Financial Accounts of Microgrids

Can microgrids be financed?

Microgrids can be financed if the components (and potentially the entire system) can be justified economically and paid for out of energy savings or avoided costs.

How can a microgrid be monetized?

For example, more sophisticated microgrid owners may explore options for how to monetize those revenue streams to raise upfront cash such as in the bond market or through securitization. Alternatively, or in addition, some microgrid projects may be eligible for grant funding or financing from a federal or state energy finance initiative.

Should a state invest in a microgrid?

Rather than that, the results suggest a state investment over private investment, as the current state of financial structure enables state entities to enjoy the advantages of microgrid establishment more than private investors.

How does government support microgrids?

Support for microgrids comes from research and development (R&D) programs at federal and state levels, software and tools, grants and funding support to incentivize demonstration projects, and tax and financial incentives for the installation of distributed energy [2, 3, 6, 126].

Who owns a microgrid?

According to Navigant Research , the majority of grid-tied microgrids today are owned and financed by facility owners, especially in the campus/institutional category. It is important to recognize that microgrids, especially community microgrids, can utilize the existing distribution system infrastructure, radically reducing their costs.

Why is a microgrid important?

A microgrid can enhance a site’s electrical power system during normal operations and provide reliable backup power to critical loads when electric utility power is interrupted. Economically, many times, certain components of a microgrid (and potentially the entire system) can be justified due to energy savings or avoided costs.