The global microgrid market size is projected to reach USD 47.4 billion by 2025 from USD 28.6 billion in 2020, at a CAGR of 10.6%. Major drivers for the market growth are rising demand for clean energy, increasing instances of cyberattacks on the energy infrastructures, growing requirement for reliable & secure global power supply, and rising global deployment of microgrids for rural electrification.
Based on end-use, the remote segment to hold the largest share of the microgrid market
The remote segment accounted for the majority of the global microgrid market share in 2019. The growth of this segment can be attributed to the increased adoption of microgrids in remote areas. According to the International Energy Association, approximately 1 billion people in remote areas around the world lack access to electricity owing to the high costs of fossil fuels used for electricity generation and uncertainty in terms of their availability and issues related to their transportation.
Governments of different countries are increasingly investing in the development of electricity infrastructures to provide low-cost and clean electricity. This has led to an increased demand for microgrids in remote areas. Microgrids established in remote areas to generate power, manage and control distributed energy resources, thus optimizing resources.
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Grid-connected segment to hold a larger share of the microgrid market in the coming years
Grid-connected microgrids comprise multiple generators, distribution systems, and sophisticated controls. The main power grid acts as the main power supply for grid-connected microgrids. These microgrids rely on main power grids for power balance and energy backup. Grid-connected microgrids usually have higher reliability than remote/island microgrids owing to their connection with main power grids.
The growth of this segment can be attributed to the expansion of utility-based grid networks, coupled with the large-scale use of renewable sources of energy, such as offshore wind. Grid-connected microgrids offer grid resiliency and improved quality power. They have a low impact on the environment, thus, driving its demand as clean energy.
APAC to witness the highest CAGR in microgrid market during the forecast period.
The market in APAC has been studied for Australia, China and Japan, and the Rest of APAC. The microgrid market in APAC is projected to grow at a fastest CAGR during the forecast period. The growth of the market in APAC can be attributed to the high rate of rural electrification in several economies such as India, Malaysia, and the Philippines of the region. A large number of islands in Indonesia and the Philippines and the lack of proper electricity infrastructure in emerging economies led to demand for cost-effective microgrids in the region as it has a large portion of unelectrified areas. This is expected to contribute to the growth of the microgrid market in APAC during the forecast period.
Key Market Players
ABB (ABB, Switzerland), General Electric Company (GE, US), Siemens AG (Siemens, Germany), Eaton Corporation Inc. (Eaton, Ireland), Schneider Electric SE (Schneider Electric, France), Honeywell International Inc. (Honeywell, US), HOMER Energy LLC (Homer Energy, US), S&C Electric Company (S&C Electric, US), Power Analytics Corporation (Power Analytics, US), and Exelon Corporation (Exelon, US) are a few major players in the global microgrid market.