune Business Insights! The report covered all the points and was very detailed. Looking forward to work together in the future”

- Ziering Medical

“It has been a delightful experience working with you guys. Thank you Fortune Business Insights for your efforts and prompt response”

- Major Manufacturer of Precision Machine Parts in India

“I had a great experience working with Fortune Business Insights. The report was very accurate and as per my requirements. Very satisfied with the overall report as it has helped me to build strategies for my business”

- Hewlett-Packard

“This is regarding the recent report I bought from Fortune Business insights. Remarkable job and great efforts by your research team. I would also like to thank the back end team for offering a continuous support and stitching together a report that is so comprehensive and exhaustive”

- Global Management Consulting Firm

“Please pass on our sincere thanks to the whole team at Fortune Business Insights. This is a very good piece of work and will be very helpful to us going forward. We know where we will be getting business intelligence from in the future.”

- UK-based Start-up in the Medical Devices Sector

“Thank you for sending the market report and data. It looks quite comprehensive and the data is exactly what I was looking for. I appreciate the timeliness and responsiveness of you and your team.”

- One of the Largest Companies in the Defence Industry
We use cookies to enhance your experience. By continuing to visit this site you agree to our use of cookies . Privacy.