Smart microgrids help us be more resilient in the face of climate change and natural disasters—they can even help fight global warming by helping to reduce our reliance on fossil fuels and facilitating the integration of renewable energy. Today, there are a host of challenges preventing the expansion of smart microgrids; but the good news is that there are paths available to address many of these challenges—and there are more solutions in development.

A smart microgrid is a group of loads and resources acting as a single, controllable body with respect to the grid. Utilizing machine learning and renewable energy sources to operate more efficiently, they can facilitate using renewable energy sources like solar panels or wind turbines in the move to Net Zero.

Smart microgrids are hyperlocal and dedicated to connecting a small group of users. They can also provide electricity when there’s a blackout or other emergency and serve remote communities that don’t have access to the main grid.

Regulatory barriers

Regulatory barriers are the most prevalent challenge to smart microgrid development. The absence of clear regulatory frameworks and incentives, along with the high costs associated with compliance, make it difficult for utilities to justify investing in smart microgrid technologies. This lack of clear regulations and policies has led some states and municipalities to take matters into their own hands, developing regional guidelines for how microgrids should be regulated.

Guidelines & incentives

Building a regulatory framework is the first step to overcoming barriers to smart microgrid development. A clear and consistent set of guidelines will ensure that developers know what they can build, how much it will cost, and how long it will take. Incentives for adoption can be used for utilities and regulators alike; these could include financial rewards or other forms of recognition, like tax credits or fee reductions.

Policy barriers

Many of the barriers to the expansion of smart microgrids are related to the policies, which are inconsistent and can vary widely across states and countries. Another issue is the lack of public awareness and support. Many users are simply unaware that smart microgrids exist and what their benefits are, limiting the potential user base.

Consistent policies

Smart microgrid projects are often challenged by inconsistent policies, confusing developers and consumers alike (for example, some states allow net metering while others don’t). To make smart microgrids more accessible, we must have consistent policies at the federal level.

Financial barriers

Upfront costs associated with smart microgrids present a substantial barrier to development. The cost of installing and maintaining smart microgrid infrastructure is high. If a community doesn’t have access to funding or technical expertise, it may not be possible to install the necessary infrastructure, hindering the ability to develop smart microgrids.

New approaches to infrastructure financing

There are several ways to reduce upfront costs, including standardization and taking smarter approaches to financing like energy-as-a-service (EaaS). By utilizing smart isolated microgrids, remote and rural areas can have affordable, reliable, and consistent access to electricity.

Alternatives at the state & local level

In the U.S., some states have taken issues into their own hands, developing their own rules regarding microgrid regulation. For example, California recently passed legislation requiring all new utility-scale solar projects over 25 MW to include storage capacity.

In Hot Springs, North Carolina, Duke Energy has implemented a smart microgrid that acts as a backup to a 10-mile distribution feeder line that’s prone to frequent outages. Using solar and lithium battery storage, the project has enabled continuous access to power for a community that has often struggled at the mercy of the main grid.

Building resiliency

Smart microgrid development will enable us to become more resilient in the face of climate change and natural disasters and help fight global warming by reducing our reliance on fossil fuels, facilitating the integration of renewable energy. By taking action today to identify solutions to overcome regulatory, financing, resource, and polity hurdles, we can set the stage to make the vision of nationwide smart microgrids a reality as we move toward Net Zero.

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