The Cost of Resiliency: Searching for an Economic Case for Grid-Tied Microgrids

April 14, 2017 | State of the Market Report

Localized on-grid electricity systems that can disconnect from the rest of the grid – called “grid-tied microgrids” – have been gaining momentum in recent years, especially as a tool for resiliency in response to a number of natural disasters around the world. However, these systems are inherently expensive, and their high capital costs often make it difficult to justify adoption. In this report, we analyze the economics of different microgrid configurations, not only for resiliency but also for providing value to the grid. We find that a simple diesel backup generator is the most economical source of resiliency by a long shot, but that using excess capacity within the microgrid to provide grid services can dramatically improve microgrid economics in some markets, though typically not enough to offset their high cost.

Coverage Areas

  • Distributed Generation
  • Energy Storage
  • Future Grid
  • Next Generation Power
  • Owning the Energy Transition

Table of Contents

  • Title page
  • Landscape
  • Analysis
  • Outlook
  • Appendix: Detailed Description of Methodology

Lead Analyst

Katrina Westerhof
Senior Analyst


Arij van Berkel

Login to View This Research

Already a Lux Client?

Sign In

Not a Lux Client?

Talk to Lux Research now and learn the benefits of becoming a member.

Lux Research

  • Helps clients find new business opportunities from emerging technologies in the physical and life sciences
  • Offers ongoing technology and market intelligence, as well as market data and consulting services
  • Now serves over 250 clients on six continents – multinational corporations, investors, governments, and SMEs
  • Has a Global reach, with offices in Boston, New York, Amsterdam, Singapore, and Tokyo
  • Combines deep technical expertise with business analysis to support strategic decisions

Or call us now

For North America (Boston Headquarters)
+1 (617) 502-5300

For EMEA (Amsterdam)
+31 (0) 20-3460840

For APAC (Singapore)
+65 6592-6978