Should More Businesses Rely on Microgrids?

The nation’s electrical grid system is prone to outages during inclement weather or peak usage. Businesses that must keep running under every circumstance often tap into self-contained electrical networks known as microgrids to prevent downtime.

The beauty of microgrids is that they connect to a local utility’s grid but can disconnect if service is unavailable or extremely expensive, becoming a self-contained island of energy serving only your company. There are several pros and cons of relying on a microgrid.

Pro: Offers Energy to Remote Locations

Company leaders may find that some locations prohibit running power to them for an office space or manufacturing facility. If your company is on a small island or in an isolated rural area, the infrastructure to provide the electricity you need may be absent.

The installation cost of a microgrid in remote locations is 25% to 30% cheaper than a decade ago. This energy option can support businesses and open up many possibilities, such as purchasing inexpensive land for facilities or gaining the acreage needed to run various projects.

Con: May Be Damaged by Natural Disasters

Most microgrids utilize renewable energy sources, such as solar or wind-powered methods. Unfortunately, damage may also occur to solar panels or windmills when the primary electrical grid goes down during a tornado or hurricane.

Some types of roof damage that can negatively affect your microgrid include water damage from leakage, missing solar shingles or debris on the roof, and hail damage that destroys solar panels and requires replacements. You should increase your insurance coverage to account for the added costs of replacing microgrid parts.

Pro: Saves and Generates Money

After you recoup the initial cost of the microgrid, you can save money on electricity. You may even generate revenue if your local energy company allows you to sell back excess power to them.

The cost of installing new equipment adds up. Check for federal and state tax credits for businesses to see how much you can deduct. You can expect the microgrid to take a few years to break even.

Con: Is Difficult to Integrate With Existing Power Sources

Many well-established local power companies resist companies tapping into systems that take money out of their pockets. Also, connecting to the main grid and having a backup source during peak times requires knowledge of how both types of power work separately and together.

It’s vital to work with a knowledgeable professional familiar with the grids in your area. When placed in grid-connected mode, systems can import or export energy, depending on business needs. Correctly wiring your microgrid is vital for successful operation.

Pro: Reduces Your Carbon Footprint

Companies committed to going greener and having less negative environmental impact can utilize a microgrid to reduce their dependence on fossil fuels. Since most microgrids generate energy from sustainable methods, their processes are naturally greener and can reduce your carbon footprint.

The use of renewable power sources was estimated to grow about 17% by 2020 and continues to become more prevalent. Public support and tax credits may be a big reason more companies are looking into alternatives.

Con: Has Extensive Regulation

Installers must integrate microgrids into existing grid codes for the new systems to function correctly. However, finding standardized programming and overcoming regulatory hurdles is challenging. Local utilities must also ensure that any power source plugged into them is secure to prevent an entire grid from going down and impacting others.

States such as California, Hawaii and Maine are ahead of the curve in creating laws to overcome interconnectivity challenges. They also ensure companies with microgrids can receive compensation for providing power to a utility.

Before investing in equipment or signing a lease, ensure you can connect to the local system and find out what credits or revenue you’ll receive for the energy you generate.

Should Your Business Rely on a Microgrid?

Utilizing a microgrid for all your energy needs may still be unattainable if you have high power supply needs. However, adding the option to pull from sustainable sources at least some of the time benefits your community and offers money-saving opportunities for your brand. While it’s best to have multiple energy sources to utilize, a microgrid provides another option that ensures you stay up and running no matter what happens around you.

Jane Marsh works as the founder and editor-in-chief of Environment.co where she covers environmental news and sustainable living tips.