The California site has the largest sizing of PV and battery due to significant value from retail bill savings, demand response, and wholesale markets. The value achieved by the addition of PV and battery is large enough to offset the added cost of the microgrid, and this is the only site to have a positive net present value.
Thanks to supply chain improvements and other efficiencies, the costs that go into microgrids have dropped. BloombergNEF says that U.S. solar module prices have declined from 41 cents per watt in March 2020 to 31 cents as of February 2024. Globally, the decrease is 22 to 11 cents.
The battery achieves significant revenue from the frequency regulation market. The breakdown of wholesale revenue is about 60% from frequency regulation, 39% from energy, and less than 1% from spinning reserve. The demand response revenue is reduced compared to the diesel-only microgrid because of the reduced EDGs.
The hybrid microgrid consists of networked diesel generators, PV panels, and battery storage. To calculate the expected performance of the backup system for a given outage, we first determine the initial probabilities of being in each system state, which is dependent on the number of working generators and the battery initial state of charge (SOC).
The Maryland site has the smallest PV size of the three sites, but it has a large battery size relative to the PV size. The net present cost for the hybrid microgrid is about 19% lower than the diesel-only microgrid. The battery achieves significant revenue from the frequency regulation market.
According to Nordman, the future of Microgrid technology lies in making it more modular, widespread, and inexpensive so that people could potentially purchase generation or storage systems and bring them home to use.