Researchers at UC San Diego have published a comprehensive study analyzing business models for microgrids in Southern California, exploring how technology, energy costs, and policy interact to shape the economics of decentralized energy systems. The study appears in the journal Energy Policy and was conducted by a multidisciplinary team affiliated with UC San Diego’s Deep Decarbonization Initiative and Center for Energy Research.

Led by doctoral researcher Ryan Hanna, the team used real-world cost data and an optimization framework to model microgrid configurations for three building types: a commercial building, a hospital, and a campus. The results showed that without targeted policy intervention—such as carbon taxes or renewable incentives—natural gas remains the most economically viable energy source, raising concerns about long-term emissions from decentralized fossil fuel use.

The study identifies key levers that influence microgrid adoption, including electricity and natural gas prices, carbon taxes, and battery storage costs. It also underscores the importance of aligning private investment incentives with climate goals to avoid unintended carbon lock-in.

The research highlights how energy policy, economics, and engineering must work together to ensure microgrids support—not hinder—the transition to a low-carbon grid. Future work will explore reliability, resilience, and geographic policy differences.

Read the full article:

https://today.ucsd.edu/story/microgrid_business_models_analyzed_in_uc_san_diego_study