As the U.S. power grid struggles to keep up with growing demand, commercial real estate owners are facing increasing risks from energy instability.
A report from S&P Global projects electricity demand could rise by as much as 50% by 2040. Meanwhile, Goldman Sachs predicts that the surge in AI will drive a 160% increase in data center power needs by 2030. At the same time, weather-related power outages are becoming more frequent—doubling from 2014 to 2023 compared to the previous decade.
For property owners, these challenges carry significant financial implications, from operational disruptions to diminished asset value. In response, many are turning to microgrids—localized, independent energy systems that provide both reliability and financial benefits.
What Are Microgrids?
Microgrids are energy systems located on-site at a property, capable of operating both alongside and independently from the utility grid. They combine various power sources—such as solar panels, battery storage, and backup generators—to deliver consistent electricity, even during grid failures.
Coast Energy, a leader in clean energy solutions, offers fully integrated microgrid systems designed for commercial properties. These systems not only enhance energy security but also help property owners gain control over energy costs and improve asset value.
“Microgrids give commercial property owners greater control over their energy use,” says Tim Popp, SVP of Strategy and Operations at Coast Energy. “They reduce grid dependency, enhance resilience, and boost property value almost immediately.”
A Growing Market
The U.S. microgrid market, valued at $12.47 billion in 2024, is projected to grow to $71.1 billion by 2034—an annual growth rate of over 19%. This growth reflects a rising demand for resilient, on-site power solutions that can address both financial and operational risks for CRE owners.
Financial Impact from Day One
Coast Energy offers its microgrid systems through contractual models requiring no upfront capital investment from property owners. Coast handles the full development and operation of the system, while advanced energy controls ensure the property receives power from the most cost-effective source—solar, batteries, or generators—based on real-time demand and grid conditions.
“The benefits are immediate,” says Popp. “Once operational, a microgrid improves net operating income (NOI) through energy savings and, in some cases, increased lease revenue. And because there’s no upfront cost, property owners can preserve capital for other needs.”
Unlike traditional solar systems, which rely on the grid to stay online, microgrids continue to power buildings during outages, providing uninterrupted energy to tenants and critical operations.
Enhancing Reliability and Resilience
While cost savings are a major driver, many property owners are motivated by the operational reliability microgrids provide. Facilities such as healthcare centers, life sciences labs, cold storage warehouses, and senior living communities require continuous power—something the grid increasingly struggles to deliver.
From 2011 to 2021, power outages increased by 64% over the previous decade, largely due to severe weather and natural disasters, according to Climate Central. These disruptions are expected to become more frequent and costly.
Microgrids offer two key advantages over traditional grid power:
- Reliability through consistent, stable energy supply
- Resilience by keeping operations running during grid outages
“Microgrids automatically take over when the grid goes down, providing longer-duration backup power to energy-critical facilities,” Popp explains.
Meeting Growing Demand
Energy demand is rapidly outpacing the capabilities of the current grid, especially in high-growth sectors like AI, data centers, and EV charging. Many commercial developments are facing delays due to limited utility capacity in their regions.
“The grid is outdated, and transmission infrastructure is falling behind,” says Popp. “Meanwhile, demand for electricity continues to rise. Microgrids are stepping in to close that gap.”
By generating and storing electricity on-site, microgrids offer a dependable, scalable solution for powering commercial properties—without relying on increasingly strained utilities.
Navigating Policy Changes
Recent legislative changes—such as the “Big Beautiful Bill”—are expected to affect the 30% investment tax credit for solar after 2027. However, Popp says the impact on commercial and industrial energy projects is often overstated.
“Microgrid adoption is driven more by property needs than federal incentives,” he explains. “Regardless of policy shifts, the demand for reliable, cost-effective energy solutions is accelerating.”
Coast Energy’s solutions, which combine solar, storage, and backup generation, are built to deliver long-term value that transcends policy changes.
Conclusion
As power demand grows and grid reliability declines, microgrids offer a future-ready solution for commercial property owners. With no upfront capital required, immediate NOI improvements, and operational continuity during outages, microgrids are quickly becoming a strategic energy investment for the CRE industry.
Source: GlobeSt
