3Q 2018

Designing the Ideal Microgrid Program to Accelerate Global Deployment

Government support for microgrids has consisted of fragmented collections of regulations, standards, and public policies. States and territories have enacted new laws and specific programs designed to bolster grid resilience through microgrids due to extreme weather events hitting the US since 2011. What can the global market learn from these public policy experiments? How do they compare in approach, and more importantly, which have been the most successful to date?

Government support can take many forms. For example, incentives such as tax credits, low interest loans, or other forms of financial assistance for enabling technologies—such as solar PV systems—help facilitate microgrid developments but are ubiquitous. They are not specifically focused on the integration of these assets into microgrids. This report focuses on programs targeting microgrids, along with mandates and targets. It covers Puerto Rico, a US territory that perhaps offers the most comprehensive regional microgrid plan. The US is the world’s most active market in terms of government support for microgrids interconnected to traditional grid infrastructure. Lessons learned from these programs carry repercussions for the global microgrid market.

This Navigant Research report details the history, status, and success of specific US state programs in the hopes that policymakers can learn from what has worked—and what has not. The states (and territory) covered include: California, Connecticut, Hawaii, Maryland, Massachusetts, New Jersey, New York, and Puerto Rico. The report outlines a flexible and nimble strategy for the long-term success of microgrids through a diminished reliance upon direct government support. It also provides five recommendations for future microgrid government support as well as advice for key market participants such as private sector vendors, utilities, and government regulators.

Pages 20
Tables | Charts | Figures 4
  • What types of government support programs have been deployed in the US for microgrids?
  • How successful have these programs been in bringing projects online?
  • How do the profiled states compare to one another in terms of common program elements?
  • What are the most promising forms of government support in the near term—and the long term?
  • What five principles can guide future microgrid policy support?
  • What should microgrid ecosystem stakeholders consider as they seek to shape regulations and incentives?
  • Government regulators and policymakers
  • Utilities
  • Microgrid solutions providers
  • Community groups
  • Academic organizations
  • State energy offices
  • Investor community

Spark

Context

Recommendations

Government Support for Microgrids Takes Many Forms

US States Push Programs to Meet Resiliency and Other Policy Goals with Microgrids

California

Connecticut

Hawaii

Maryland

Massachusetts

New Jersey

New York

Puerto Rico

Microgrid Support Programs Can Be Evaluated in Different Ways

Key Microgrid Government Program Elements

Measuring Microgrid Government Program Success

Reviewing State Government Investments in Microgrids

How Cost-Effective Are These Government Microgrid Programs?

What About Other US States?

Vendors, Utilities, and Regulators Must Shift Away from Direct Government Subsidies – But How?

Best Policy Features from Each State/Territory

Five Principles Can Skillfully Guide Future Microgrid Policy Support

Shift from Grants to Market-Based Incentives

Target Funds toward New Clean and Smart Technologies

Choose Projects That Foster New Business Models

Create Metrics That Capture the Value of Resiliency

Allow for Flexibility and Midcourse Corrections

Recommendations for Microgrid Ecosystem Stakeholders

Vendors Should Think Long Term, Not Short Term, about Government Subsidies

Utilities Should Focus on Opportunities Rather Than Threats

Government Regulators Should Learn from US State/Territory Programs

  • Microgrid Business Models by Market Share, World Market: 2015-2017
  • Identified Microgrid Capacity Supported by Government Funding in Five States
  • DER Mix for State-Supported Microgrids in Six US States
  • Government Microgrid Program Matrix
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