Microgrid Market Report 2031 by Segments, Geography, Dynamics, Recent Developments, and Strategic Insights

The Microgrid Market size is projected to reach US$ 89.20 billion by 2031 from US$ 35.67 billion in 2023. The market is expected to register a CAGR of 12.1% in 2023–2031. The rising energy demand and growing instances of power outrages are anticipated to drive the growth of the microgrid market globally. Additionally, the growing procurement of electric vehicles and the increasing number of electric vehicle charging facilities are also having a positive impact on the microgrid market globally.

Microgrid Market Analysis

The rising development in the power sector with the expansion of electricity infrastructure in rural parts of developing nations like Asia Pacific is anticipated to drive the demand for microgrids globally. Smart grid integration and the growing application of microgrids for industrial and manufacturing sectors are also acting as major driving factors for the microgrid market. Additionally, growing government focus on mitigating carbon footprint to reduce the level of environmental pollution is also driving the demand for microgrids globally.

Microgrid Market Overview

A microgrid is considered one of the foundations of the future smart grid that leverages distributed power generations and smart technology to construct an extensively distributed automated energy delivery network. The growing energy demand and rising energy infrastructure in remote locations are fueling the demand for microgrids globally. Microgrids can operate independently. A smart microgrid can also operate when connected to the central grid and even when it is off the grid. It helps in lowering harmful emissions, resulting in ideal utilization of renewable energy resources, increased efficiency, and long-term expected energy expenditure.  The microgrid market is segmented into type, components, and end use industries. Based on type, the market is classified into grid connected and off-grid. On the basis of components, the market is bifurcated into hardware, software, and services. In terms of end use industry, the microgrid market is categorized into healthcare, government, and utility, commercial and industrial, others.

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Microgrid Market: Strategic Insights

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Microgrid Market Drivers and Opportunities

Growing Demand for Uninterrupted Power Supply is Expected to be the Prime Driver for the Microgrid Market

The growing incidents of natural disasters such as tropical cyclones, floods, and earthquakes generally disrupt the power transmission and distribution infrastructure, which primarily boosts the demand for microgrids for continuous power supply. Furthermore, the growing demand for power backup solutions to avoid power outrages is anticipated to boost the growth of the microgrid market. The expanding demand for constant power supply in large scale industrial setups is also having a positive impact on the microgrid market. Additionally, the manufacturing sector requires continuous power supply, which is also one of the major contributors in the development of which is also driving the growth of the microgrid market globally. The basic advantage of the microgrid is that it does not require a central grid to be operational; it can also be operated off grid. The operational efficiency of microgrids is also considered a major driver for the microgrid market globally.

Growing Energy Demand

The growing energy demand is one of the major reasons behind the increasing application of microgrids globally. Increasing urbanization and rapid growth of industrialization are also contributing to the development of the microgrid market at the global level. The expansion of electricity infrastructure in the rural parts of developing nations is also acting as a major driver for the market. The growing population and increasing number of commercial spaces are boosting the energy demand, which in turn is driving the growth of the microgrid market globally.

Microgrid Market Report Segmentation Analysis

Key segments that contributed to the derivation of the microgrid market analysis are type, components, and end use industry.

• Based on type, the microgrid market has been divided into grid connected and off-grid. The grid connected segment held a larger market share in 2023.
• Based on components, the microgrid market has been divided into hardware, software, and services. The hardware segment held a larger market share in 2023.
• In terms of end use industry, the market has been segmented into healthcare, government and utility, commercial and industrial, and others. The commercial and industrial segments dominated the market in 2023.

Microgrid Market Share Analysis by Geography

The geographic scope of the Microgrid Market report is mainly divided into five regions: North America, Europe, Asia Pacific, Middle East & Africa, and South America.

Asia Pacific led the microgrid market in 2023. The Asia Pacific region includes China, India, Australia, Japan and South Korea. The high presence of microgrid companies and the developing residential and industrial sectors is acting as a major driver for the microgrid market in Asia Pacific. Increasing incidents of natural disasters and growing demand for emergency power supply in remote locations are also anticipated to propel the demand for microgrids over the forecast period. The expanding industrial setups in the Asia Pacific are boosting the requirement for microgrids for emergency power backups in times of requirement.

Additionally, rapid urbanization and the growing number of commercial centers such as shopping malls, departmental stores, multiplexes, and offices are also contributing to the development of the microgrid market in the Asia Pacific. Growing development in the manufacturing sectors is one of the reasons fueling the application of microgrids for emergency power supply needs in the region. Additionally, rural electrification is also driving the growth of the microgrid market in the Asia Pacific region.

Microgrid Market Regional Insights

The regional trends and factors influencing the Microgrid Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Microgrid Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Microgrid Market Report Scope

Microgrid Market Players Density: Understanding Its Impact on Business Dynamics

The Microgrid Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Microgrid Market are:

1. ABB Group
2. Eaton Corporation
3. General Electric Company
4. HOMER Energy LLC
5. Honeywell International
6. PECO (Exelon Corporation)

Disclaimer: The companies listed above are not ranked in any particular order.

Microgrid Market News and Recent Developments

The Microgrid Market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. The following is a list of developments in the market for Microgrid Market and strategies:

• On April 2024, Enel North America and Eaton completed the installation of Puerto Rico’s largest clean energy microgrid. (Source: Eaton Corporation, Press Release/Company Website/Newsletter)
• On May 2023, Schneider Electric introduced EcoStruxure Microgrid Flex, which is a standardized microgrid solution developed to substantially lower project timelines. (Source: Schneider Electric, Press Release/Company Website/Newsletter)

Microgrid Market Report Coverage and Deliverables

The “Microgrid Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:

• Market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
• Market dynamics such as drivers, restraints, and key opportunities
• Key future trends
• Detailed PEST analysis
• Global and regional market analysis covering key market trends, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments
• Detailed company profiles with SWOT analysis