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Recent inflation reports and increases in interest rates confirm what consumers everywhere are experiencing — the cost of living is rapidly rising. Energy costs are the single most important factor in rising inflation. If we can stabilize those costs, we can begin to rein in inflation.
A solution to stabilize energy prices is within our grasp. Acting now can also make the energy we need become more reliable, efficient and local in the long term. That solution is renewable microgrids: localized grids composed of interconnected solar panels or micro wind turbines and storage units like batteries with the ability to disconnect and serve communities if the larger grid isn’t working. More and more common among homeowners, businesses and critical facilities, microgrids provide a path forward to lock in affordable energy prices and facilitate the transition away from reliance on coal, gas and oil, a critical reason for global conflicts and energy insecurity.
Microgrids are increasingly becoming part of a new, modern electrical energy system as communities, businesses and government institutions see them as unique solutions to meet the demand for clean, resilient and efficient energy. From Connecticut to California, and Alaska to Puerto Rico, renewable microgrids are addressing an increasingly unreliable power grid and protecting against high-impact events such as hurricanes, earthquakes and wildfires as well as cyberattacks. Lawmakers across the political spectrum are seeing how investing in this technology can help their cities and states become more resilient against these types of disasters.
It’s not just good policy, it’s good politics. Not only can microgrids buffer us from the inflationary impact of volatile oil prices, but they can also add to employment and economic growth. In a recent report, our organizations RMI and the Millennial Action Project, along with Guidehouse, found that renewable energy microgrids, largely based on solar and battery storage, can create 500,000 new jobs while increasing GDP by $72 billion. According to the report, every $1 million invested in renewable energy microgrid assets will create 3.4 skilled jobs and $500,000 in economic benefits. California alone is forecast to create over 166,000 jobs by 2030, generating over $22 billion in GDP.
At the same time, all the customers and users of those microgrids are replacing volatile prices for diesel or electricity with a fixed asset generating power and creating value. Microgrids are cost-effective, even at today’s power and fuel prices. In a world with strained global supply chains and markets, the added disruption from climate change will likely only increase volatility and inflation.
We can look to Puerto Rico for how renewable microgrids can be transformative. In Puerto Rico, where long-running economic recession persists and the scars of extreme storms are fresh, the electricity costs are over 60 percent higher than the U.S. average, and have increased nearly 50 percent this year. With a commitment earlier this year from President Biden and Gov. Pedro Pierluisi, the path is now clear for Puerto Rico to add thousands more resilient and clean microgrids and protect against immediate cost pressures as well as reduce community risks in a destabilized climate. In California and Texas, the recent extreme weather events have encouraged many to seek funding for microgrids, including appeals in Congress, while utilities are finding new ways to sponsor and integrate these solutions.
American voters are ready for this new energy paradigm. Voters of all types see a persuasive argument for local, independent, clean and reliable systems. Familiarity and support for microgrids have doubled over the past year. An October 2021 bipartisan survey of 1,200 adults found that today 26 percent of adults are familiar with microgrids, up from 13 percent in 2020. Knowledge of microgrids leads to support; after learning more about microgrids, 79 percent of adults favor increasing the use of microgrids, up from 67 percent in 2020.
Microgrids, based largely on clean energy, are now a proven solution to deal with many of our immediate climate and power threats. The new infrastructure law presents us with the resources to integrate microgrids into a more, modern, reliable and cleaner grid to power our lives.
Additionally, the crisis in Ukraine underscores the urgency of pursuing a new era of energy independence — from other countries, from oil and from climate disasters.
Microgrids have emerged as a key intervention for forward-looking lawmakers, especially younger millennial leaders, to act upon. The technology is there. It’s now time for the political will and policy to follow.
Kaitlyn Bunker is a director at RMI, an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5-degree Celsius future and secure a clean, prosperous, zero-carbon future for all.
Layla Zadaine is president and CEO of the Millennial Action Project (MAP), a nonprofit, nonpartisan organization dedicated to activating the next generation of political leaders to bridge the partisan divide and solve future-focused problems.
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