As part of the push to improve efficiency, homes are becoming increasingly electrified, with traditional fossil fuel-based systems being replaced by electric alternatives. At the same time, we are witnessing more severe weather events, which are putting a strain on the current energy infrastructure. For instance, the US experienced twice as many weather-related power outages from 2014 to 2023 compared to the previous decade.
Additionally, our electrical infrastructure continues to age, making it challenging for utilities to provide centralized generation plants and the necessary support for the transitioning energy landscape. These broader challenges trickle down, impacting homeowners directly. However, there are solutions available to address these growing power issues.
In fact, these challenges present utilities and homeowners with an opportunity to collaborate and adopt new ways of powering homes. Microgrids are one such solution, offering numerous benefits to homeowners and utility providers.
What is a microgrid?
Microgrids are defined as an electrical system that has loads and generation sources that can operate in parallel with the main utility grid, or, in an islanded state, physically separated from the grid.
While traditionally thought of as a means of backup power, microgrids can also provide energy when the main power grid is up and running to supplement consumption.
Alongside this capability, microgrids can integrate with renewable energy sources, support grid stability, enhance resilience, and reduce peak demand, meaning that they can provide more than just traditional backup power.
Microgrids can benefit both the utility provider and homeowners in creating a more resilient, efficient, affordable, and sustainable electrical supply. Given these benefits, the residential microgrid market is estimated to reach $63.2 billion by 2030, according to MarketDigits.
Benefits of microgirds
Filling the infrastructure gap
As emerging challenges create power deficits, microgrids can be used to provide homeowners with power while utilities work on building power plants and installing transmission lines and transformers.
The interconnection agreements needed for microgrids to connect to the main grid, although challenging, are much quicker to finalize than constructing new infrastructure. They can also be facilitated by fast-tracked interconnection agreements, permits, and pre-approved technology and vendors.
In addition, microgrids can serve as a backup during main grid maintenance, ensuring a continuous power supply.
Furthermore, when utilities are at their limit, microgrids can help by supplying localized power. This is becoming all the more important as homes continue to rely on increasing amounts of electricity.
Microgrids can also ‘firm’ power supply to avoid unwanted power fluctuations. By incorporating batteries and load controls, they can compensate for inconsistent energy output from solar and wind sources.
These benefits provide homeowners with a dependable energy source while preserving grid stability and ensuring power quality for communities.
Strengthening energy resilience
Given the current grid system’s vulnerability due to increasing electrification, it is crucial to implement alternatives that ensure a consistent power supply. Microgrids play a vital role in maintaining operational homes, reducing dependence on centralized grids that can be particularly susceptible to severe weather events.
Microgrids not only help reduce the likelihood of brownouts and blackouts but also reduce the impact of Public Safety Power Shutoffs (PSPS). In such circumstances, microgrids can continue to supply power, ensuring essential loads remain operational in areas where the main grid is unavailable.
What’s more, they can seamlessly reintegrate with the main power supply for efficient recovery and maintain power quality for communities.
Reducing energy costs
Microgrids can decrease electricity costs for homeowners by providing an alternative means of generating energy. Additionally, utilities can benefit by buying back excess energy produced by these systems when the homeowner generates more power than needed.
Another advantage for both homeowners and utilities is that microgrids can reduce the need for expensive peaker plants. Peaker plants, which are dispatched to meet higher-than-anticipated power demands, typically rely on fossil fuels and are costly to operate, with these costs often passed down to consumers.
Microgrids can distribute power during times of peak demand, decreasing the need for peaker plants and avoiding the purchase of more costly power for customers.
A smart investment for long-term savings
What’s more, microgrids support durable Distributed Energy Resources (DERs), which have long life spans, providing cost savings over time.
While microgrids require an upfront investment, they offer flexibility. They can be sized according to the homeowner’s needs and budget, making them a viable option for many. These systems can also be expanded over time to adapt to changing needs, such as the purchase of an electric vehicle (EV).
Overall, the initial cost of having microgrids installed is relatively small in comparison to the long-term savings on energy bills over the system’s lifetime.
Supporting sustainability
Renewable energy is more sustainable energy. However, it is often plagued by intermittent production that lacks consistency. For example, solar production can only occur to the extent that there is available sunlight to harvest.
Microgrids, however, can bolster renewable energy by storing their excess energy in batteries for use during times of intermittency. This means that homeowners can use microgrids to provide renewable energy around the clock, while also stabilizing renewable energy production, which can also benefit utilities.
An intelligent use of power
Microgrids are not only intelligent but also self-sufficient, enabling utilities to optimize demand management by utilizing surplus power. Through demand response (DR) programs, utilities can signal this need to microgrids, enabling them to adjust their energy output and reduce strain on the grid during peak times. Additionally, these types of programs offer financial incentives to participating customers.
Offering improved home energy management with Home Energy Management Systems (HEMS) integration
Investing in a microgrid and using it in conjunction with a HEMS can also benefit homeowners in many ways.
Microgrids can create a consistent flow of energy from various sources, using HEMS to automatically prioritize critical loads and distribute the power when required.
What’s more, a HEMS can also be used to allow the homeowner further savings on energy costs, predicting when costs are high and drawing power from the microgrid at peak times, to avoid high bills.
Microgrids: A win-win solution
All in all, microgrids offer numerous benefits for all parties involved. For homeowners, they provide a reliable power source, especially in areas that are more likely to experience extreme weather events like hurricanes or wildfires. Utilities can also leverage microgrids to better support customers and manage high-demand periods more effectively.
Given these benefits, electricians who understand and communicate the benefits of microgrids can build trust and secure repeat business with loyal homeowners, given that they’ll build a reputation for helping homeowners navigate the evolving energy landscape.
Equally, those who can guide homeowners in the correct use of microgrids and related equipment will be particularly valued by those looking to automate their power supply and save further on home energy bills.
Learn more about HEMS and microgrids in our Residential and Small Business Products page.
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