Microgrid Market Insights and Growth by 2031
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
Market Size Value in US$ 25 Billion in 2021 Market Size Value by US$ 60 Billion by 2028 Growth rate CAGR of 17.0% from 2022 to 2028. Forecast Period 2022-2028 Base Year 2021
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Microgrid Market: Strategic Insights
| Market Size Value in | US$ 25 Billion in 2021 |
| Market Size Value by | US$ 60 Billion by 2028 |
| Growth rate | CAGR of 17.0% from 2022 to 2028. |
| Forecast Period | 2022-2028 |
| Base Year | 2021 |
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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 Report Scope
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
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
Type, Components, End-Use Industry, and Geography
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
US, UK, Canada, Germany, France, Italy, Australia, Russia, China, Japan, South Korea, Saudi Arabia, Brazil, Argentina
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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