Residential and small commercial microgrids can help both utilities and system owners with grid issues and renewable energy integration. The deployment of microgrids is rising, and they could very well reshape the power sector as it is today.
In the late 1800s, the U.S. electric grid was in its infancy. Small generating stations were coming online and could power just a few city blocks at a time. In the following decades, the practice of transmitting electricity long distances at a high efficiency was mastered. Larger and larger power plants were built, and the modern centralized electric grid was born. By 1930, the majority of people in the U.S. had access to electricity. A “centralized utility grid” typically relies on large-scale power plants to produce electricity that may have to be transmitted hundreds of miles before it reaches its final destination. Centralized utility grid infrastructure makes up roughly 50% of utility costs to ratepayers. The other half of energy costs are for the supply of electricity, which consists of the price of building and maintaining power plants and supplying the fuel they burn. Deployment of microgrids with solar energy will reduce infrastructure and energy supply needs from the centralized utility grid.