Microgrids
A small grid that can run on its own. For 700 million people it is the only grid they will ever get, and for everyone else it is what keeps the lights on when the big one fails.
The effect compounds within years. Put it in place and it keeps working.
Origins
The first electricity grids were all microgrids.
Edison’s Pearl Street Station in 1882 served a few blocks of Manhattan. Early electricity was intensely local: a generator, some wires, a neighbourhood. Factories had their own power plants. Towns had their own works. It was messy and inefficient and it was theirs.
Then came the great consolidation. Bigger plants were cheaper per unit, transmission got better, and the logic of the twentieth century took over: build enormous central stations, string wires across the continent, and connect everybody to one machine. It was the right answer, and it was one of the great engineering achievements in history, and it electrified the developed world.
It also left roughly 700 million people waiting for a wire that has never come and, on current trajectories, may never come. For a village a hundred kilometres from the nearest line, the economics of the central grid simply do not work, and it has been told for seventy years to be patient.
What has changed is that the wire is no longer necessary. Solar panels and batteries got cheap enough that a village can generate and store its own electricity for less than the cost of connecting it to a distant grid. The economics inverted, quietly, in about a decade.
For the first time in a century, small is competitive.
What it actually is
A microgrid is a local electricity system — generation, storage, and loads — that can operate connected to a larger grid or independently, on its own, in what engineers call island mode.
That last capability is the whole point. A microgrid is not simply a small grid; it is a grid that can disconnect and keep running.
It serves two entirely different populations, and it is worth keeping them separate.
For the unelectrified, it is not a supplement. It is the grid. A village with solar panels, a battery and a distribution network has electricity — lights, phone charging, refrigeration for vaccines, a mill, a pump — without waiting for a transmission line that may never be built. This is one of the great development stories of our time and it is happening largely without fanfare.
For the already-electrified, it is resilience. When the main grid fails — in a hurricane, a wildfire, an ice storm, a cyberattack — a microgrid at a hospital, a fire station, a water treatment plant or a neighbourhood can keep operating. As extreme weather worsens and grids age, this is becoming less of a luxury and more of an obvious precaution.
The technology that makes both possible is the same: cheap solar, cheap batteries, and smart control systems that can balance a small system in real time without a national operator.
The numbers
The unserved. Roughly 700 million people still have no access to electricity, overwhelmingly in sub-Saharan Africa and South Asia. For a large share of them, extending the central grid is not economic and never will be.
The inversion. Solar fell about 90% between 2010 and 2024 and batteries about 89% between 2010 and 2023. Together these made local generation cheaper than a long wire for a very large number of communities. This is a recent and underappreciated reversal of a century of energy logic.
The resilience case. Grid outages from extreme weather are increasing in frequency and cost across the developed world. A microgrid at a critical facility — hospital, water plant, emergency shelter — converts a multi-day outage into an inconvenience.
The speed. A village microgrid can be installed in weeks. A transmission line takes years to permit and years to build, and frequently is never built at all.
The honest limit. Microgrids are more expensive per kilowatt-hour than a well-run central grid, because they cannot share generation and reserves across a wide area. Where the central grid works, it is usually the better answer. Microgrids win where it does not exist, or where it cannot be relied upon.
Why it matters
There is a village somewhere in the Rift Valley that has been told, for seventy years, that the electricity is coming.
It has not come. It was always going to come next decade, in the next plan, after the next election. And in the meantime children have done their homework by kerosene lamp, and the clinic has had no refrigerator for its vaccines, and the mill has been run by hand, and a generation grew up and got old waiting for a wire.
And then, in about ten years, and largely without anyone deciding it, the price of a solar panel and a battery fell far enough that the village does not need the wire anymore.
That is one of the most consequential things that has happened in our lifetimes and it has been reported as a footnote.
What it means is that for the first time in the history of electricity, a community can simply provide for itself. It does not need to be at the end of somebody’s line, or wait for somebody’s permission, or be judged sufficiently profitable to connect. It needs panels, a battery, some wire, and a decision.
And the same technology, arriving from the opposite direction, is what will keep the hospital running in your town when the storm takes the grid down — which, as the weather gets worse, it increasingly will.
Self-reliance is not a retreat from the world. It is what allows you to help when everyone else has gone dark.
What it actually takes
Financing that fits the customer. The households who most need a microgrid have the least capital. Pay-as-you-go models, mobile money and community ownership are the mechanisms that work, and they were pioneered in Africa, not in Silicon Valley.
Maintenance, which is where projects die. The field is littered with donor-funded solar installations that worked beautifully for eighteen months and then failed, because nobody was trained, no spare parts existed, and no revenue was collected to pay for either. A microgrid is a business, not a gift, and treating it as a gift is how it ends up as scrap.
Regulation that permits it. In many countries the national utility has a legal monopoly on selling electricity, which makes a village microgrid technically illegal. This is a genuine and widespread barrier, and it protects a utility that has no intention of serving that village.
Standards and interconnection. A microgrid that may one day connect to the national grid should be built to standards that allow it. Many are not, and that stranded infrastructure is a waste.
