Germany Microgrid Market to Grow at a CAGR 10.6% from 2022 to 2027

The report "Germany Microgrid Industry by Connectivity (Grid-connected, Off-grid), Offering (Power Generators, Controllers, Energy Storage, Software, Services), End User (Commercial & Industrial, Military, Utilities), Type, Power Rating & Geography - Global Forecast to 2027",published by MarketsandMarkets, Germany Microgrid Market to Grow at a CAGR 10.6% from 2022 to 2027

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Surging adoption of microgrids due to government initiatives in the country

Germany is among the key consumers of microgrids in Europe. The microgrid market outlook in Germany is positive and shows signs of strong growth in the coming years. Germany has a strong commitment to renewable energy and has set ambitious targets to reduce its greenhouse gas emissions. As a result, there is a growing demand for decentralized energy systems, such as microgrids, which can help to integrate renewable energy sources into the grid.

The growth of the microgrid market in Germany can be attributed to the ongoing industrialization and rising number of government initiatives such as EU 20/20/20, Horizon 2020, and Trans-European Energy Infrastructure to promote the use of clean energy solutions in smart grids. The German government has also implemented various policies to support the development of microgrids, including feed-in tariffs and subsidies for renewable energy projects. Additionally, the country has a well-established energy storage industry, which is an essential component of microgrid systems. Germany is also focusing on solar photovoltaic (PV) installations. The government is offering tax benefits, incentives, and subsidies for the installation of solar PV systems.

For instance, in September 2020, the German Government announced the enhancement of its cumulative solar capacity from the current 52 GW to 83 GW by 2026 and 100 GW by 2030. The country also intends to expand the cumulative capacity for onshore wind projects from the current 54 GW to 65 GW by 2026 and 71 GW by 2030. In 2021, renewable energy sources accounted for 41.1% of total electricity generation, with onshore wind power accounting for 15.7% of the total renewable energy, solar power accounted for 8.8%, biomass 6.8%, offshore wind 4.3%, and hydropower 3.4%. In recent years, wind energy in Germany has taken the lead as the main driver of development in the generation of renewable energy. Together, onshore, and offshore wind energy generated 48.8% of Germany's renewable electricity generation in 2021. Technology trends may be seen in the growth of offshore wind, where the expansion objective was increased in 2020 by 5 GW to 20 GW until 2030, (and to 40 GW by 2040). According to the Clean Energy Wire (Germany) 2021 report, approximately 41% of the energy sources are renewables.

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Furthermore, several German companies are active in the microgrid industry, including Siemens, ABB, and SMA Solar Technology. These companies are investing in research and development to improve the efficiency and effectiveness of microgrid systems, which is expected to drive further growth in the market. Germany's utility providers are starting to shut down some of its fossil fuel facilities, such the incredibly efficient combined-cycle gas turbine power plants, as a result of the spike in the production of electricity from renewable sources. The largest utility in the nation, E.ON, recently gave the go-ahead for a microgrid project on the North Sea Island of Pellworm. The island's many sources of renewable energy will be integrated into a single energy system by SmartRegion Pellworm. The ultimate goal is to combine the capacities of wind, solar, and biogas to reduce reliance on mainland imports and attain independence in energy production.