Grid Connected Microgrid Market

Grid Connected Microgrid Market Size

The global grid connected microgrid market was valued at USD 16.4 billion in 2024 and is estimated to grow at a CAGR of 18.8% from 2025 to 2034. Rising requirements for enhanced energy reliability, resilience, and sustainability along with the growing adoption of distributed energy resources, will boost the industry landscape. Technological advancements coupled with the introduction of supportive government policies and incentives will augment the business landscape.

The grid connected microgrid market is in a flourishing stage with active support from government and private sector across the region. For instance, in October 2023, as per Eurostat, the proportion of renewable energy sources in the European Union's energy consumption has risen significantly, with the implementation of the Renewable Energy Directive (2009/28/EC), surging from 12.5% in 2010 to 23% by 2022. Policy makers are working aggressively toward the development of various other programs that will create a significant impact in the clean energy deployment across the region.

The declining cost of sustainable energy and storage technologies has positively swayed the grid connected microgrid market dynamics. Increased government commitments in line with universal electrification and policy implementation have further nourished technological growth. Grid tied microgrid energy service companies have integrated a value proposition for investors and consumers through lower costs and reduced pollution when compared to other alternatives. Improved investment returns and lower tariff rates through the reduction in finance, equipment, and soft costs have been certain critical parameters driving industry growth.

Furthermore, companies are collaborating to bolster the product adoption. For instance, in May 2024, Eaton partnered with Endurant Energy, investing USD 7 million in a battery storage project in New York City. The initiative involves 10 installations across the Bronx and Staten Island, totaling over 150 MWh. Aimed at easing peak load demand and avoiding costly substation upgrades, this move strengthens Eaton’s foothold in the microgrid sector. Additionally, ongoing measures to electrify the rural population will stimulate the deployment of the grid connected microgrid networks.

Grid Connected Microgrid Market Trends

• Rising demand for resilient energy solutions, owing to increasing concerns over grid reliability, will stimulate the business landscape. Advancements in smart grid management systems and energy storage solutions, coupled with growing government incentives and policies supporting clean energy adoption will fuel the market growth. Furthermore, growing urban microgrid deployments catering to the energy needs of densely populated areas by improving energy access in the environment will strengthen product penetration.
  
• Ongoing investments by key players in innovating a new product line will escalate the business trend. For instance, in November 2022, UL Solutions released HOMER Grid version 1.9, featuring improved cost analysis and flexible utility tariff configurations. The update enables more accurate assessments of distributed energy projects, strengthening UL’s product portfolio in the microgrid sector. Furthermore, rigorous norms and regulations for industrial consumers to accelerate the development of clean energy and maintain the energy mix will thrust the deployment of clean fuel technology in the forecasted timeline leading to product deployment.
  
• Growing demand for sustainable energy sources on account of the renewable targets pledged by 175 countries worldwide during the United Nations Climate Change Conference in 2015 has also laid a positive business scenario for the industry. For instance, the Government of Germany pledged to reduce emissions by 38% by 2030, which in turn is favoring the adoption of renewable energy technologies, especially for microgrid applications.
  
• Increasing electricity demand coupled with the growing population leads to concerns pertaining to grid safety and security. Developing economies have consistently been prone to power lags and frequent failure, which in turn is fostering the industry growth. Increasing peak load demand, subject to rapid infrastructure development and supply of power to remote areas, has further led to concerns toward grid stability and security of supply. Ongoing measures toward the deployment of grid connected microgrid networks in remote areas, along with rapid adoption of distributed power-generating systems, will substantially augment the product adoption.
  

Grid Connected Microgrid Market Analysis

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• Based on the grid type, the market is segmented into AC, DC, and hybrid. The global market for grid connected microgrid was valued at USD 10.6 billion, USD 12.9 billion, and USD 16.4 billion in 2022, 2023, and 2024, respectively
  
• The AC grid segment holds a market share of 53.2% in 2024. Increasing demand for reliable and resilient power supply solutions, particularly in regions prone to grid disruptions, will enhance the grid adoption. Moreover, technological advancements in grid management systems and energy storage solutions enhance the efficiency and viability of AC microgrids. Additionally, shifting focus toward renewable energy sources, including solar and wind power, will enhance the requirement for flexible and efficient grid solutions, strengthening the industry landscape.
  
