Will residential microgrids go mainstream?
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As residential microgrids become more feasible, more builders will be able to entice homebuyers with the promise of clean, resilient energy.
Microgrids are small-scale electrical networks that can operate independently or in tandem with the grid. Once the domain of large, commercial properties, the technology is making inroads to the residential arena where it’s connecting single-family homes to robust backup power.
Industry analyst Wood Mackenzie says the residential sector has never been a big growth engine of the microgrid industry, but that’s changing. From 2020 to 2022, residential projects made up only five percent of microgrid developments in the U.S. However, that number could jump to 18 percent within several years.
“Looking at the pipeline of projects, we see a lot being announced over the next three years,” says Elham Akhavan, senior research analyst with Wood Mackenzie’s Grid Edge team.
Akhavan cites several factors driving demand:
- An aging population: More homeowners want the assurance that their critical medical equipment – breathing machines, power wheelchairs, home dialysis systems – will continue working during power outages.
- EV charging: More builders are pre-wiring garages for electric vehicle charging. Not only can microgrids charge cars during disruptions, but they can also supplement grid-supplied power, keeping electricity rates in check.
- Zero net energy (ZNE): Microgrids can use a combination of clean energy sources, including solar, battery storage and backup generators fueled by low-carbon propane. As more builders pursue zero-net energy performance, they’re finding that microgrids can complement efforts by offering clean, onsite renewable energy.
While demand is certainly there, developers will have to leap several hurdles to meet it. Put simply, microgrid developments are complicated, Akhavan says.
There are several ways to go about connecting a neighborhood to a microgrid:
- A developer can try to get a utility provider’s buy-in. In this scenario, a utility would own the microgrid assets, saving the developer a considerable expense. “They’d need to be convinced that this will be beneficial for all ratepayers, not only for those living within the border of a community microgrid,” Akhavan explains.
- A developer can go about it on their own: The developer would own and operate the microgrid. The challenge here is that, for one, it’s expensive; for another, it opens a regulatory can of worms. Some states would consider the developer a utility provider and regulate it as such. Akhavan also cautions that the permitting process is very slow. Expect two to three years before connecting.
“It’s a multi-objective problem to solve,” Akhavan says. “The good news is there are examples nationwide that are demonstrating success and could be replicated.”
For developers who can make it work, a neighborhood microgrid is a gamechanger.
Eagle Chase is a 31-home community in Youngsville, NC featuring a 300 kW propane generator with a Tesla Powerpack battery system. The Powerpack is the system’s first line of defense during a power outage. When the battery drains down, the backup generator kicks on. The system can supply the neighborhood with 36 hours of uninterrupted electricity, and indefinitely with additional propane deliveries or increased storage capacity. That’s on the hottest or coldest days of the year when HVAC systems are working their hardest.
“The reality of it is, conservatively, they think it can go a solid week between the battery and propane generator,” says Matthew Winslow, president of Winslow Homes.
Wake Electric Membership Corp. worked with the developer to design the system. As a co-op, the utility determined that supplying a microgrid to the development would help lower rates for all members by supplementing grid-power during periods of peak demand.
Cheaper, more resilient power can be a compelling selling point. To advertise Eagle Chase, Winslow Homes produced several commercials demonstrating what it would be like to live in a microgrid-connected home. In one, a family is playing a board game when the house suddenly goes dark. They count to three and – click – the lights turn back on. Crisis averted.
In reality, power disruptions aren’t even that noticeable.
Says Winslow, “We’ve had outages and most people don’t even know about it.”