Microgrid as a Service Market Size 2024-2028

The microgrid as a service market size is forecast to increase by USD 8.66 billion, at a CAGR of 16.83% between 2023 and 2028. The market is experiencing significant growth, driven by the increasing demand for microgrids to ensure energy reliability and resilience. Microgrids enable the decentralized generation and distribution of electricity, making them an attractive solution for remote areas and critical infrastructure sites. Additionally, rapid advances in technology, such as energy storage, smart grid, and IoT, are enhancing the capabilities and efficiency of microgrids. However, the reluctance in the adoption of microgrid technology due to high upfront costs and regulatory challenges persists. Despite these challenges, the MaaS business model, which allows customers to pay for microgrid services, software as a service on a subscription basis, is gaining traction and is expected to accelerate market growth. The MaaS market is poised to revolutionize the energy landscape by offering flexible, scalable, and cost-effective microgrid solution to a wide range of customers.

What will be the Size of the Market During the Forecast Period?

Market Forecast 2024-2028

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Market Dynamics

Remote Localities Microgrids as a Service (MaaS) is revolutionizing the energy landscape by providing customized power solutions to educational universities, hospitals, and remote localities. These institutions have unique energy needs that go beyond the reach of traditional electric companies and the unreliability of the energy grid. Microgrids offer energy resiliency and reliability, ensuring uninterrupted power supply during public benefits such as power outages. Real-time data streaming, processing, storage, and monitoring infrastructure enable human intervention to optimize energy use and reduce emissions. Microgrids cater to cleaner energy goals by integrating renewable energy sources like hydro, solar, and wind energy into the grid systems. Energy storage solutions help manage fluctuations and transmission losses, providing a consistent power supply. MaaS offers real-time insights into energy consumption and costs, allowing enterprises to make informed decisions and reduce electric bills. Solar panels, as part of the microgrid, provide an insulation barrier against summer cooling costs. The DOE-funded program and product innovation in MaaS are driving awareness and connectivity, making it an essential infrastructure project for the future. The technicalities of microgrids are being addressed, making it an accessible and viable solution for various industries. In summary, Microgrids as a Service provide customized, reliable, and resilient power solutions, integrating renewable energy sources and reducing emissions, making them a crucial investment for educational universities, hospitals, and remote localities.

Key Market Driver - Growing demand for microgrids

Some of the main issues associated with the power industry include aging infrastructure, climate change, rising energy costs, and mass electrification. Several developed countries have established power infrastructures that are facing outages due to aging. 

Moreover, hierarchical power is followed by traditional grids where power is generated at a central location and then transmitted to substations through transmission lines, distribution lines, and finally to the end-users. As a result, any issues on one part of the system have a chain reaction on the rest of the system, thereby affecting the reliability of the grid. Therefore, there is an increasing demand for traditional grids in order to overcome such challenges. Hence, such factors are driving the market growth during the forecast period.

Significant Market Trends - Rapid advances in technology

The changes in microgrids are significantly revolutionizing the electricity utility businesses they are changing the foundation of the electricity sector.  There have been significant advancements in technology that have resulted in the development of compact energy storage systems, advanced control systems, and efficient renewable power generation sources.

Moreover, the decreasing cost of power generation has fuelled the use of decentralized power systems including microgrids. As a result, it is fuelling the popularity of microgrid technologies among consumers during vaccination drives. Hence, such factors are positively impacting the market. Therefore, it is expected to drive the market growth during the forecast period.

Major Market Challenge - Reluctance in the adoption of microgrid technology

There has been a continuous increase in the adoption of energy storage technologies due to the decline in the cost of renewables and energy storage technologies. The main advantage of energy storage technologies is that they enable customers to generate their own power independently, thereby making them less dependent on the grid.

Moreover, the operation of microgrids is different from that of the traditional business model of electricity generation it is significantly impacting the investments and grid operation of grid power companies. Utilities are subjected to provide a universal service with limited resources to all their customers at a standard price, and when a customer decides to go off-grid or use the grid only as a backup, it results in revenue losses for power companies. As a result, the cost will be borne by the remaining customers that depend on the grid that depends on the grid. Hence, such factors are negatively impacting the market. Therefore, it is expected to hinder the market growth during the forecast period.