• DC grid segment is set to grow at a CAGR of 18.7% till 2034. Rising demand for higher efficiency grid technology compared to AC grids, especially over long distances, is propelling the product adoption. Companies are also adopting the grid type to enable more efficient energy transfer by eliminating the need for AC-DC conversions. For instance, in April 2022, Solarworx collaborated with Solkamtech SARL to deploy its innovative DC microgrid system in Zalla, a village near Maroua in northern Cameroon. This solar-powered network currently facilitates electricity sharing among 25 homes, with plans underway to expand the connection to 30 more households within the year.
  
• Hybrid segment is expected to reach more than USD 12.2 billion by 2034. Growing concerns about climate change and environmental sustainability have encouraged governments, organizations, and individuals to prioritize clean energy solutions adoption. Hybrid grid systems, which predominantly rely on renewable energy sources, contribute to reducing greenhouse gas emissions and mitigating environmental impacts associated with traditional fossil fuel-based energy generation, thereby stimulating the product penetration.
  

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• Based on power source, the grid connected microgrid market is segmented into diesel generators, natural gas, solar PV, CHP and others. The diesel generators segment held 30.3% market share in 2024.
  
• Rising demand for grid resilience and uninterrupted power supply, especially in critical facilities comprising hospitals and data centers, has significantly improved diesel generator’s demand. They are a dependable energy source, reduce reliance on the main grid and enhance energy security, particularly in regions prone to grid instability or frequent power outages. Furthermore, the scalability, allows operators to easily increase or decrease power generation capacity based on fluctuating demand, grid conditions, or operational requirements, thereby driving the business statistics.
  
• Solar PV segment is set to grow at a CAGR of 20% till 2034. Increasing solar deployments across the globe, along with growing scalability and modularity of solar PV systems aligning seamlessly with the distributed nature of microgrids, will boost the demand for solar PV-powered microgrids. Rising interest of developing economies towards solar based microgrid adoption will foster the business scenario. For instance, in September 2024, Honeywell Automation India Ltd. commissioned a microgrid BESS for SECI’s Lakshadweep project, featuring 1.7 MWp solar and 1.4 MWh storage. The system is expected to save around USD 30 million, reduce diesel use by 19.8 million liters, and cut 58,000 tonnes of CO₂ emissions, according to India’s Ministry of New and Renewable Energy.
  
• Natural gas segment is expected to cross USD 21.6 billion by 2034. The primary factor driving demand is its availability and easy access due to abundant reserves spread across many parts of the world. Its infrastructure for extraction, processing, and distribution also makes its use as a fuel for grid-connected microgrid systems dependable and easy.
  
• CHP segment exceeded USD 3.5 billion in 2024 due to the system’s simultaneous generation of electricity and thermal energy from a single fuel source, achieving operational efficiencies of up to 80%, compared to approximately 50% for separate heat and power systems. Additionally, effective fuel utilization and higher plant efficiency when compared to auxiliary generation sources will foster the CHP-based grid connected microgrid business growth.
  

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• The U.S. grid connected microgrid market was valued at USD 2.6 billion, USD 3 billion, and USD 3.6 billion in 2022, 2023, and 2024, respectively. As of 2024, North America holds a market share of 26.7%, which is expected to improve further by 2034.
  
• In the U.S., increasing focus on public utility distribution microgrids and appreciable growth in investor-owned utility projects will establish a favorable business scenario. Furthermore, companies are getting recognition in terms of awards, leading to improve in their product dominance. For instance. In February 2023, Eaton received the 2022 "Social & Sustainability" award from Electro-Federation Canada for its microgrid project with AMP Energy and the Xeni Gwet'in indigenous community. The project is expected to cut fossil fuel use by 60% and reduce CO₂ emissions by 4,200 tons annually, highlighting Eaton’s commitment to sustainability and social impact.
  
