Utility Scale Microgrid Market - By Connectivity, By Power Source, By Storage Device, By Grid Type, 2025 – 2034

Utility Scale Microgrid Market Size

The global utility scale microgrid market size was valued at USD 2.7 Billion in 2024 and is estimated to grow at a CAGR of 18.5% from 2025 to 2034. The rising focus on reducing carbon emissions and shifting to clean energy sources, coupled with growing energy security demands, will accelerate microgrid adoption in utility applications.
 

Increasing need for a secure, robust power supply in the utility industry will drive microgrid deployment. Microgrids facilitate decentralized power generation, reducing reliance on centralized grids and enhancing immunity to disruptions, promoting industry prospects. In January 2025, Texas invested USD 1.8 billion to construct backup power solutions, such as microgrids, that encouraged developers, including Enchanted Rock to team up with utilities, enhancing the reliability of the grid and enhancing market growth.
 

Rising transition towards microgrids integrated with renewable sources such as solar and wind, providing sustainable and reliable energy solutions, will augment the business trend. This shift aligns with global decarbonization goals and enhances energy independence, contributing to the market's long-term growth. According to BloombergNEF, 2024 witnessed significant advancements in solar and energy storage, highlighting the pivotal role of microgrids in sustainable energy adoption.
 

Increased need for grid resilience due to increasing climate-based disruptions will propel the adoption of utility scale microgrids. As more severe weather incidents occur, microgrids will supply clean, distributed energy to minimize outages and ensure energy continuity via utility systems. In 2024 alone, the U.S. witnessed 27 weather catastrophes with damage exceeding USD 1 billion. In September, Hurricane Helene left 4.7 million customers in Florida, South Carolina, Georgia, and North Carolina without power, underscored by the vulnerability in the current grid infrastructure thus growing value of microgrids for energy resilience.
 

Utility Scale Microgrid Market Trends

• The increasing deployment of renewable energy sources is projected to influence the expansion of utility scale microgrids. The U.S. Energy Information Administration predicts that in 2025, 7.7 more gigawatts of wind power will be built into the American grid, contributed mainly by Texas, Wyoming, and Massachusetts. This expansion in renewable energy will complement microgrid development, allowing for greater stability and sustainability for the grid.
   
• The deployment of utility scale solar energy will have an impact on product growth. The U.S. EIA predicts 63 GW of new utility scale electricity-generating project additions in 2025, with solar PV leading the way. Solar PV is forecast to represent more than half of the 63 GW of utility scale additions in the U.S. in 2025. This substantial increase in solar capacity will bolster microgrid expansion, improving grid reliability and sustainability.
   
• Technological innovation in battery storage at the scale of the grid will complement microgrid installations through the provision of backup power during blackouts, reducing grid vulnerabilities and enabling a reliable supply of electricity in utility microgrids. The U.S. installed 11.9 GW of battery energy storage systems (BESS) in 2024, with another 18.2 GW of grid-scale installations planned in 2025. Such technologies are enhancing microgrid functionality, allowing it to be more easily integrated into the larger energy system.
   
• The rising focus on energy security and grid reliability will contribute to utility scale industry statistics. Increasing risks of power outages from extreme weather events and aging infrastructure will drive the adoption of microgrids to provide stable and independent energy supply. This will fuel investments in advanced microgrid technologies to provide power without interruptions and minimize disruptions.
   

Utility Scale Microgrid Market Analysis

• The market was valued at USD 1.7 billion, USD 2.1 billion, and USD 2.7 billion in 2022, 2023, and 2024, respectively. The industry is segmented into AC, DC, and hybrid based on grid type.
   
• AC microgrid market dominates the market with a massive 51% market share in 2024 due to their simplicity in being compatible with existing power infrastructure and prevalence of the use of AC by transmission and distribution grids. In October 2022, the University of California, Irvine activated an AC microgrid with 1 MW solar photovoltaic and 500 kWh battery storage at utility scale. The installation enhances energy resiliency, reduces grid dependence, and provides 75 minutes of continuous, uninterrupted islanding when tested.
   
• DC microgrid segment will grow at over 18% between 2025 to 2034. Growth in the usage of renewable energy technologies, including solar photovoltaics will fuel the implementation of DC microgrids. DC microgrids enable easy interfacing with DC-based renewable sources and minimize conversion losses and system efficiency improvement, driving business growth. Eaton introduced a smart DC microgrid initiative in January 2023 in the Netherlands, incorporating rooftop solar panels to supply DC devices, encouraging the efficient use of energy, and pushing renewable energy solutions.
   
• Hybrid microgrids, which integrate both AC and DC systems, are expected to be worth over USD 2.3 billion by 2034 as they are versatile in accommodating varied energy sources. In January 2023, the San Diego City ordered a utility scale hybrid microgrid project at the San Diego International Airport, which will save the city USD 6 million over 25 years and help the city achieve its aim of decreasing energy use by 35% by 2035.
   

• Based on grid connectivity, the utility scale microgrid market is segmented into grid connected and off grid categories. The grid connected segment holds a market share of approximately 71.8% in the year 2024.
   
• Grid connected microgrids are expected to grow, complemented by rising renewable energy integration, energy storage advancements, and increasing demand for grid resilience. These systems enhance energy management and power quality through seamless integration with the main grid. In October 2024, the U.S. DOE invested more than USD 600 million under the Infrastructure Investment and Jobs Act to enhance grid resilience, funding the development of grid connected microgrid projects.
   
• Off grid microgrids will grow to a market size of more than USD 4.2 billion by 2034, spurred by declining prices for renewable energy, the necessity for access to energy, and the demand for energy independence. In 2021, U-Solar developed a 144 kW (DC) off grid solar microgrid with 281 kWh battery storage for Big Basket's warehouse in Haryana, India. This project reduced diesel generator usage from 24 hours to just 4 hours daily by integrating solar and lithium-ion storage, providing Big Basket with reliable power at a nominal cost.
   

