The solar home system and microgrid market will reach $64 billion by 2030

Following this week's Sustainable Development Goals meeting at United Nations Headquarters in New York, Bloomberg New Energy Finance released an analysis of the potential of off-grid solar PV and microgrids to meet the clean energy needs
of 1 billion people currently unavailable.

According to the report, there are five key factors that indicate that off-grid solar PV will play a key role in providing a
universal energy supply.

High grid connection costs

Chief among these factors is the cost of
grid expansion.
The analysis states that the cost of establishing a connection can range from
$266 to $2,100 per household.
In high-income areas, this is not a problem because households can afford to pay the extra price of energy
.
In addition, energy prices in low-income areas will rise as grid operators amortize facilities
at modest energy consumption.

Bloomberg New Energy Finance calculates that the energy cost from a solar home system is about $1.
5/kWh, or $0.
29-0.
77/kWh
if it comes from a microgrid.
The report goes on to say that the cost of electricity after the new connection is $1/kWh, so it is higher than the energy cost
when the microgrid is deployed.

Huge market size

Analysts say the market size for solar home systems and microgrids will reach $64 billion
by 2030.
As a result, about 15 per cent of the population without electricity lives in urban areas
.
Utilities will focus on extending the grid to these areas
.

However, by mid-2020, distributed technologies will establish supply chains and cheaper components
.
In addition, at that time, there will be fewer
areas where grid expansion and microgrids are economically viable.
Based on these assumptions, the Bloomberg team believes that by 2030, 238 million households will have access to electricity, 72 million will use solar home systems, and 34 million will receive energy
from microgrids.

Cheaper than expected

Bloomberg New Energy Finance analysts estimate that the general power supply market can reach $353 billion, almost half
of what the IEA estimates on different occasions.
However, Bloomberg stressed that the IEA believes that microgrids play a pivotal role
in achieving universal energy supply.
According to analysts, the IEA does estimate that the cost of the system will be higher than what
the market has already experienced.

The development of microgrids has been commercialized

Large oil and energy companies like Shell have in-house teams to build microgrids and sell solar home systems
at scale.
By 2020, 6 of the 20 largest oil and energy companies reportedly committed to providing energy services
to 52 million people.
Analysts stress that these efforts stem not from philanthropy but from rigorous business development programs
in emerging markets.

The private sector has great potential

The report argues that the transition from centralized generation assets to distributed off-grid systems will have a profound impact
on how power systems are deployed, improved, and maintained.
This change leaves a gap
for startups to fill.
According to Bloomberg analysis, the way energy is retailed and distributed can be completely reinvented and optimized
.
According to calculations, increasing the daytime load of agricultural activities, such as irrigation or cold storage, can reduce microgrid energy costs by about 18%.