MICROGRID FINANCING GETS EASIER
PROJECTS BELOW 5MW GAIN TRACTION WITH INVESTORS
The arguments for development of renewable clean solar tech microgrids have long been compelling. Utilities, municipalities, and large-scale industries like mining are all under pressure to lower their carbon footprints. Yet, while continued operation of fossil-fuel based power plants becomes increasingly untenable, the possibilities for directly replacing utility-scale legacy plants with equally large-scale renewables-based alternatives are often limited.
Add to this the increasing unreliability of large-scale, long-distance power transmission due to aging infrastructure (see California) and you have a strong case for resilient, locally controlled clean power solutions.
The catch has historically been getting distributed microgrid projects financed. The good news is that, according to a new report from Woods Mackenzie (via GreenBiz), this is becoming easier. In summarizing the Woods Mackenzie report, GreenBiz Sr. Energy Analyst Sarah Golden points to four emerging developments that are stimulating investor interest in microgrids.
Standardization
Historically, microgrids were custom engineered and built on a project-by-project basis. The business and technology risks needed to be evaluated case-by-case, which only made sense for a few larger projects. Now, as clean microgrid technologies mature and prices decline, investors can look at multiple projects using the same or similar designs and technology, thereby streamlining due diligence and reducing risk.
Microgrid Portfolios
Increased standardization means that financers can now evaluate multiple smaller projects, with similar components at different locations, as part of a single portfolio instead of individually.
Demand for Resiliance
GreenBiz’s Golden cites a study from the Rocky Mountain Institute, which shows that California businesses affected by last year’s planned power shutoffs “would have saved money if they had bought solar plus storage outright” instead of continuing to depend on grid suppliers.
Microgrids as a Service
Wood Mackenzie points to an emerging business model that is leveraging each of these developments to create attractive opportunities for investors and offtakers alike. MaaS involves third-party financing options for microgrids in which the energy offtaker does not own or maintain the power-producing assets. These arrangements promise resilience without upfront or ongoing costs, a much cheaper option than buying or renting backup generators or interrupting operations, thus making microgrids accessible to communities and businesses with small energy loads.
The upshot of this is that The US microgrid market is growing, with a record 546 microgrids installed during 2019. Most of those projects were below 5 MW. This continues a trend where smaller, more modular projects have consistently grown each year since 2017. As the market has grown, it has also attracted increasingly diverse financiers. Read more here and here.
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A SIMPLE, RELIABLE TURNKEY SOLUTION FOR CONTINUOUS CLEAN ELECTRICITY WITHOUT DIESEL GENSETS
Before now, sources of clean power were unreliable. Electricity was available only when the sun was shining or the wind was blowing. Storage was expensive. Storing energy for later use required costly batteries. Backup generators were still needed. Off-grid PV and wind installations required diesel generators to provide power around the clock under all weather conditions. Today, continuous clean electricity is a reality – day and night in any weather.
THE IDEAL CLEAN OFF-GRID SOLUTION
247Solar Plants™ are the heart of the world’s most economical renewable energy solution for many off-grid applications.
- 247Solar Plants™ readily integrate with other power generation and management technologies.
- 247Solar Plants store up to 20 hours of the sun’s energy as heat instead of electricity, at less than 5% the cost of batteries.
- 247Solar Plants supply constantly changing loads with highly responsive baseload power.
- PV, wind and batteries provide power for variable loads.
- 247Solar’s turbines can burn a variety of fuels if needed, eliminating the need for diesel gensets and reducing fuel costs 70-90+%.
- 247Solar Plants can also provide industrial grade heat up to 970℃ (1800℉) for a variety of industrial applications.
Contact us to learn more.
