C&I is Fastest Growing Microgrid Sector
The energy-intensive commercial and industrial (C&I) sector is currently the fastest-growing microgrid market segment in the US, according to a Wood Mackenzie report. Previously, the C&I microgrid market was slow to develop due to an unclear value proposition of return on investment (ROI) and being risk-averse to transitioning to a complex energy infrastructure. However, now that solar PV is the cheapest source of electricity on the planet, onsite renewable microgrids are more affordable and accessible than ever. The Inflation Reduction Act (IRA) further accelerates microgrid adoption by offering a 30% tax credit through 2032 for solar, energy storage, and microgrid controllers.
Grid-connected or remote, C&I microgrids offer a robust and resilient independent power supply, reduce carbon emissions, and, most importantly, lower electricity costs. This article dives into the benefits the C&I segment has to gain from renewable energy microgrids and how customers can invest without incurring risk, debt, or upfront capital expenses using an innovative energy-as-a-service microgrid model.
What is a Commercial and Industrial Microgrid?
A C&I microgrid is a localized power generation system that can operate independently (off-grid) or connected to the grid. The microgrid is often fueled by renewable energy, such as solar, and includes batteries or other energy storage, power distribution equipment, and intelligent control software. Intelligent software platforms make smart operational decisions to maximize efficiency and cost by optimizing utility rates and energy consumption.
Since revenue is directly linked to operational uptime, resiliency is a key strategy for protecting the bottom line and ensuring unrestricted company growth. For instance, one hour of downtime in the industry vertical costs over $5 million. The escalating impact of climate change has amplified the need for resilience, as more frequent extreme weather events have increased blackouts. With worsening reliability from grid congestion and aging transmission and distribution infrastructure, C&I businesses are turning to microgrids to provide 24/7 uninterrupted onsite power.
Additionally, cybersecurity concerns have driven interest in remote microgrid solutions for extra protection. The U.S. Department of Homeland Security found that the manufacturing industry is the second highest target for cyberattacks due to increasing IoT (Internet of Things) connectivity that leaves unprepared businesses vulnerable. With microgrids' islanding ability, C&I companies can bolster cybersecurity with a decentralized asset that is more challenging to breach.
Amid growing policy pressures to phase out fossil fuels and market demand to disclose climate change business risks, C&I customers are looking for ways to make their operations resilient and sustainable. Renewable energy-based microgrid comes to the top of that list. This shift to low/zero carbon energy, such as solar, not only reduces greenhouse gas emissions but also yields substantial cost savings. Digital platforms integrated into C&I microgrids monitor and manage energy consumption and offer insights into sustainability progress and compliance with evolving disclosure mandates and ESG (environmental, social, and governance) reporting.
Unlocking Cost Efficiency
Decreases in solar and energy storage prices have made microgrids more attractive to C&I customers, as one of their primary motivations is energy cost reductions. With microgrid distributed energy resources (DERs) coming to the forefront, businesses can tap into new value streams to cut costs. One example is reducing expensive peak demand charges that constitute close to 50% of the electric utility bill. Manufacturers such as food and beverage, chemical, and paper industries have some of the greatest potential to reduce demand charges. Also, as more companies electrify their fleets, renewable energy microgrids can curtail electric vehicle (EV) charging costs and save on operational expenses.
Furthermore, modular microgrids are gaining momentum in the C&I industry. These alternative microgrids significantly reduce design and implementation costs by being standardized and streamlined. The plug-and-play design is excellent for C&I customers who want to quickly deploy, finance, and scale microgrids across their global portfolios.
The Optimal Solution: Energy-as-a-Service Microgrids for C&I
With an Energy-as-a-Service (EaaS) microgrid, C&I businesses can cut energy expenditures, reduce carbon emissions, and prevent productivity and revenue losses from power outages –without taking on operational risk, incurring debt, or committing upfront capital. An energy services partner oversees the microgrid's entire lifecycle, from planning, design, financing, construction, operation, and maintenance, handling all associated challenges and necessary equipment upgrades.
In return, the C&I customer receives zero-carbon energy, guaranteed system performance, instant energy bill savings, carbon reductions, and resiliency. All this enables companies to focus on their core business growth and allocate capital to their core business endeavors.
Partner with GreenStruxture and Save
Companies no longer have to choose between clean resilient energy and their bottom line. With substantial cost savings from mitigating demand charges, taking advantage of time-of-use (TOU) arbitrage, reducing operational disruptions, and utilizing the cheapest form of electricity on the planet (solar PV), microgrids are an excellent option for C&I companies.
By partnering with GreenStruxture for an Energy-as-a-Service microgrid, you can minimize the risk and complexity while your facility reaps guaranteed rewards. Get an assessment today and discover how an EaaS microgrid can support your C&I business in achieving sustainability, resilience, and cost savings goals.