Market Segmentation

Service Type Segment Analysis: 

The software as a service segment is estimated to witness significant growth during the forecast period. The main advantage of the software as a service segment is that the microgrid owners have a single point of accountability and minimal risk of project delays and failures.  As a result, it is a safer, more reliable, and power-efficient microgrid system which is significantly fuelling the adoption of this segment. There are several market players that offer microgrid software-as-service operating in the global microgrid as a service.

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The software as a service segment was the largest segment and was valued at USD 2.39 billion in 2018. For example, Siemens AG, a German multinational conglomerate corporation and the largest industrial manufacturing company in Europe offers microgrid software-as-service, especially for utilities.  The main feature of this product is that it is designed in such a way that managing software easier for microgrid users such as universities, companies, manufacturers, communities, and utilities. This is mainly done by locating microgrid software and related hardware at a Siemens data center off-site. Hence, such benefits are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.

Type Segment Analysis: 

Based on type, the segment is classified into remote, grid-connected, and networked. The remote segment operates perpetually in island mode due to a lack of nearby transmission or distribution (T& D) infrastructure that is both accessible and reasonably priced. It is also known as off-grid microgrids.  Renewable energy sources, such as wind and solar provide the microgrid operator and monitoring and control services with a more cost-effective and environmentally friendly DER solution for these remote scenarios. There is an increasing adoption of remote segments across rural areas due to its numerous advantages. One of the main advantages of this segment is that it can own the microgrid and use it as a DER, giving those remote customers the same level of dependability as non-remote customers. Hence, such benefits are expected to fuel the growth of this segment which in turn will drive the market growth during the forecast period.

Regional Analysis

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APAC is estimated to contribute 47% to the growth by 2028. Technavio’s analysts have elaborately explained the regional trends, drivers, and challenges that are expected to shape the market during the forecast period.  One of the main factors that is significantly contributing to the global microgrid as a service market in APAC is the expanding urbanization and industrialization in the region. In addition, the growth of the market in the region is fuelled by significant investments in microgrid infrastructure and the rising demand for a constant, uninterrupted, and dependable supply of power and electricity. For instance, the Philippines is heavily relying on imports for its energy needs, such as coal for the power industry and oil for the transport industry.  Remote communities and areas with no grid connection across 7,000 islands rely on generators that burn expensive fuels to supply power.  Such challenges can be resolved by powering the islands with renewable-based power systems such as microgrids. hence, such factors are driving the market growth in APAC during the forecast period.

Who are the Major Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• ABB Ltd: The company offers microgrids as a service for energy storage, solar generation, and hydrogen.

We also have detailed analyses of the market’s competitive landscape and offer information on 20 market companies, including:

Aggreko Plc, AIO Systems Ltd., Anbaric Development Partners LLC, Canopy Power, Capstone Green Energy Corp., Duke Energy Corp., Eaton Corp. Plc, Emerson Electric Co., Enchanted Rock LLC, ENGIE SA, General Electric Co., General MicroGrids, Metco Engineering, NRG Energy Inc., Pareto Energy, Schneider Electric SE, Siemens AG, Spirae LLC, Tech Mahindra Ltd., and Tesla Inc.

Technavio report provides an in-depth analysis of the market and its players through combined qualitative and quantitative data. The analysis classifies companies into categories based on their business approaches, including pure-play, category-focused, industry-focused, and diversified. Companies are specially categorized into dominant, leading, strong, tentative, and weak, based on their quantitative data analysis.  

Segment Overview

The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.

• Service Type Outlook
  • Software as a service
  • Monitoring and control services
  • Engineering and design services
• Type Outlook
  • Remote
  • Grid-connected
  • Networked
• Geography Outlook
  • North America
    • The U.S.
    • Canada
  • Europe
    • U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile
    • Argentina
    • Brazil
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is gaining momentum with a focus on enhancing reliability and resiliency in energy systems. Leveraging wireless and IoT technologies, these solutions offer real-time data streaming and processing to optimize energy use and storage. Electric companies are increasingly adopting microgrid solution to meet cleaner energy goals and reduce emissions. Advanced monitoring infrastructure supports efficient storage and ensures continuous operation. By integrating energy grid components with infrastructure projects, microgrids enhance both reliability and resiliency. The ability to analyze and manage real-time data improves storage strategies and contributes to public benefits. This approach supports emissions reduction and aligns with broader cleaner energy goals, providing scalable, flexible solutions for diverse applications. As demand for sustainable energy solutions grows, microgrid services play a crucial role in transforming energy infrastructure and supporting long-term environmental objectives.

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What are the Key Data Covered in this Market Forecasting Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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