Being honest about the tariff. Microgrid electricity often costs more per unit than grid electricity in the same country. The people paying it are usually poorer. That is uncomfortable, it is a real equity problem, and it is not solved by pretending the cost is lower than it is.
Where it matters most
The East African Rift is the centre of the microgrid world. Kenya, Tanzania and Ethiopia have the most developed pay-as-you-go solar markets on Earth, and the innovation in business models is coming from there, not from the West.
Rural South Asia holds the largest number of people connected to weak, unreliable grids — a different problem from having none, and one that microgrids also address.
The Philippine archipelago and Indonesia are thousands of islands, most of which will never be economically worth cabling. It is the natural geography for this technology.
Puerto Rico and the Caribbean are where resilience became existential. After Hurricane Maria, parts of Puerto Rico were without power for the better part of a year, and the microgrid movement there is not a technology enthusiasm but a response to trauma.
California is where wildfire has made planned grid shutdowns routine, and where hospitals, water plants and fire stations are building microgrids because the central grid can no longer be relied on when it matters most.
How to tell it’s being done well
Who maintains it in year three? This is the question that separates working microgrids from monuments. Trained local technicians, spare parts, and revenue to pay for both, or it will fail.
Is it a business or a gift? Gifts break and are not repaired. Businesses get fixed, because somebody loses money when they do not.
Is it legal? In many countries the national utility holds a monopoly on selling electricity, which makes village microgrids technically unlawful. This has to be dealt with, not ignored.
Can it interconnect later? If the national grid eventually arrives, a microgrid built to compatible standards becomes an asset. One that was not becomes scrap.
What you can do
Anyone
- Roughly 700 million people have no electricity, and for many of them the wire is never coming. Solar and batteries got cheap enough that they no longer need it, and that inversion is one of the most consequential and least reported developments of our time.
- Support organizations doing pay-as-you-go solar. The business model innovation in this field came from East Africa, not from the West.
Communities
- A microgrid is what keeps the hospital, the water plant and the shelter running when the main grid fails, and as extreme weather worsens that is becoming a basic precaution rather than a luxury.
- Community ownership works. It aligns the people who use the power with the people who must maintain it.
Policymakers
- Fix the legal monopoly. In many countries a village microgrid is technically illegal because the national utility holds an exclusive right to sell electricity it has no intention of delivering there.
- Set interconnection standards now, so that microgrids built today become assets rather than scrap if the national grid ever arrives.
- Fund maintenance and training, not just installation. The field is littered with donor-funded systems that worked for eighteen months.
Business and investors
- Pay-as-you-go solar with mobile money is a proven model serving the largest underserved energy market on Earth.
- Resilience microgrids for hospitals, water treatment and emergency services are a growing market in the developed world, driven by worsening weather and ageing grids.
Who is working on this
We are researching which organizations in our directory of 8,493 actively work on this solution, and we only list an organization once we have verified it. That research is ongoing. In the meantime, search the directory yourself:
Questions
What is a microgrid?
A local electricity system, with its own generation, storage and loads, that can operate connected to a larger grid or independently on its own. That last capability is the point: a microgrid is not simply a small grid, it is a grid that can disconnect and keep running.
Who are they for?
Two entirely different populations. For the roughly 700 million people with no electricity, a microgrid is not a supplement, it is the grid, and it arrives in weeks rather than after a thirty-year wait for a transmission line. For people who already have power, it is resilience: keeping the hospital and the water plant running when the main grid fails.
Why are they suddenly viable?
Because solar fell about 90% between 2010 and 2024 and batteries about 89% between 2010 and 2023. Together those made local generation cheaper than a long transmission line for a very large number of communities. After a century in which bigger was always cheaper, small became competitive, and it happened in about a decade.
Are microgrids cheaper than grid electricity?
Usually not, per unit, and it is important to be honest about that. A well-run central grid shares generation and reserves across a wide area, which microgrids cannot. Microgrids win where the central grid does not exist, or cannot be relied upon, not where it works well.
Why do so many rural solar projects fail?
Maintenance. The field is littered with donor-funded installations that worked beautifully for eighteen months and then failed, because nobody was trained, no spare parts existed, and no revenue was collected to pay for either. A microgrid is a business, not a gift, and treating it as a gift is how it becomes scrap.
Are microgrids even legal?
Often, not really. In many countries the national utility holds a legal monopoly on selling electricity, which makes a village microgrid technically unlawful, even in villages the utility has no intention of ever serving. It is one of the most widespread and least discussed barriers in energy access.
Sources
- Project Drawdown - Deploy Microgrids (Drawdown Explorer) Framework and classification. Cited, not reproduced.
- IEA - Access to electricity and SDG7 tracking
- IRENA (2025) - Renewable Power Generation Costs in 2024
- Rocky Mountain Institute - Islands and microgrid resilience
- Sustainable Energy for All
The solution taxonomy follows the framework popularised by Project Drawdown. The analysis above is our own; for their carbon modeling and rankings, visit them directly.