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What is a microgrid?

A microgrid is a self-contained electrical network that allows you to generate your own electricity on-site and use it when you need it most. For this purpose, your microgrid will connect, monitor, and control your facility's distributed energy resources (DER) while enhancing performance, a stainable footprint and resilience. You can operate microgrids while connected to the utility grid or in disconnected "island" mode. When the grid goes down or electricity prices peak, microgrids respond.
The three main benefits of microgrids  
  • Microgrids enable greener operations by integrating on-site renewables such as wind and solar.
  • Save energy expenses by optimising demand, storing electricity and selling back to the grid during peak demand.
  • Improve reliability, thus keeping your facility's power on during grid outages.

How do microgrids work?

A microgrid co-locates electricity generation and consumption. Unlike the utility grid, which generates electricity in a centralised power plant and then distributes it along hundreds of miles of transmission lines, a microgrid generates electricity on-site. For electricity generation, microgrids typically use some combination of backup diesel generators and renewables such as solar panels. Microgrids can incorporate battery systems to store electricity and deploy it during outages or when grid demand spikes.
Read how microgrids work
Who can benefit from a microgrid?
Today, organisations of all kinds are turning to microgrids and distributed energy resources for financial and sustainability benefits. We've worked with a diverse set of customers: from municipal governments and military bases to nature preserves and vertical farms. Any organisation seeking to gain control over energy costs, advance sustainability and increase resiliency can benefit from a microgrid.

How much does a microgrid cost to build?

Microgrids range dramatically in complexity and size. The exciting answer for organisations is "it's free" because an energy-as-a-service (EaaS) approach eliminates your upfront costs. A microgrid, in a more traditional way, is a CapEx and an OpEx model. In a project model, it's high CapEx and low or no OpEx; in an energy-as-a-service business model, it's high OpEx. EaaS is a financing model for microgrids that allows you to avoid upfront costs. Similar to a software-as-a-service model, with EaaS you avoid capital expenditures and instead pay only for ongoing service.

Microgrid business models

Discover microgrid types and related business models. Minimize implementation and management costs.

Making solar smarter

Learn how microgrids enable businesses to automatically make choices that provide economic and energy resilience benefits.

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EcoStruxure Microgrid Advisor


EcoStruxure Microgrid Operation


Uninterruptible Power Supply (UPS)


Building Management Systems


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1. Microgrid solutions from Schneider Electric    

Schneider Electric offers efficient microgrid solutions based on a combination of Edge Control Systems, Connected Products, Applications, Analytics, and Services. Connected Products include EVlink Charging Station, Galaxy VX, Galaxy VM. Applications, Analytics, and Services include advanced energy management software, and Edge Control includes EcoStruxure Microgrid Operation. We offer repeatable, scalable, and IoT-enabled microgrid solutions and end-to-end services, including electrical distribution services.    

2. Different types of microgrids    

Broadly speaking, there are three types of microgrids:    

Remote microgrids: These are also called off-grid microgrids. Remote microgrids can operate in island mode and be physically isolated from the utility grid in case of a lack of affordable and available transmissions or distribution infrastructure in the nearby area.    

Grid-connected microgrids: They have a physical connection to the utility grid through a switching mechanism at the PCC (Point of Common Coupling); however, they can be disconnected into island mode and reconnected back to the main grid when required.    

Networked microgrids: These systems are also called nested microgrids and consist of several microgrids and separate DERs connected to the same utility grid circuit segment. They serve a wide geographic area.    

3. Differences between a microgrid and a smart grid   Microgrids are different from smart grids. A microgrid is a self-sufficient and localized energy system serving a discrete geographic footprint, which may be a business center, hospital complex, etc. It includes distributed energy sources and multiple loads, which can be operated parallelly with the broader utility grid. Smart grids, on the other hand, are electrical grids that operate on a larger scale and can regulate energy flows from generation points to consumption points. They include communication, automation, and IT systems.    

4. Designing of a microgrid   

Schneider Electric offers a ready-to-use solution to help you design a microgrid, regardless of the application. Our pre-engineered microgrid control centers have all the components you need for power management, control, energy metering, and power monitoring. In addition, our microgrid management software – EcoStruxure – offers pre-engineered algorithms to make the functions standardized and reliable.