Evaluating Investment in Grid-Connected Microgrid Under Policy and Technology Risks

There are many proven advantages of microgrid deployment, such as energy cost saving, resiliency, and reduced carbon emission. However, microgrids are relatively new, complex, and require high initial investment costs. For this reason, risks associated with the investment should be thoroughly accessed during the planning process. In this paper, we investigate the impacts of policy and technology risk on microgrid investment. In particular, we examine the effect of changing incentives policies and technology performance assumptions. We used MDSTool to design a grid-connected microgrid for three different types of commercial buildings assumed to be located in the state of California. Our results show that policy and technology risks can have a big impact on the net present value of the investment.