• The Asia Pacific grid connected microgrid market is anticipated to reach more than USD 51.8 billion by 2034. Increasing energy demand, rapid urbanization, and the need for reliable power infrastructure will augment the industry landscape. In China, government policies and regulatory frameworks along with private & public investments, are the strong drivers propelling the market growth. The country has implemented supportive policies, incentives, and financial mechanisms to encourage the development of grid connected microgrid projects.
  
• Europe grid connected microgrid market is set to grow at a CAGR of 15% till 2034. The trend of dealing with climate change in addition to transitioning to a low carbon and renewable energy economy supports business activity for grid connected solutions mitigation strategies aimed at carbon neutrality by mid-century and beyond. These collaborative mergers and acquisitions activities of prominent industry leaders will drive the market need for the products.
  
• Ongoing joint ventures by key players will further escalate the product demand. For instance, Alternus Clean Energy Inc. partnered with a local microgrid solutions provider, Hover Energy, to establish a joint venture focused on microgrid development in the region in August 2024. The partnership encompasses a pre-defined pipeline of 60 MW of capacity across the U.S. and Europe.
  

Grid Connected Microgrid Company Market Share

• The top 4 companies, including General Electric, Schneider Electric, ABB Group and Siemens account for around 30.1% market share. These companies are concentrating on technological innovations to create more efficient and reliable microgrids. These collaborative efforts of forming partnerships are being accentuated in order to expand market coverage and improve the product line.
  
• Additionally, investments in research and development, along with strategic acquisitions, aim to strengthen their competitive position in the market. Furthermore, these campaigns are intended to bolster market presence and broaden impact by employing strategic microgrid marketing and awareness programs based on microgrid applications.
  

Grid Connected Microgrid Market Companies

• Schneider Electric, a key player in the microgrid sector, reported strong performance in the third quarter of 2024, achieving an 8% year-over-year organic sales growth, reaching USD 9.7 billion. During the Alliance for Rural Electrification Energy Access Investment Forum 2024, the company introduced Villaya Flex—an advanced microgrid solution tailored for communities. The system is designed to tackle current energy challenges and support the shift toward sustainable and self-reliant power generation.
  
• Eaton’s 2024 revenue stood at approximately USD 24.8 billion, representing an increase of 12% compared to 2023, which was entirely fueled by sales growth. The company participates in the design and deployment of solutions to improve energy resilience and sustainability in grid-connected microgrids.
  

Eminent players operating in the grid connected microgrid market are:

• ABB
• Advanced Energy Industries
• Eaton
• Emerson
• FlexGen
• General Electric
• Heila Technologies
• Hitachi Energy
• Lockheed Martin Corporation
• Princeton Power Systems
• PowerSecure
• Schneider Electric
• S&C Electric Company
• Siemens
• Tesla
  

Grid Connected Microgrid Industry News:

• In September 2023, UL Solutions released the latest features for HOMER Grid, an energy modeling software for grid-connected hybrid power projects. The new features allow energy professionals to complete more accurate cost and performance evaluations for a specific distributed energy project. By providing state-of-the-art software solutions such as HOMER Grid, UL Solutions aims to strengthen its position as a global leader in applied safety science and renewable energy technology.
  
• In March 2022, Ekurhuleni Municipality, South Africa approved the first grid connected microgrid of a large solar PV plant and battery system. It is one of the biggest microgrids in the area to be formed by solar PV and lithium-ion battery system. Ongoing government investment will accelerate the transition to sustainable electricity generation and increase the adoption of renewable energy across the region.
  

This grid connected microgrid market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue and volume in “USD Billion & MW” from 2021 to 2034, for the following segments:

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Market, By Grid Type

• AC
• DC
• Hybrid

Market, By Power Source

• Diesel generators
• Natural gas
• Solar PV
• CHP
• Others

Market, By Storage Device

• Lithium-ion
• Lead acid
• Flow battery
• Flywheels
• Others

Market, By Application

• Healthcare
• Educational institutes
• Military
• Utility
• Industrial/ commercial
• Remote
• Others

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • France
  • UK
  • Russia
  • Spain
  • Italy
  • Denmark
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • Malaysia
  • Indonesia
• Middle East and Africa
  • Saudi Arabia
  • UAE
  • South Africa
  • Iran
  • Nigeria
• Latin America
  • Brazil
  • Argentina
  • Chile