Nestled between a spruce hedge and a hazel hurdle fence on Stone Edge Farm, a 16-acre estate in Sonoma County, Southern California that has been owned by the McQuown family for 30 years, are five white boxes. Each the size of a large fridge-freezer, they are home batteries. Together they can store enough power to run the average US home for a month and, connected to 516 solar panels, they form the farm’s microgrid — a small-scale autonomous power plant — which, for most of the year, generates and stores all the electricity the property needs, and more.
Supported by roughly a mile of cabling, the system feeds the estate’s 16 buildings, which include the 11-room main house, offices for the family’s wine estate located nearby, additional homes for the caretaker and property manager, several barns, and a workout studio. For most of the year, the microgrid is ‘‘islanded”, operating independently of and disconnected from the local grid. In 2017, when wildfires ravaged the area — forcing the McQuown family and their staff to evacuate for 10 days — the microgrid hummed along unaffected, controlled through a mobile phone.
For Michael Charters, who oversaw the microgrid’s day-to-day running for the McQuowns until recently, it illustrates a possible future for home-generated electricity. “Worldwide, society is moving away from centralised power to decentralised power, where [homeowners] are able to make and store their power [at] home,” he says.
Once the preserve of eccentric doomsday preppers and sustainable energy nerds, a future of widespread home-level microgrids like Stone Edge Farm’s (even on a much reduced scale) feels tantalisingly close. Helped by falling home battery prices — those storing a day’s worth of power for the average UK home are around £5,000 — pioneering individuals, communities and cities are creating blueprints for self-supporting microgrids. But if the technology exists and governments are supportive, why are microgrids taking so long to become more commonplace?
By reducing reliance on large-scale electricity grids, microgrid homes promise cheaper power, a more secure electricity supply and a faster shift to cleaner energy, helping to cut the roughly one-fifth of global CO2 emissions generated by residential buildings. In the UK, they could unlock much-needed housebuilding, too.
But since they do remain connected to national or large-scale grids, they can be topped up with power if needed (usually in winter), have the option to sell back excess energy and can (if they are able to “island” like Stone Edge Farm) keep running if their own microgrid fails.
In the UK, microgrids received a boost in March when the government announced £200mn of new funding for solar panels and other clean energy produced in schools, hospitals and communities. A requirement for solar panels on every new home from 2027, which the government is reportedly currently considering, could add momentum. It joins similar incentives across nations to generate energy, or use it more efficiently, and subsidise the cost of equipment such as solar panels, electric heat pumps and insulation.
However, at a macro level, adding renewable energy sources like solar to large-scale grids makes the job of balancing supply and demand harder. Out of balance, the risk of blackouts, such as the catastrophic power cuts which struck Spain and Portugal last month, increases.
At the micro level, household grids are a mixed blessing. On the one hand, each is a new source of renewable energy to be balanced. On the other, individual homes using and storing their own energy help by asking less of the grid. “Multiple households doing this can make a large difference to the system nationally,” says Jake Barnes, senior researcher at Oxford university’s Environmental Change Institute.
Besides losing at least 8 per cent of the energy it carries, the UK’s electricity grid is hugely resource intensive, costly and slow to expand. The drag this provides to new housebuilding is one that microgrids promise to relieve.
“Until recently, the grid was the biggest barrier to building new housing,” says Susan Brown, leader of Oxford city council, pointing to the nearby town of Bicester, where a development of 7,000 new homes and a commercial zone has wrestled with significant delays awaiting confirmation that the grid can supply it. Developments in Milton Keynes, Swindon, Cambridge and Peterborough — with whose officials she works as part of the Fast Growth Cities group — have been facing similar problems, she notes.
“Microgrid homes must still be connected to the grid, but because they generate energy, their demand is roughly half that of a typical home,” says Damon Rand, founder of Cepro Energy, which has built two microgrids since 2020 for new housing developments in Bristol and Bridport, serving a total of 87 homes.
This year, Rand’s biggest source of inquiries has been from larger developers concerned about the government’s Future Homes and Buildings Standards — rules, due to be introduced this year, which require new homes to fuel heating and hot water from low-carbon sources. “If this ban on gas boilers in new homes comes through, developers won’t be able to fall back on gas for heating, so they are getting worried about connecting to the electricity grid in time for people moving in,” he says.
Rand also points to microgrids’ lower energy bills. The Bridport scheme, completed in 2022, now provides residents with electricity at a 25 per cent discount to the current Ofgem-capped price (of 27.03p/ kWh). In February, UK energy provider Octopus, together with housebuilder GS8, announced it would build a 113-home development in Essex where residents will enjoy zero energy bills for the first five years, courtesy of pre-fitted electric heat pumps, solar panels and batteries in each home.
But speaking to Rand, it is soon clear that building a microgrid is incredibly complicated, and mired in red tape. It means joining up a web of grants, rebates and incentives schemes — the equipment running the Bristol project was all bought by an impact investing fund in Oxford, for example — as well as cutting deals with energy providers to whom Cepro must sell excess energy, to keep residents’ bills low. Then there is selecting the right solar panels and other equipment to meet projected householder demand.
Finally, there is the challenge of building the operating system that decides when solar power should be used, when it should be stored and when it should be sold back into the grid. Configuring a microgrid in this way is crucial to achieve the benefits.
It’s a similar story on a smaller scale. At Stone Edge Farm, the microgrid took a team of highly skilled specialists to build; today several people are responsible for running it.
Given the challenges, individual homeowners like Henry Pelly are struggling to install their own, even on a reduced scale.
Pelly was living on a houseboat in Battersea, south London, with his wife and child in 2020 when he saw an advert for Salmestone Grange, a 14th-century Grade II*-listed former monks’ retreat in Margate, Kent. It was the renovation project the couple had been looking for. It was also draughty as hell.
