The coronavirus pandemic has thrown a wrench into U.S. microgrid growth and will delay venture origination and timelines over the following 12 months, in accordance with Wooden Mackenzie’s newest assessment and forecast.
The primary half of 2020 was the slowest for the U.S. microgrid market since 2016, with solely 58 megawatts of initiatives on the books, in accordance with WoodMac’s survey of initiatives of no less than 100 kilowatts in measurement. That’s a steep drop from the 291 megawatts of initiatives put in within the first half of 2019.
The slowdown is pushed by shelter-in-place and stay-at-home orders which have compelled microgrid initiatives to delay allowing, development and interconnection processes amid the nation’s COVID-19 pandemic, microgrid analyst Isaac Maze-Rothstein wrote.
That’s much like the delays which have harm U.S. distributed photo voltaic and power storage deployments, which rely way more on with the ability to entry buildings and work with native authorities to finish their work than do utility-scale initiatives
In the meantime, “some builders have expressed considerations round originating new offers as some prospects wait to see how the pandemic and recession affect their core enterprise,” Maze-Rothstein wrote.
Monetary uncertainty is anticipated to mix with ongoing delays in growing initiatives and lags in tools provide chains to cut back the U.S. microgrid outlook by means of 2022. Bigger-scale initiatives better than 50 megawatts might see venture growth timelines prolonged by a 12 months, whereas smaller-scale initiatives can anticipate a median delay of three months.
These disruptions will start to ease in late 2021 because the pandemic comes beneath management and venture builders and prospects search to make the most of expiring federal tax credit for photo voltaic PV techniques which are changing into extra prevalent in microgrid initiatives.
All informed, the pandemic will play a major half in slowing down a market that’s in any other case seeing rising demand from prospects and significant amenities searching for resiliency in opposition to grid outages brought on by wildfires, storms and different excessive climate occasions.
The market is led by industrial prospects corresponding to hospitals, factories and cold-storage amenities which are notably susceptible to prolonged blackouts corresponding to these imposed in Northern California throughout fire-prevention blackouts, or these brought on by hurricanes throughout the Southeast U.S. and Jap Seaboard.
Third-party financing from modular microgrid suppliers corresponding to Southern Firm’s PowerSecure, Texas-based Enchanted Rock, Massachusetts-based Tecogen and California-based Bloom Vitality, and financing choices from extra advanced, larger-scale microgrid builders together with Engie and Schneider Electrical, are prone to acquire elevated curiosity from this class of consumers within the face of coronavirus impacts and the ensuing financial recession, Maze-Rothstein mentioned.
These industrial techniques depend on fossil-fueled era or combined-heat-and-power techniques, that are nonetheless cheaper for long-term energy provides than clear alternate options corresponding to photo voltaic and batteries. However solar energy and batteries are anticipated to take an rising share of the market in years to come back, largely as a part of broader techniques constructed round natural-gas-powered era.