• As of 2024, North America holds a utility scale microgrid market share of approximately 29% which is expected to improve further by 2034. The U.S. market was valued at USD 400 million, USD 500 million, and USD 600 million in 2022, 2023, and 2024, respectively.
   
• Growing demand for energy independence and rising investments in renewable energy infrastructure will contribute to the expansion of the market in the U.S. In February 2024, the U.S. Department of Energy funded an Iowa state university led microgrid project with USD 9.5 million federal and USD 2.4 million local investment. It integrates solar and battery storage for resilient, affordable power, aiming to cut energy costs by 18%.
   
• The European market will grow at a rate of more than 11.7% between 2025 to 2034. Rising government initiatives promoting sustainability, increasing energy prices, and growing environmental awareness will foster business growth. In February 2024, Germany allocated USD 540 million for decentralized energy systems, including microgrids, to improve energy efficiency and cut carbon emissions. This aligns with the EU's climate targets and encourages investment in sustainable technologies.
   
• The Asia Pacific market is projected to reach more than USD 10.1 billion by 2034. Urbanization, government support for renewables, and companies' emphasis on energy resiliency will boost market growth. In September 2024, Huawei Digital Power launched the world's biggest microgrid in Saudi Arabia's Red Sea New City, including 400 MW PV and 1.3 GWh of storage, delivering over 1 TWh of green electricity per annum, exemplifying urban renewable potential.
   

Utility Scale Microgrid Market Share

• The top four players, Caterpillar, Eaton, General Electric, and PG&E, hold a 40.3% market share in the market. Currently, Caterpillar focuses on integrating hybrid energy solutions with renewable sources and advanced storage, while General Electric emphasizes smart grid technologies and scalable microgrid systems. Both firms leverage cutting-edge innovations and partnerships to enhance reliability and expand their foothold in the growing microgrid sector.
   
• Leading players in the market pursue strategic partnerships with government and tech entities to advance capabilities. Caterpillar presently collaborates with utilities to deploy resilient hybrid microgrids, optimizing energy efficiency. General Electric partners with grid operators to integrate AI-driven control systems, enhancing grid stability. These alliances bolster their expertise and accelerate the adoption of sustainable microgrid solutions.
   
• Top firms invest heavily in R&D to refine microgrid technologies for current energy demands. Caterpillar develops robust energy storage and renewable integration systems to improve uptime, while General Electric innovates in advanced controllers and modular designs for flexibility. These efforts strengthen their market leadership, aligning with utility needs for efficiency and resilience in the utility scale microgrid landscape.
   

• General Electric (GE) is actively contributing to the utility scale microgrid market through its energy solutions. GE reported revenues of USD 76.7 billion in 2024, reflecting a 10% year-over-year growth. The company achieved an adjusted EBITDA of USD 10.5 billion, with a margin of 13.7%. GE allocated approximately USD 5.2 billion towards R&D in 2024, focusing on innovations in renewable energy and microgrid technologies to enhance system reliability and efficiency.
   
• Schneider Electric is a key player in the market, emphasizing energy management and automation solutions. The company generated revenues of USD 41.5 billion in 2024, with an adjusted EBITA of USD 7.6 billion and a margin of 18.6%. Schneider Electric invested around USD 2.3 billion in R&D during the same year, driving advancements in microgrid systems to support renewable energy integration and optimize energy usage across utility applications.
   

Utility Scale Microgrid Market Companies

Eminent players operating in the utility scale microgrid industry are:

• Ameresco
• Bloom Energy
• Caterpillar
• Eaton
• General Electric
• PG&E
• Piller Power Systems
• S&C Electric Company
• Stellar Energy
• Schneider Electric
   

Utility Scale Microgrid Industry News

• In February 2024, U.S. Energy Secretary Jennifer Granholm announced that Iowa State University researchers were advancing plans to establish a microgrid in Montezuma, Iowa. This project aims to transform energy generation and distribution in the rural town, incorporating solar power and battery storage to create a utility scale system that ensures reliable, resilient, and affordable electricity for the community.
   
• In January 2023, California announced a USD 1 billion initiative to enhance its microgrid capabilities, aiming to improve resilience against outages and natural disasters. This investment is part of a broader strategy to bolster energy security and integrate renewable resources, positioning California as a leader in microgrid technology adoption.
   
• In January 2022, Ameresco, in partnership with PEI Energy Corporation, was awarded the Slemon Park Microgrid project. This initiative aims to support Prince Edward Island's goal of achieving net-zero energy by 2030. The new renewable energy grid will help lower greenhouse gas emissions and enhance energy resilience for a sustainable future.
   

Utility scale microgrid market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue and volume in “USD Billion & MW” from 2021 to 2034, for the following segments:

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Market, By Connectivity, 2021 – 2034 (USD Billion & MW)

• Grid connected
• Off grid

Market, By Power Source, 2021 – 2034 (USD Billion & MW)

• Diesel generators
• Natural gas
• Solar PV
• CHP
• Others

Market, By Storage Device, 2021 – 2034 (USD Billion & MW)

• Lithium-ion
• Lead acid
• Flow battery
• Flywheels
• Others

Market, By Grid Type, 2021 – 2034 (USD Billion & MW)

• AC
• DC
• Hybrid

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • France
  • UK
  • Russia
  • Spain
  • Italy
  • Denmark
• Asia Pacific
  • China
  • Japan
  • South Korea
  • India
  • Australia
• Middle East and Africa
  • Saudi Arabia
  • UAE
  • South Africa
• Latin America
  • Brazil
  • Argentina
  • Chile