Solarcity, the US residential PV industry leader, is building on its distributed renewable energy experience by launching its GridLogic microgrid offering. It will be a turnkey offering integrating distributed residential and commercial solar, battery and controllable loads as well as shared solar, battery and back-up power and system control. The microgrids will be available with the pay-as-you-go model that has been so successful for residential solar deployment under the “microgrid as a service” offering. Given the high investment requirements for solar and battery systems, this will be crucial for encouraging higher adoption of these renewable microgrids. Users can pay a monthly fee for the system based on their needs and the local system but also have the option to select to pay upfront.

The offering is targeting the typical focus sectors for renewable microgrids including core facilities of municipalities (police, firestations, operation centers etc), remote communities and islands, campuses, and military bases. Interestingly, SolarCity is targeting a global market with this offering indicating their interest in international growth and the market potential for microgrids.

The entry of SolarCity into the renewable microgrid market reinforces the growing interest and potential in this sector, both in the United States and globally. SolarCity will bring significant experience from its distributed residential and commercial solar systems to this market. In addition, it will bring significant financial resources, based on its almost $5 bn market capitalization and also its ability and experience in raising dedicated solar bonds offering yields in the order of 4%. Finally, it will also benefit from its close relationship with Tesla to be able to source batteries at competitive costs as well as eventually integrate electric vehicles and electric vehicle charging into their microgrid systems. 

SolarCity will be a formidable player in the emerging renewable microgrid space, and surely add pressure on utilities around the world to address the growing renewable microgrid market. However, although it will have a strong starting point, SolarCity will need to develop and maintain specific skills and capabilities for the microgrid market. Microgrids are less easily standardized than home or commercial energy systems. The issue of integrated non-solar technologies, including both other renewable generating sources as well as diesel back-up will need to be addressed. Also most geographic markets have their own particularities that need to be understood and addressed and which can be a slow and expensive process. 

Overall, it is great news to have another leading and innovative power sector company enter the renewable microgrid market. The sector is heating up and competition will definitely be fierce.