Microgrid Market

Microgrid Market Size

The global microgrid market was valued at USD 22.9 billion in 2024. The market is expected to grow from USD 28.9 billion in 2025 to USD 140.7 billion in 2034, at a CAGR of 19.2%.

• Growing focus on energy resilience and reliability, coupled with the worldwide transition to renewable energy and stricter environmental policies, will drive product adoption. Frequent outages and vulnerabilities to extreme weather or cyberattacks highlight the need for localized, independent power sources that can island from the main grid leading to product growth.
  
• A microgrid is a localized energy system with defined electrical boundaries that operates both connected to the traditional utility grid and independently. It integrates distributed energy resources, including solar, wind, and storage, with intelligent control systems, serving facilities such as campuses or communities.
  
• Government and organizations across the globe are investing heavily in green energy initiatives to lower carbon emissions and achieve sustainability goals. These initiatives will create opportunities for microgrids by lowering their initial capital burden of installing microgrids. For instance, as per the IEA 2024 report, global spending in the clean energy sector has exceeded USD 2 trillion in direct government investments since the start of 2020.
  
• The microgrid market was valued at USD 11.4 billion in 2021 and grew at a CAGR of approximately 26% through 2024, driven by growing advancements in smart grid technology, energy management software and energy storage systems aimed at improving microgrid scalability and efficiency. Furthermore, growing deployment of EV fleets escalates the requirement for local, resilient power infrastructure, thereby improving the business trend.
  
• North America accounts for 25.1% of the market value in 2024 due to rising natural disasters frequency, resulting in power grid failures, creating a higher demand for resilient energy systems to ensure a continuous power supply during emergencies, particularly for critical infrastructure facilities, thereby boosting product adoption.
  
• Key players in the region are focusing on forming partnerships to improve their presence in developing regions. For instance, in August 2024, Alternus Clean Energy Inc. and Hover Energy partnered to form a microgrid-focused joint venture, with a planned 60 MW capacity pipeline across the U.S. and Europe. Additionally, industries in carbon-intensive zones are turning into microgrids for electrifying operations using low-carbon or renewable power sources to meet emission caps, leading to market growth.
  
• Latin America's microgrid market is growing rapidly, driven by rural areas lacking reliable electricity access, which impacts well-being and economic potential, prompting microgrid adoption. Additionally, the region is vulnerable to extreme weather events, leading to frequent power outages and disruptions to the central grid, thereby boosting product growth.
  

Microgrid Market Trends

• Rising demand for uninterrupted power supply in off grid/remote areas will propel product penetration. Companies are at the forefront in improving product visibility, leading to stimulate the market statistics. For instance, in February 2021, PT ABB Power Grids Indonesia deployed the country’s first microgrid at ITM’s Indominco Mandiri (IMM) mine. The system integrates 3 MWp solar PV, a 2 MW / 2 MWh BESS, and advanced controls, generating 230 MWh annually and cutting 192 tons of CO2 emissions.
  
• Renewable energy has shown immense growth over the past few decades, and this is further accelerated by the deployment of sustainable energy sources with microgrids as part of carbon reduction strategies. This integration is additionally supported by the reduction in costs of solar PV and its increased efficiency, leading to drive the market scenario.
  
• Moreover, growing public-private collaborations, which help in expanding microgrid reach in unreserved areas with high renewable energy sources, will bolster the business landscape. For instance, in January 2024, Royal Johannesburg and Kensington Golf Club, with partners, launched South Africa’s largest solar microgrid featuring 452 solar panels, Huawei inverters, FreedomWon battery stacks, and an ATESS PCS inverter.
  
• Investments in improving microgrid efficiency by incorporating advanced technologies have increased post-2019. This technological growth aims to make the system more adaptive, resilient and attractive for diverse applications, leading to enhance industry growth. Furthermore, increasing government support and rural electrification will show tremendous product adoption between 2028-2030.
  
• Industrial and remote areas with limited grid access are highly reliant on power solutions that can offer a long operational lifespan. The durability reduces the need for frequent maintenance or replacement, ensuring a consistent power supply over extended periods in areas where operational downtime can be costly. For instance, in October 2024, NTPC and the Indian Army set up a 200 kW solar hydrogen microgrid in Ladakh, to power off-grid Army sites.
  
• Rising grid instability and frequent power outages, driven by extreme weather events and aging infrastructure, have highlighted the limitations of centralized power systems. This shift will enable critical infrastructure such as data centers, hospitals and emergency services to maintain operations during grid failure, resulting in enhance energy resilience, reduced downtime and improved overall system reliability, thereby augmenting the business growth.
  

Microgrid Market Analysis

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• Based on connectivity, the market is bifurcated into grid connected and off grid. The grid connected segment dominated the market accounting for 71.8% revenue share in 2024 and is expected to grow at a CAGR of over 18.8% through 2034.
  
