Global Microgrid Market Assessment, By Type [AC Microgrid, DC Microgrid, Hybrid Microgrid], By Operating Mode [Off-Grid Connected, Grid Connected], By End-user [Utility, Residential, Commercial and Institutional, Industrial, Others], By Region, Opportunities and Forecast, 2018-2032F

Global microgrid market is projected to witness a CAGR of 13.08% during the forecast period 2025-2032, growing from USD 35.86 billion in 2024 to USD 95.87 billion in 2032. The global microgrid market has experienced significant growth in recent years due to the evolving landscape of energy consumption and rising investment in power infrastructure development and is expected to maintain a strong pace of expansion in the coming years. Furthermore, the growing focus on minimizing energy costs is prompting the commercial and industrial sector to adopt microgrids. The microgrids reduce reliance on central grids and optimize energy expenses which drive its demand in different sectors.

 

Report Attribute	Details
Base Year of the Analysis	2024
Forecast Period	2025-2032F
Historical Period	2018-2023
Projected Growth Rate	CAGR of 13.08% between 2025 and 2032
Revenue Forecast in 2032	USD 95.87 billion

The microgrids are able to integrate diverse energy sources, reduce peak loads, and offer scalable, modular solutions which makes the equipment a cornerstone of future energy systems. In addition, the rising demand for uninterrupted power supply and grid stability solutions is making microgrids an attractive solution for critical infrastructure and remote applications. Furthermore, the government is taking the decarbonization efforts and commencing several policies and incentives which support the deployment of renewable energy sources which is becoming a significant driver for microgrids in the market.

For instance, in November 2024, Office of Clean Energy Demonstrations (OCED) selected the National Renewable Energy Laboratory (NREL) to provide technical assistance with integrating distributed energy resources (DERs). OCED announced up to USD 50 million for three energy projects that are designed to implement distributed energy resource management systems (DERMS). The project would enhance the existing regional microgrid with a DERMS that is capable of dispatching customer-owned clean energy to extend the duration which drive the demand for microgrid in the market.

Rising Investment in Electrification Infrastructure for the Development of Efficient Power Supply Systems Drives Market Growth

Developing countries are investing heavily in the infrastructural and energy sectors to accommodate the rising demand for power by different end-uses. The developing countries are looking to develop efficient and resilient power supply systems which could be tailored as per the modern energy demands in the coming years. Regions such as Asia-Pacific, Africa, and Latin America are engaged in the construction of industrial, residential, and commercial bases which significantly increase the electricity demand thereby, leads to higher demand for microgrids in the market. The public sector company and banks are boosting investment in electrical infrastructure which drives the demand for efficient power supply systems in the market.

Significant global investments in electrical infrastructure are propelling the demand for microgrids. For instance, in August 2024, the United States Department of Energy allocated USD 2.2 billion to bolster the nation's power grid, funding eight major projects across 18 states to enhance grid resilience. This initiative underscores a strong commitment to integrate renewable energy, which directly boosts the need for microgrids. In April 2024, the European Investment Bank extended a USD 411 million loan to Thüringer Energie AG (TEAG), a municipal energy provider, for upgrading and digitizing Thuringia's electricity network. This investment aims to improve grid performance. Such substantial financial commitments towards grid modernization and electrification globally are key drivers for the increasing market demand for microgrids.

The technological advancements of microgrids are able to compact energy storage, also including the advanced control systems which make the product feasible to create energy resources closer to end-users without compromising quality or reliability. Microgrids enhance energy security by allowing commercial and industrial facilities to operate independently during grid outages which drives its demand in the market. Globally, governments and higher authorities are taking the initiative to electrify rural and remote areas, which significantly contributes to the rise in demand for microgrids in the forecast period. Both public and private companies are extending the existing power grids to bring electricity to rural areas, which boosts the microgrid market size.

Rise in Integration of Renewable Energy Creates Market Opportunity

Microgrids play a vital role in addressing the challenges associated with managing a more complex and variable energy landscape in the grid. Microgrids are uniquely positioned to facilitate the energy transition efficiently such as equipment is designed to incorporate distributed renewable resources and supply sustainable power effectively and reliably to end-users. The microgrids have the capability to manage the fluctuations and ensure a consistent electricity supply which drives its demand in the renewable energy sector in the forecast period. In addition, the declining costs of solar PV panels and energy storage technologies have further accelerated the adoption of renewable energy, which is boosting the demand for microgrids in the market.

The integration of renewable energy through microgrids enhances energy resilience and assists in optimizing the use of intermittent renewable sources, which creates its adoption in the market.  Governments globally are committing the renewable energy target. Achieving these targets hinges on the strategic development of a balanced energy portfolio. Simultaneously, the industrial sector is also keen to incorporate renewable energy sources directly into their electrical grids and actively exploring investments in decentralized, off-grid microgrids to boost green energy generation. This drive the decarbonization and an overarching energy transition which creates a substantial demand for advanced technologies and innovative electrical infrastructure, notably microgrids, which are adept at integrating diverse energy sources while minimizing energy losses, thereby stimulating their market expansion.

For instance, in October 2023, United States Department of Energy announced to invest around USD 3.45 billion in grid resilience. The main objectives of the  investment is to provide capital for 400 microgrids across the country. This development highlights the rising demand for microgrid in the market.

