Northbrook, IL 60062 -- (SBWIRE) -- 07/05/2022 -- According to MarketsandMarkets, the microgrid market is estimated to be USD 26.9 billion in 2022, and projected to reach USD 63.2 billion by 2027, at a CAGR of 18.6% during the forecast period.
Some of the major factors driving the growth of the microgrid market includes the rising emphasis on decarbonization by end users and government, the growing adoption of microgrids for rural electrification, and the increasing incidence of cyberattacks on energy infrastructures. In addition, governments of major countries across the globe have launched initiatives to encourage the development of microgrids that are fuelling the market's growth.
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A microgrid is a localized group of load and energy sources that are interconnected with main power grids and operate in coordination with them. In remote areas, these grids can also function as off grid in a disconnected mode. Microgrids are defined as a small-scale localized power plants that have their own power generation resources and loads as well as definable boundaries for supplying power. In order to meet the increasing electricity needs of end users, microgrids can be used as a backup power sources or supplementary power sources for main grids.
Based on connectivity, the grid connected segment of the microgrid market is projected to register the highest CAGR between 2022 and 2027. Among their benefits are grid resiliency, improved power quality, and low environmental impact, thereby increasing demand. Globally, this segment has grown due to the expansion of utility-based grid networks, as well as the widespread harnessing of renewable energy sources, which includes offshore wind.
According to estimates, the hardware segment will account for the largest share of the microgrid market by 2027. Microgrid hardware includes generators, energy storage systems, and controllers. Rising number of microgrid projects across the globe, decreasing energy storage costs, and government initiatives towards minimizing greenhouse gas emissions are some of the key factors propelling the market growth. Within the microgrid hardware market, the controller segment is expected to register the higher CAGR during the forecast period. The demand for smart meter is expected to increase globally due to the growing need for utilities to maintain records for monitoring and billing purposes. Smart meters facilitate remote data collection for billing and offer improved power quality.
According to the estimate based on end user, the remote segment of the microgrid market is likely to register second largest market share by 2027. There is a growing demand for microgrids for rural electrification driven by government support and an explosion in the deployment of microgrids in remote areas. In order to provide low-cost and clean electricity, governments around the world are increasing their investments in electricity infrastructure. As a result, there is a growing need for microgrids in remote areas to generate power, as well as to manage and control distributed energy resources.
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During the forecast period, the microgrid market in Asia Pacific is expected to grow at the highest CAGR. The market in Asia Pacific is expanding rapidly due to high rural electrification rate in several economies such as India, Malaysia, and the Philippines. Number of the islands in Indonesia, and the Philippines are not yet electrified, and the lack of adequate electricity infrastructure in emerging economies created the need for cost-effective microgrids in the region.