• Increasing demand for connectivity with high load management and peak shaving capabilities, which can reduce energy costs by minimizing dependence on expensive peak-time electricity, will improve product adoption. Furthermore, rising key players' investments in developing new connectivity in remote areas will improve grid tied microgrid adoption. For instance, in September 2024, in Lakshadweep, Honeywell unveiled India's inaugural on-grid solar microgrid equipped with battery storage. The project boasts a solar power capacity of 1.7MWp and energy storage of 1.4MWh.
  
• The off-grid segment is expected to grow at a CAGR of 20.2% through 2034, due to rising energy demands in remote and underserved regions. Furthermore, the increasing need for reasonably priced and environmentally friendly solutions in isolated areas will promote the product penetration. The product provides a reliable power source for critical services, including education, healthcare, and communication in off grid locations.
  
• Additionally, rising supportive government incentives, grants, policies, and heightened awareness of electrification projects in remote/off grid areas will drive the industry outlook. For instance, in September 2024, the U.S. Department of Energy approved a USD 72.8 million loan guarantee for a microgrid project on tribal lands in California. The project includes a 15 MW solar installation and a 70 MWh long-duration battery energy storage system.
  
• Growing companies’ interest in expanding off-grid power requirements and escalating adoption of advanced systems to overcome the growing uninterrupted energy demand will foster industry growth. Additionally, owing to the rapid transition from centralized to decentralized energy systems, the industry landscape is expected to improve, further reducing transmission losses, enhancing energy distribution efficiency, and controlling local energy generation and consumption.
  

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• Based on grid type, the industry is segmented into AC microgrid, DC microgrid and hybrid. The AC segment dominates the market with 51.9% share in 2024 and is expected to grow at a CAGR of 19.2% from 2025 to 2034.
  
• The increase in market share of the AC segment is attributed to the increased demand for dependable power supply solutions, particularly in regions, prone to grid outages. Rising demand in remote or underserved areas drives innovation and investment, supported by government initiatives and policies promoting clean energy which will strengthen the product penetration.
  
• Additionally, technological advancements in energy storage, power electronics and grid management systems, combined with supporting government policies and incentives to foster decentralized energy systems, will accelerate investments, thus improving the business environment. For instance, in December 2024, Truist Bank invested USD150 million in tax equity to Scale Microgrids, supporting the development of microgrids, community solar, and battery storage for commercial and industrial clients.
  
• The hybrid segment is set to grow at a CAGR of 19.7% through 2034 on account of growing adoption of solutions that offer significant economic benefits by reducing energy costs and enhancing financial resilience will improve product demand. Increased demand for energy-independent solutions in areas with unstable power networks in remote areas where grid extension is not financially feasible will propel hybrid connectivity growth.
  
• Additionally, these solutions have seen incremental adoption in various commercial sectors, fostering product adoption. For instance, The State University of Campinas launched CampusGrid, a hybrid microgrid with a 565 MW solar system and 1 MW battery storage, providing two hours of energy autonomy for USD 7.7 million.
  
• The top 2 connectivity segments represent 86% market share in 2024, out of which, the DC microgrid market is expected to grow by more than USD 47.4 billion by 2034. Growing shift towards renewable energy sources and the need for off-grid island mode capable solutions will enhance the product adoption. Additionally, innovations in hydrogen-based microgrid systems, including improvements in electrolysis and fuel cell technologies, are anticipated to boost efficiency and energy reliability in DC microgrid networks.
  

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• The U.S. dominated the microgrid market in North America with around 82.7% share in 2024 and generated USD 4.7 billion in revenue. Growing support from government, including the federal and state level incentives, will encourage microgrid deployment. Ongoing programs, such as the U.S. DOE Microgrid Initiative, aim to provide funding and technical support coupled with active microgrid promotions across economies, including California and New York, among others, to enhance energy resilience and sustainability, will create product opportunities.
  
• The North America microgrid market is projected to hit USD 13.2 billion by 2034. Increasing frequency and severity of natural disasters, exposing the shortcomings of conventional centralized power networks, will drive the need for alternative solutions. According to NCEI, the U.S. experienced 403 weather-related/climate disasters between 1980 and 2024, with each resulting in losses surpassing USD1 billion. These statistics will generate demand for the product as a dependable energy source in certain geographic regions.
  
• The top 4 regions account for 96% market share out of with Asia Pacific microgrid market holds 34.3% share in 2024. Rising earthquakes and typhoons resulting in disruptions to the main grid escalate microgrids demand for microgrids to improve energy resilience and reliability leading to business expansions. As per the UN Economic and Social Commission for Asia Pacific reports indicate that for only the year of 2022, over 7,500 people died due to more than 140 disasters that struck the region. Further, growing natural disasters will increase the product penetration to meet energy demands in areas that are severely hampered.
  
• The China microgrid market holds the largest market share in the region on account of rapid economic growth, industrialization and urbanization. This drives a surge in energy demand, leading to make microgrid a cost-effective and scalable solution to expand energy access across both remote and urban areas. Additionally, the country’s western and mountainous areas lack full grid coverage, creating product demand, enabling the electrification of off grid and rural communities.
  
