Microgrids are not a traditional or typical infrastructure investment for utilities, nor has the existing electric power industry been structured to facilitate development of microgrids by non-utilities. This research paper seeks to identify financial and legal barriers to the development of microgrids and provide recommendations for overcoming them.
- Microgrids currently provide a tiny fraction of U.S. electricity, but their capacity is expected to more than double in the next three years.
- Each microgrid’s unique combination of power source, customer, geography, and market can make financing these projects a challenge.
- States can play a key role in facilitating microgrid development.
- A clearer legal framework is needed to define a microgrid, and set forth the rights and obligations of the microgrid owner with respect to its customers and the macrogrid operator.
- Franchise rights granted to utilities may limit microgrid developers’ access to customers.
- Linear programming models can help microgrid project developers or energy managers tailor their proposed projects.
- Greater dialogue among all stakeholders is needed to develop supportive frameworks and policies.
Watch our March 8, 2017 discussion at Geoge Washington University.