The main accommodation was a two-floor Georgian construction inside one of the 700-year-old halls. Its loft, without a thread of insulation, revealed the roof’s internal beams, blackened by the soot of the open fire. The bedrooms leaked heat so fast that even after a night with the radiators on full blast, the temperature had only reached 15C. With Pelly’s wife expecting their second child, he needed a solution.
But understanding what was out there was a crapshoot. Local contractors warned heat pumps were too inefficient for an old home — a misconception so common that it even featured in the heat pump installation course taken by Pelly’s engineer. When Pelly insisted on installing one, the quotes he received overestimated the required pump capacity, increasing the cost of the unit from £11,500 to £20,000 (courtesy of data from his smart meter, he knew exactly how much heat the home required).
“So much of what I was told was just wrong,” he says. Despite his expertise — Pelly works as a sustainability consultant at a large engineering company — finding genuinely knowledgeable contractors took months. “The knowledge for installation is still niche.”
But Pelly persevered. His gas bill has shrunk from £3,360 per year to zero. Restrictions imposed by his Grade II* listing means he has no solar panels but, thanks to 40kWh of batteries, he can take advantage of a variable electricity tariff, buying power in the middle of the night at a fraction of what it would cost him during the day when he uses it. Add in the greater efficiency from the heat pump, and his electricity bill is virtually unchanged from what it was before the upgrade.
After government grants, the pump and batteries cost a little over £21,000, money he will recoup from lower bills in about six years. Then, he’ll be £3,360 better off every year, even before you add what the microgrid may add to the resale value of the home.
As home running costs have moved up buyers’ priority lists, microgrids have become a plus, according to estate agents. Stephanie Clarke, director at Savills, who specialises in country houses in Scotland, says: “Buyers may not know much [about microgrids] at first, but when they understand how solar, batteries, heat pumps and so on in a home can reduce heating and other bills it becomes a selling point.”
“I’ve done it to get a warm, low-cost house; the [reduced] emissions part is a cherry on top,” says Pelly.
Mindful of the labyrinthine task facing individual homeowners, a few enterprising local governments, particularly in the US, are creating schemes that not only deliver microgrids’ potential, without Pelly’s pain, but set out a blueprint for the future.
As in the UK, US homeowners must navigate a maze of financial incentives, including grants and tax breaks from federal, state and city authorities. With single-home microgrids still rare, they also face local officials and neighbourhood groups unfamiliar with the safety requirements of bulky hardware, and suspicious of how it looks, according to Peter Asmus, a self-confessed energy wonk, who battled for more than a year for permission to install a microgrid at his home in Sonoma County, California.
“If everyone has to go through what I did to get a rooftop solar photovoltaic (PV) system and a Tesla Powerwall [home battery] installed, we as a society are clearly doomed,” he says.
To avoid these pitfalls, successful schemes start by building their own community energy utilities, offering residents an alternative to the local commercial provider (typically there is only one in the US). The power plants on which these are based are residents’ own homes — as well as other local buildings — which host the solar panels, home batteries, heat pumps and other infrastructure. What Cepro has done with 54 homes in Bridport, an American city might do with 50,000.
Among the latest to attempt such a project is Ann Arbor, the Michigan city of 120,000 residents. On November 5, alongside their vote for the next US president, 79 per cent of them endorsed a new city-run local power utility that is promising a cheaper, cleaner, more reliable alternative to the current commercial provider.
The first phase will support the rollout of solar panels, heat pumps and batteries in individual homes. A geothermal community heating network is also planned, but it depends on a federal grant pledged before President Trump took office, which now looks uncertain.
“By 2030, the plan is to power the city entirely by renewably generated power,” says Missy Stults, the city’s sustainability and innovations director. With a smaller electricity grid to maintain, the new utility will reduce the power outages that have become a bane for householders and businesses, she adds. “In 2023 we had three consecutive days without power. The fire station had to manually lift its doors.”
Stults, like many microgrid proponents in the US, points to the success of the community-owned utility in Washington DC. Helped by the scheme, which was established in 2011, rooftop solar panels on apartments, schools and government buildings today account for more than half of all the electricity generated in the district. Thanks to financial incentives for homeowners, equipment suppliers and other companies, the utility claims to have saved citizens and businesses roughly $1.4bn.
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One beneficiary is 29-year-old Victor Ramos, who has installed a microgrid in the home he bought in May 2023. Since Washington escapes the worst of the east coast winter cold snaps, an electric heat pump — which operates at lower temperatures than gas boilers — is enough to heat water for his central heating, replacing the old gas boiler. A second heat pump runs his air conditioning in the warmer months, replacing the unit that packed up the day after he moved in.
The 36 solar panels on Ramos’s roof were bought and installed for free by a company that is paid according to how much power it generates by the Washington DC district government, under its solar scheme. Ramos gets his solar-generated electricity for free.
The two heat pumps were free under DC’s subsidies programme; a new pilot project paid for a home battery, which stores some of Ramos’s surplus solar power for later use. Most of these financial perks are available to DC residents earning less than $86,650 per year, rising to $123,750 for a family of four. Ramos’s average bills for electricity and gas (he retains a small gas cooker) have fallen from $135 to $8 per month, he estimates.
Unsurprisingly, given the savings, he has become a microgrid advocate among his friends — four of whom now have solar panels. “It’s amazing to think I’m saving all this money and contributing to one less new oil or gas-fuelled power plant.”
The Washington scheme shows how far co-ordinated government effort and smart financial incentives can harness the latest technology and specialist expertise. Ramos’s case might feel too good to be true, but is it really?
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