The US power grid is already struggling to meet electricity needs, and demand is expected to grow. A report from S&P finds electricity demand could grow as much as 50% by 2040, and Goldman Sachs notes that the rise of AI could lead to a 160% increase in data center power demand by 2030. Further, weather-related power outages are on the rise, with outages doubling between 2014-2023 versus 2000 to 2009.
These growing risks are costly for property owners, both in terms of operations and overall property value. To meet these challenges, commercial property owners are turning to the flexibility and resilience of microgrids. These localized energy systems provide financial benefits and long-term energy security, servicing buildings with reliable power even when the local electrical grid is offline.
A microgrid is an independent energy system co-located at a commercial property that can function alongside, and independently of, the utility grid providing consistent power when the grid is down. Coast Energy’s innovative microgrid solutions use combinations of energy assets, including solar, battery storage and backup generators.
“Microgrids offer commercial property owners greater agency over their energy, delivering immediate improvement to property value while reducing reliance on the utility grid and ensuring long-term energy resilience,” says Tim Popp, SVP of Strategy and Operations at Coast Energy.
The US microgrid market was valued at $12.47 billion in 2024 and is projected to grow to $71.1 billion by 2034, a compound annual growth rate of (CAGR) of 19.01%. Adopting microgrids helps property owners improve their overall financial outlook, boost reliability and resilience, and address customers’ power needs.
Immediate financial impact
Coast Energy’s microgrid solutions are offered through contractual agreements that require no upfront capital by commercial property owners and full development and operational oversight by Coast Energy. And with advanced controls, microgrids deliver power from solar, storage, or generators at the greatest value to the property – addressing peak demand, high-rate periods, and grid outages.
Microgrids increase property value from day one, Popp notes. "The benefit happens immediately,” he says. "Once the system is operational, net operating income (NOI) is improved either through operating energy expense savings or from additional lease revenue, or both. And because systems are deployed with no upfront capital by the property owners, capital can be preserved for other property needs."
Unlike traditional solar-only systems, microgrids keep facilities running even when the main grid fails or becomes unreliable, providing consistent power to buildings.
Building reliability and resilience
While savings often drive initial interest, microgrids’ operational benefits are even more compelling. Properties like healthcare and life science facilities, cold storage buildings, and senior living communities need continuous power. Between 2011 and 2021, power outages increased 64% from the previous decade, primarily driven by extreme weather events and natural disasters, according to research from Climate Central. Energy disruptions can have severe financial consequences on buildings and are only projected to worsen.
Microgrids offer two main advantages over traditional grid power. The first is reliability through consistent power delivery without the fluctuations common in grid electricity. The second is resilience due to the ability to keep properties operational even during extended grid outages.
“Microgrids provide a much more stable and reliable power profile than the grid, and they’re designed to kick in automatically when the grid goes down, which offers longer-duration backup power for energy-critical facilities,” Popp says.
A response to growing energy strain
Microgrids are gaining popularity as energy demand outpaces the grid’s ability to supply it. Data centers and the growth of artificial intelligence, as well as the overall electrification of properties across the US, are putting a strain on the aging and under-supplied electrical grid. In many commercial hubs, new developments are delayed due to a lack of utility capacity.
"The grid is aging, transmission and distribution are lacking in many regions, and there's an ever-increasing demand for more and more power,” Popp observes.
Microgrids can help service the need for many commercial property and portfolio owners. And by generating and storing power on site, power is available on-demand when needed independent of grid reliability.
Watching policy changes
The recently passed “Big Beautiful Bill” impacts the 30% investment tax credit for solar after 2027. However, the changes don't affect energy projects for commercial and industrial properties as much as people might think. The value of energy solutions deployed by Coast Energy, including solar, battery storage, and microgrids, is driven more by the needs of the property than by federal tax credits.
“Energy projects for commercial properties, especially microgrids, are somewhat insulated from policy shifts,” Popp says. “The demand for microgrids is driven by the need for lower energy costs, increased reliability, and improved power availability – these needs for property owners are only accelerating with time.”
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