Ready for a Wild Hurricane Season? Renewable Microgrids Are.

As stronger weather events become the new normal, renewable microgrids can keep power flowing, lower emissions, and facilitate economic development.

An abbreviated version of this piece was featured in The Miami Herald on June 4, 2024.

Community members in areas with increasingly extreme weather like Florida, Texas, and Puerto Rico are fed up. Every couple of years a powerful storm hits, causing extended power outages, putting safety at risk, and damaging buildings and key infrastructure. Though it is a matter of when, not if, these storms will come again, as soon as the clean-up is finished, leaders move energy resilience and preparedness to the back burner and the cycle continues with the next storm.

But there is a way to lessen the blows. Energy technologies like solar and battery storage have proven time and again to provide reliable power, and now they are more affordable than ever. So why aren’t leaders scaling them up for resiliency ahead of impending extreme weather?

Extreme weather is the new normal

While hurricane season did not officially begin until June 1st, this pattern started to play out this Spring. Take Texas, for example. Last month, thunderstorms, powerful winds, and flood-inducing rain knocked out power to over 800,000 people and caused seven casualties. After the storm, temperatures climbed to over 90 degrees, and those that were without power could not run their air conditioning in the stifling heat. Just a couple of weeks later, more extreme weather hit Texas. Having to deal with multiple storms is not unique to Texas — in Florida, there were three named hurricanes over two months in 2020.

Unfortunately for the over 60 million people that live in hurricane-affected geographies, more weather events like this are likely on the way. Forecasts from leading experts for the 2024 season are “daunting.” High ocean temperatures along with weather affected by the El Niño and La Niña patterns led the National Oceanic and Atmospheric Administration to their highest May prediction of hurricanes ever. Given increasing ocean and air temperatures, stronger weather events have become the new normal.

Communities in these regions are eager for energy resilience solutions, and solar-plus-battery-storage microgrids — designed to keep power flowing during a storm, lower emissions, and facilitate economic development — are ripe for the call. They allow one or several connected buildings to generate, store, and use energy within their site, with or without power from the grid. In an outage, the electricity created by these systems keeps refrigerators running, phones charging, air conditioners cooling, and houses and businesses lit up. Excess electricity is simultaneously stored in batteries to be used for times when the sun isn’t shining. When the power returns, these systems can also provide electricity to the broader grid.

A proven, vetted technology

Military bases, hospitals, fire stations, and other critical service providers have been turning to solar-plus-storage microgrids for years, and for good reason. They know that in an outage, external entities dealing with multiple crises and fossil fuel supply chains are not reliable. The US Army plans to build a carbon pollution-free microgrid at each of its 130 bases worldwide by 2040 to keep up critical defenses in the event of a natural disaster or an attack on the US power grid.

When Hurricane Ian hit Florida, Georgia, Virginia, and the Carolinas in 2022, more than two million people lost power — but microgrids kept critical services running at hospitals, universities, homes, and businesses.

A seismic shift in microgrid financials

New incentives paired with dropping equipment prices mean that there has never been a better time for community leaders to build solar-plus-storage microgrids.

Despite recent inflation challenges, the price of solar for commercial projects is less than half what it was a decade ago, dropping from $3.83 per watt in 2013 to $1.62 per watt in 2023. Battery prices also recently hit a record low in 2023: $139 per kWh compared to $780 in 2013.

Not only is this technology getting cheaper, but there are more government incentives than ever to help cover costs, for both before a storm hits and during the rebuilding process. A few of the most exciting funding opportunities for community microgrids include:

1. Investment and Production Tax Credits: Part of the Inflation Reduction Act (IRA), these tax credits are now applicable to more organizations and can cover 30–70 percent of a microgrid’s cost. Tax-exempt entities that provide key support during weather events including nonprofits, local governments, and Tribes can now receive these benefits as direct payments.
2. FEMA funding: Earlier this year, the Federal Emergency Management Agency announced that it would cover 75 percent of clean energy costs, including solar and battery storage, when state and local government entities rebuild in impacted areas — a huge shift from the previous approach of rebuilding to the pre-impacted state.
3. The Greenhouse Gas Reduction Fund: This $27 billion dollar EPA program supports the development of clean energy projects like solar-plus-storage microgrids and home systems in underserved communities throughout the United States. The fund also includes support for community lenders to provide affordable project financing.

These new funding streams mean that it may be cheaper for a church or government to finance a solar-plus-storage microgrid than pay the utility every month for all their electricity. Beyond the monthly savings, payments toward a financed microgrid keep resources in communities and go toward a new asset will improve the financial health of the owning organization.

Microgrids can save money for customers on the “macro” grid, too

Microgrids can also benefit customers on the broader grid when the skies are clear. A utility program run by Green Mountain Power (GMP) in Vermont demonstrates this “win-win” solution perfectly. The utility offers customers a discount to purchase or lease batteries in exchange for sharing access to the battery. Customers can use the batteries to store solar power or keep power flowing during an outage, and when market prices or the demand for electricity is high, GMP can deploy those batteries to release some of their stored power to the grid. Discharging the connected network of batteries in these scenarios results in cost savings that directly benefit customers. During a heatwave in July 2022, GMP sent a command to the network of batteries to release some of their electricity to the grid, creating $1.2 million in savings.

In this way, a solar-plus-storage microgrid can function as part of a virtual power plant (VPP) — a collection of distributed energy resources like home and business batteries, solar arrays, and smart thermostats that balance electricity demand and supply on the grid and support reliable grid operations. A report from the Brattle Group found that across the United States, using VPPs rather than building new large power plants could save up to $35 billion.

It’s Time for a Proactive Approach to Energy Resilience

Community leaders, city planners, and utilities need to ask tough questions before storms arrive. Where in my community should renewable microgrids be built to keep people safe in the next hurricane? How can we use the funding now available to pay for microgrids? This hurricane season will bring resiliency planning to the front burner for a short while — let’s use that time wisely.

Please reach out if you are interested in developing renewable microgrids in the community or communities that you serve: mliebman@rmi.org and mcowart@rmi.org.

Top image: Members of the RMI team and local partners at a community solar-plus-storage microgrid in Puerto Rico.