Microgrids are localized energy systems that can function independently or in tandem with the primary power grid. Comprising distributed energy resources (DERs) like solar panels, wind turbines, batteries, and generators, alongside control systems and sometimes energy storage, they offer resilience and flexibility.

Often powered by renewable sources such as solar, wind, and geothermal energy, microgrids alleviate pressure on regional grids, reducing reliance on dirtier energy sources during peak demand. Some microgrids even produce surplus energy, which can be sold back to the centralized grid, bolstering renewable energy adoption and generating profit for participants.

Critical in curbing carbon emissions and advancing renewable energy adoption, microgrids integrate solar, wind, and other renewables, as well as energy-efficient technologies like fuel cells and advanced storage systems. As of 2022, the U.S. had installed approximately 10 gigawatts of microgrid capacity.

Traditional long-distance power transmission suffers from inefficiencies, with 8% to 15% energy loss during transit. The US has more than 5.7 million miles of transmission and distribution lines which need to be maintained. Microgrids, with their islanding capability, can disconnect from the central grid and supply power independently during grid outages caused by storms or other emergencies. This capability is particularly valuable in the U.S., where the extensive and interconnected nature of the central grid renders it susceptible to outages. The Northeast Blackout of 2003 vividly illustrated the vulnerability of centralized grids, wherein a single incident can trigger widespread power failures across states and even international borders. Islanding enables microgrids to avoid such cascading failures, ensuring reliable power supply to their customers.