• Europe microgrid mark is expected to grow at a CAGR of 12.5% through 2034, owing to rising ambitious climate targets, including the European Green Deal. This program seeks to mitigate carbon emissions and boost the share of renewable energy in the overall composition, facilitating the use of microgrids as a key technology for local renewable sources integration. Additionally, rising geopolitical conflicts, including the Russia-Ukraine war have accelerated the region’s efforts to reduce dependency on imported fuels, making microgrids as a preferred choice for local energy independence.
  
• The Middle East & Africa microgrid market is set to reach over USD 6.8 billion by 2034 on account of energy access challenges, growing electricity demand and expanding interest in renewable energy. The presence of many remote and underserved communities in the region lacks reliable grid connections, making decentralized microgrids a viable solution. Additionally, high solar potential of the region coupled with failing solar PV costs support clean energy integration.
  

Microgrid Market Share

• Top five players, including ABB, General Electric, Schneider Electric, S&C Electric Company and Siemens, account for nearly 40% of the microgrid market. These businesses are focusing on creating specialized microgrid solutions to satisfy certain end user needs across various sectors. The tailored designs improve the adoption rates among these diverse consumer groups.
  
• In the microgrid market, Schneider Electric holds a significant share due to its significant investments in R&D to improve microgrid technologies, with a key focus on enhancing energy storage systems, smart grid technologies and the integration of various renewable energy sources. Furthermore, Siemens has released the SIESTORAGE energy storage systems, which provide flexible options for integrating renewable energy, as well as ensuring efficient operation of hybrid microgrids.
  
• Siemens accounts for a major share in the market by offering comprehensive microgrid solutions, including advanced control systems, software for managing generation and demand, and integration of various energy sources. The company’s microgrid solutions help communities and industries integrate renewable energy sources and reduce their reliance on fossil fuels, contributing to sustainability and carbon emission reduction goals.
  
• The market is fragmented due to varied applications, decentralized decision making and a diverse regulatory environment. However, as standards mature and integrated technology improves in the future, the market is expected to get consolidated, especially around platform providers and service aggregators.
  

Microgrid Market Companies

• Schneider Electric, a leader in the microgrid industry, has revealed a notable rise in its 2024 third-quarter sales, with organic growth hitting 8% year-over-year to reach a record USD 9.7 billion. At the Alliance for Rural Electrification Energy Access Investment Forum 2024, Schneider Electric released Villaya Flex, a microgrid solution. It was created specifically for communities, addressing today's energy concerns and easing the transition to decarbonized, independent electricity.
  
• Eaton, a growing company in the market, recorded sales of USD 23.2 billion by 2023, up 12% from 2022 and solely due to growth in organic sales. In 2024, the company clinched an engineering award for its microgrid project, which is powering sustainable and resilient manufacturing in Puerto Rico.
  
• Leading companies such as Hitachi and Exelon Corporation are spearheading the efforts to address the energy problem in rural or remote areas. Hitachi Power has delivered a containerized microgrid system to Alinta Energy’s Newman Power Station. This upgrade aims to optimize and automate operations, boost energy efficiency, cut down on fossil fuel use, and ensure a steady power supply for mining operations in Pilbara.
  

Eminent players operating in the microgrid market are:

• Advanced Microgrid Systems
• ABB
• Ameresco
• Bloom Energy Corporation
• BoxPower
• Caterpillar
• Delta Electronics
• Exelon Corporation
• Eaton
• General Electric
• General Microgrids
• Heila Technologies
• Honeywell International
• Hitachi Energy
• Lockheed Martin Corporation
• PowerSecure
• Power Analytics Global Corporation
• Schneider Electric
• S&C Electric Company
• Siemens
• Toshiba Corporation
  

Microgrid Industry News

• In February 2025, headquartered in California, BoxPower, Inc. offers solar powered microgrid storage solutions to enhance energy access in remote locations. Using modern technology combined with intelligent software, Box Power accelerates solar microgrid installation and optimizes its performance.
  
• In May 2024, At the Alliance for Rural Electrification Energy Access Investment Forum, Schneider Electric unveiled Villaya Flex, their microgrid solution. Stakeholders from the public and business sectors convened in Lagos, Nigeria, to explore the expansion of energy access, with a focus on sub-Saharan Africa.
  
• In April 2024, With the partnership of Enel, Eaton implemented Puerto Rico’s most extensive clean energy microgrid at its plant of circuit breakers located in Arecibo. With a 1.1 MW battery storage solution and a 5 MW solar power system, the project enhances its energy resilience. By integrating these systems with existing onsite generators, the facility not only independently generates and stores renewable energy but also minimizes its environmental footprint and supports the local community's infrastructure.
  

This 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 microgrid
• DC microgrid
• Hybrid

Market, By Connectivity

• Grid connected
• Off grid

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
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
• Middle East and Africa
  • Saudi Arabia
  • UAE
  • South Africa
• Latin America
  • Brazil
  • Argentina
  • Chile