For the burgeoning microgrid market, the sweet spot has been university, industrial and military applications. But now, the suitability of this advance in energy resilience is expanding, and residential neighborhoods are being eyed as another ideal fit.

Before microgrids will proliferate in communities across America, however, utilities need to know the value microgrids can provide in better serving customers. Alabama Power is doing just that with its “Smart Neighborhood” microgrid pilot in the Birmingham suburb of Hoover.

Alabama Power has been operating the project’s community-scale microgrid since December 2017 for research and demonstration purposes. The microgrid includes a small solar array, lithium-ion batteries and a natural-gas generator. The microgrid was designed, engineered and deployed by PowerSecure, an EPC+ microgrid developer with over 2 gigawatts of operational microgrid capacity in the U.S.

Alabama may be dipping its toes into microgrids, but the Southeast leads the nation in installed microgrids overall, primarily for resilience in states such as Florida and North Carolina, according to Wood Mackenzie Power & Renewables. The total U.S. installed microgrid capacity is expected to reach nearly 9 gigawatts by 2024, according to WoodMac’s most recent microgrid forecast.

The 62 homes in the Smart Neighborhood project are more intelligent, more efficient and more automated than the average home in Alabama, or the U.S. for that matter. But it is the neighborhood’s microgrid, a little less than a mile up the road, that truly sets it apart.

A microgrid worth replicating

Smart Neighborhood brings together new-construction homes and a distribution-connected microgrid that allows the entire neighborhood to island from Alabama Power’s traditional electric grid. The smart community is being studied not only by the utility, but also by the U.S. Department of Energy’s Oak Ridge National Laboratory and the Electric Power Research Institute (EPRI). This partnership is part of a research effort to see what the future may hold for energy supply and management in 2040.

The project’s microgrid, which integrates a 330 kW ground-mount solar PV array, a 400 kW natural-gas generator, and a 2+ hour, 300 kW lithium-ion battery storage system, is the first of its kind in Alabama. It’s also an early model of where the microgrid market may be going as prices of energy storage come down and utilities continue to explore the evolution of their service to customers. 

“As utilities plan their infrastructure investments, they are seeing utility microgrids as viable resources that can bring value to their customers, especially in the commercial and industrial sector,” said Joe Gammie, business development engineer with PowerSecure.

That future, however, is still being engineered when it comes to residential microgrids. Even five years from now, WoodMac forecasts the majority of microgrid capacity will be for commercial microgrids for large C&I customers. PowerSecure is confident, however, that microgrid deployments can benefit customers of all kinds.

“We are able to integrate varying distributed energy technologies optimized for the value within the specific application, including incorporating PowerSecure equipment with outside manufacturers,” said Gammie.

But PowerSecure does not wait for commissioning to fine-tune the integration of the disparate assets of its microgrids. As a vertically integrated company, it brings together its manufacturing, engineering and commissioning teams from day one to look at how to maximize any given system for specific operational and financial outcomes.

In Alabama, the early results are promising, with the microgrid being designed and built in less than 10 months.

“What we’ve seen is that a lot of the anticipated value streams, including power factor optimization and solar firming, have been operating even better than initially expected,” said Gammie. 

Of course, it’s all much easier when you’re able to work with the servicing utility and build the supply and demand infrastructure from the ground up with the latest technology and coordination across all stakeholders. For most of the U.S., however, microgrids have to contend with existing infrastructure with various states of connectivity and efficiency.

“This does give us a little bit of a bubble,” said Kyle Butler, VP of horizontal markets at PowerSecure, who recently spoke about the project at GTM’s Grid Edge East conference, which took place in Durham. But, he added, the data from the project and coordination between EPRI, Oak Ridge National Laboratory, Alabama Power and PowerSecure will allow teams to know which demand-side measures, such as efficient lighting or heat pumps, would make the most sense to offer communities that would be part of a microgrid. By starting with an ideal scenario, it could also help utilities know what sort of time-of-use mechanisms could help them optimize the system to everyone’s benefit. 

“We’re in a transitional state where we’re going from energy as a static product to energy as a dynamic service,” said Gammie. “It’s a very exciting change in perspective in the way we see the grid’s resources.”