India Microgrid Market Outlook to 2030

India Microgrid Market Overview

• The India Microgrid Market is valued at USD 2.3 billion, driven by the rising need for energy security, government initiatives promoting renewable energy, and advancements in battery storage technologies. Key drivers include the adoption of microgrids in rural electrification, and industrial sectors, and increasing demand for reliable, decentralized energy solutions.
• Key players in the India Microgrid Market include Schneider Electric, ABB, Siemens, General Electric, and Tata Power. These companies have been at the forefront of developing microgrid solutions that integrate renewable energy sources, offering stability and sustainability to the grid.
• Tata Power has partnered with the Rockefeller Foundation to establish microgrid projects across Indias rural regions. Tata Power and the Rockefeller Foundation aim to establish 10,000 renewable microgrids by 2026, providing clean energy to 5 million households and impacting 25 million lives. This initiative will reduce carbon emissions by 1 million tons annually and support 100,000 rural enterprises.
• The Northern region, particularly states like Uttar Pradesh and Bihar, dominated the market in 2023 due to high rural electrification needs and government investments in microgrid projects. The region is expected to witness rapid growth driven by ongoing projects and government funding.

India Microgrid Market Segmentation

The India Microgrid Market is segmented by component type, end-use industry, and region.

• By Component Type: The market is segmented into power generation (solar, wind, and diesel), energy storage (batteries, flywheels), and control systems. Energy storage held the largest market share in 2023, driven by advancements in battery technology and the need for reliable power solutions.

• By End-Use Industry: The market is segmented into commercial & industrial, remote & rural electrification, military, and others. Remote & rural electrification dominated the market in 2023 due to ongoing government initiatives to improve energy access in underserved areas.

• By Region: The market is segmented into North, South, East, and West. The Northern region led in 2023, with substantial investments in microgrid projects aimed at rural electrification and industrial energy needs.

India Microgrid Market Competitive Landscape

• Schneider Electric: Schneider Electric has launched an all-in-one Battery Energy Storage System (BESS) designed for microgrids, enhancing energy management and efficiency. This system integrates seamlessly with EcoStruxure software, enabling flexible configurations and supporting renewable energy use, while Graybar serves as its inaugural distribution partner.
• ABB: Rolls-Royce and ABB announced a global cooperation to develop and deliver microgrids, combining Rolls-Royce's MTU brand microgrid control systems with ABB's microgrid solutions to provide reliable, sustainable and cost-effective power for remote areas and islands.

India Microgrid Market Analysis

India Microgrid Market Growth Drivers:

• Energy Security: Over 50% of rural households in India experience power outages, with some regions reporting an average outage duration of 90 minutes daily. This unreliability drives the demand for decentralized microgrid systems, which can provide consistent electricity and enhance energy security for these communities.
• Renewable Integration: Microgrids integrating renewable energy sources like solar and wind are gaining traction, with solar capacity reaching over 62 GW in India by March 2023. This shift not only reduces carbon emissions but also decreases reliance on fossil fuels, aligning with India's sustainability goals.
• Electrification of Remote Areas: Despite achieving 100% electrification, many rural areas still face unreliable power supply. Studies indicate that rural households endure up to 11 hours of outages daily. Microgrids offer a reliable alternative, improving living standards and enabling economic activities in these remote communities.

India Microgrid Market Challenges:

• High Initial Investment: The installation of microgrid systems can exceed 1 crore per project, making it a substantial financial burden for small-scale industries. With many rural enterprises operating on tight budgets, this high initial investment limits their ability to adopt these advanced technologies effectively.
• Regulatory Issues: India has over 250 million people without reliable access to electricity, highlighting the need for a robust regulatory framework for microgrids. Currently, the absence of uniform regulations across states creates uncertainty for private investors, hindering the widespread adoption and expansion of microgrid solutions.

India Microgrid Market Government Initiatives:

• National Smart Grid Mission (NSGM): Launched in 2015, the NSGM aims to develop smart grids and microgrids across India. The program has allocated 27 crores for microgrid development as part of its broader objectives, which include enhancing rural electrification and integrating renewable energy sources into the grid.
• Rural Electrification Initiatives: Various state governments are collaborating with private companies to establish microgrid systems in off-grid rural areas. Initiatives like the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) aim to electrify un-electrified villages, with over 18,000 villages electrified by 2018, providing uninterrupted power supply to remote communities.

India Microgrid Market Future Market Outlook

The India Microgrid Market is expected to grow substantially over the next five years, driven by increased investments in renewable energy, rising demand for decentralized power systems, and supportive government policies. The adoption of hybrid microgrids combining solar, wind, and battery storage will enhance energy efficiency and sustainability.

India Microgrid Market Future Market Trends:

• Hybrid Microgrids: In the next five years, the integration of renewable energy sources, particularly solar and wind, with advanced battery storage systems will drive the adoption of hybrid microgrids in India. This shift will enhance energy resilience and sustainability, enabling localized energy generation and consumption.
• Smart Microgrids: Over the next five years, the rise of digital technologies will lead to the integration of microgrids with AI and IoT solutions, enabling real-time energy management. This advancement will optimize power distribution across industrial and residential applications, improving efficiency and reliability in energy systems.