AC Microgrid Segment Dominates the Global Microgrid Market

AC microgrid currently holds the highest demand in the global market and is projected to maintain strong growth in the forecast period. The AC microgrid is highly compatible with existing utility grids and could be used with the widespread AC-based electrical load equipment in the industrial sector, which drives the demand for AC microgrids in the market. AC microgrids are easier to integrate with conventional grid infrastructure with both grid-connected and islanded operations which makes the segment to dominate the market. AC microgrids benefit from mature power protection systems and well-established operational standards, thus driving its demand in commercial applications.

The expanding investments in modernizing power infrastructure are a significant driver for the demand for AC microgrids. Furthermore, government initiatives aimed at rural electrification are crucial in bolstering energy security and promoting sustainability, which, in turn, accelerates the adoption of AC microgrids. The synergy of technical compatibility, operational reliability, and supportive policy frameworks collectively underpins the increasing market demand for AC microgrids globally.

Asia-Pacific Region Leads the Microgrid Market

The Asia-Pacific region currently holds the largest share of the microgrid market. This dominance is largely attributable to the significant investments being made by numerous developing countries within the region. These investments are directed towards both the expansion of renewable energy sources and the modernization of power distribution networks, both of which are key drivers of microgrid market expansion. Microgrids support the integration of renewable energy and boost the rural electrification evident in large-scale which drives its demand in the market. Microgrids enable the seamless incorporation of intermittent sources and support the decarbonization goals while ensuring a stable power supply. Several developing nations within the region are actively engaged in modernizing their power grids. These modernization efforts are designed to enhance energy efficiency, minimize transmission losses, and guarantee a stable electricity supply. Concurrently, these nations are prioritizing growth in their manufacturing and commercial sectors, which in turn escalates the demand for highly efficient microgrids. A significant contributing factor to market expansion during the forecast period is also the increasing commitment in these countries to electrifying their transportation sectors.

For instance, India's power sector is poised for substantial investment, with an estimated opportunity of around USD 461.95 billion over the next decade. This growth is propelled by the escalating need for infrastructure upgrades and the ongoing transition towards cleaner energy sources. This considerable investment trend in the power sector is a key driver for the anticipated rise in demand for microgrids in the foreseeable future.

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Future Market Scenario (2025 – 2032F)

• Massive investments in infrastructure projects across the region are driving the demand for microgrids in the coming years.
• Governments are focusing on modernizing existing facilities and constructing new ones, including power plants, transportation systems, and commercial buildings, fostering the demand for microgrids in the forecast period.
• Government initiatives, regulatory backing, and increased funding for sustainable energy projects are accelerating microgrid deployment.
• The flexibility of microgrids to operate both grid-connected and off-grid makes equipment ideal for remote communities, islands, and industrial estates, thus driving the demand for microgrids in the market.

Report Scope

“Global Microgrid Market Assessment, Opportunities and Forecast, 2018-2032F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of the global microgrid market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2025 and 2032. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.

Report Attribute	Details
Segments Covered	Type, Operating Mode, End-user
Regions Covered	North America, Europe, South America, Asia-Pacific, Middle East and Africa
Key Companies Profiled	Schneider Electric SE, Alfen N.V., Caterpillar Inc., Siemens AG, Cummins Inc., Hitachi, Ltd., ABB Ltd., ESS Tech, Inc., S&C Electric Company Inc., Rolls-Royce Power Systems AG, Eaton Corporation plc
Customization Scope	15% free report customization with purchase
Pricing and Purchase Options	Avail the customized purchase options to fulfill your precise research needs
Delivery Format	PDF and Excel through email (subject to the license purchased)

In the report, global microgrid market has been segmented into the following categories: 

• By Type
  • AC Microgrid
  • DC Microgrid
  • Hybrid Microgrid
• By Operating Mode
  • Off-Grid Connected
  • Grid Connected
• By End-user
  • Utility
  • Residential
  • Commercial and Institutional
  • Industrial
  • Others
• By Region
  • North America
  • Europe
  • Asia-Pacific
  • South America
  • Middle East and Africa

Key Players Landscape and Outlook

Microgrid manufacturers are implementing a range of strategic measures to strengthen their market position in the industry. Manufacturers are heavily investing in research and development to enhance energy storage systems, smart grid technologies, and the seamless integration of renewable energy sources, ensuring their solutions meet evolving customer needs and regulatory standards. Manufacturers are also focusing on developing cost-effective, modular, and scalable microgrid products which could be tailored for diverse applications. Product launches, agreements, business expansions, collaborations, and developing technologies are projected to increase competition in the fast-paced market.

For instance, in May 2024, Schneider Electric SE decided to launch of its microgrid solution ‘Villaya Flex’ at the Alliance for Rural Electrification Energy Access Investment Forum 2024. This development helps the company to increase the product portfolio and revenue in the coming years. In another instance, in April 2024, Schneider Electric SE decided to launch its latest Battery Energy Storage System (BESS) with a fully integrated microgrid solution. The system with microgrids ensures access and storage of various onsite energy sources quickly, efficiently, and safely. This development highlights that companies are launching the equipment storage systems in the market which will drive the demand for microgrids in the coming years.

Key Players Operating in Global Microgrid Market are:

• Schneider Electric SE
• Alfen N.V.
• Caterpillar Inc.
• Siemens AG
• Cummins Inc.
• Hitachi, Ltd.
• ABB Ltd.
• ESS Tech, Inc.
• S&C Electric Company Inc.
• Rolls-Royce Power Systems AG
• Eaton Corporation plc

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