According to a new report from Wood Mackenzie, 546 microgrids were installed in the United States during 2019, more than during any previous year.
While the total number of microgrids reached a new high, the actual annual capacity installed in 2019 was down 7% from 2018.
Numbers in previous years were 138 in 2013, 112 in 2014, 128 in 2015, 143 in 2016, 231 in 2017, 371 in 2018, and, as noted, 546 in 2019, which was more than double the number in 2017.
“Most of the systems installed last year were below 5 MW,” said Isaac Maze-Rothstein, a research analyst with Wood Mackenzie and author of the report. “This is part of a larger trend we are seeing. The market has shifted from being led by projects above 5 MW pre-2017 to smaller systems starting in 2017. Technology-neutral microgrid developers are taking notice and developing more modular designs.”
While most of the power distributed by microgrids last year came from fossil fuel generation, Wood Mackenzie believes that U.S. microgrids will become increasingly reliant on renewables technology.
“Through our five-year forecast, we are optimistic that solar, wind, hydropower, and energy storage will grow to account for 35% of annually installed capacity by 2025,” Maze-Rothstein said.
New projects in 2020, of course, have experienced a pullback, largely due to the coronavirus, with only 129 new projects installed through the first six months of 2020. In fact, according to Wood Mackenzie, the first half of 2020 was the slowest start to the year for the microgrid market since 2016.
“Shelter-in-place orders and social distancing have already delayed permitting, engineering, construction and interconnection processes for developing microgrids,” said the report. “While these challenges are being felt now, some developers have expressed concerns around originating new deals as some customers wait to see how the pandemic and recession impact their core business.”
Still, demand is strong from certain organizations. In 2019, for example, 67% of all new microgrid projects were installed by three organizations: PowerSecure, Enchanted Rock and the American Red Cross. While the first two organizations installed basic microgrids, the report noted that the American Red Cross has primarily been focusing on larger solar-plus-storage microgrids in non-residential locations, such as schools, that could be used following natural disasters.