A commercial microgrid combines on-site generation (solar, CHP, gas peaker), storage, and switchgear that can island from the main grid during outages. Hospitals, universities, and industrial parks are the most common microgrid customers because the cost of an outage exceeds the cost of the microgrid premium. Typical install cost: $1.5 to $3.5 million per MW. Payback through energy savings + outage avoidance + DR revenue: 8 to 14 years.
Who benefits from microgrids
Hospitals: cost of an outage runs $1 to $5 million per hour due to patient-care risk. Microgrid premium pays back from a single avoided multi-hour outage.
Universities: campus-wide energy load justifies on-site CHP. Microgrid provides resilience and energy cost savings together.
Industrial parks: process-critical operations cannot tolerate outages. Microgrid prevents production losses during grid events.
Cost-benefit math
Capital cost: $1.5 to $3.5 million per MW of generation capacity. Hospital microgrid (typical 5 MW): $10 to $17 million.
Annual revenue streams: energy savings ($300k to $800k), demand response payments ($150k to $400k), outage avoidance value ($500k to $2M). Payback 8 to 14 years.
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