Caterpillar, a global leader in diesel gensets and construction equipment, has announced a strategic alliance with First Solar, a leading global manufacturer of thin-film solar panels, to provide an integrated microgrid offering. Leveraging Caterpillar’s experience in distributed power and global dealership network, this alliance will position itself for growth in renewable microgrids with a likely focus on displacing diesel generation with solar generation. Caterpillar will offer CAT branded panels manufactured by First Solar, allowing them to build on and maintain their brand name. They are will also combine the offering with energy storage and controls to present a complete microgrid package.

This latest announcement is again further evidence of leading energy companies positioning themselves for the shift in the power sector and upcoming growth of renewable microgrids. Although Caterpillar has a strong brand and network to build from, it is not clear that they will be competitive in regards to critical technology components such as the storage and the system controls and analytics that will be critical for success. Furthermore, the system financing and business model are much more critical in a renewable focused microgrid where much of the cost is upfront as opposed to on-going costs as it is for diesel generation. In remains to be seen whether this alliance can tackle these issues and compete a fast growing number of parties targeting this market.