Redwood Coast Airport Microgrid
Located in Humboldt County, this was California’s first 100% renewal energy, fron-of-meter customer microgrid.
Analytic Press Release Announcement
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Press Release - Strategic Collaboration with ASU LEAPS
Download "Press_Release_ASU_LEAPS LSedits contact_Version B.pdf"
Microgrid Announcement
PDF
New ASU Collaboration Develops Breakthrough Valuation Framework for Microgrid Financing.
Download "Ptacek Media_Ready_Microgrid_Announcement Final 11 7 2025.pdf"
Definition of Microgrids
A microgrid is designed to improve energy security and reduce reliance on the traditional electricity grid. In many areas now the local service provider can not provide electricity to a new user due to lack of capacity. A microgrid provides a clean power source without interruptions or outages or surges. A microgrid can be connected into the local service provider’s grid, or can be independent in what is known as an ISLAND Mode, where it is entirely self-sustaining. Microgrids enhance energy resilience, efficiency, and sustainability, particularly useful in remote locations or during grid outages.
Current Impact on Commercial Real Estate and Supply of Electricity
Microgrids are currently little used in commercial real estate. The primary reason is that until recently the local electricity service provider could always be dependent upon to supply any needed electricity for any new installation. This is now no longer the case. Many local electricity grids are extremely old, outdated, and not secure. And increasingly users are requiring extremely clean electricity connections that may not now be available. Owners of real estate are realizing that they need to insure to tenants that there will always be electricity service for their businesses.
Typical Components of a Microgrid
Microgrids can have many different components and different iterations. But the following are the most common parts that together makeup a microgrid.
Generator – this is the reliable power source and typically runs 24/7/365. They can be either natural gas, biogas or diesel powered, and in many instances are very large.
Solar Photovoltaic (PV) Panels – these panels convert sunlight into electricity and are typically installed on rooftops or open spaces. High-energy solar PV panels can be integrated into a microgrid to harness renewal energy.
Solar PV Inverters – these convert the direct current (DC) produced by solar panels into alternating current (AC) used in most appliances and installations. Advanced inverters such as hybrid solar inverters can manage energy from both solar panels and battery storage systems.
Battery Modules – these batteries store excess energy generated by solar panels for use during periods of low sunlight or high demand enhancing energy reliability. Lithium-ion battery modules are commonly used due to their efficiency and longer lifespan. A microgrid is considered to be real property. A loan to finance a microgrid can be financed secured by a trust deed.
Current Impact on Commercial Real Estate and Supply of Electricity
Microgrids are currently little used in commercial real estate. The primary reason is that until recently the local electricity service provider could always be dependent upon to supply any needed electricity for any new installation. This is now no longer the case. Many local electricity grids are extremely old, outdated, and not secure. And increasingly users are requiring extremely clean electricity connections that may not now be available. Owners of real estate are realizing that they need to insure to tenants that there will always be electricity service for their businesses.
Typical Components of a Microgrid
Microgrids can have many different components and different iterations. But the following are the most common parts that together makeup a microgrid.
Generator – this is the reliable power source and typically runs 24/7/365. They can be either natural gas, biogas or diesel powered, and in many instances are very large.
Solar Photovoltaic (PV) Panels – these panels convert sunlight into electricity and are typically installed on rooftops or open spaces. High-energy solar PV panels can be integrated into a microgrid to harness renewal energy.
Solar PV Inverters – these convert the direct current (DC) produced by solar panels into alternating current (AC) used in most appliances and installations. Advanced inverters such as hybrid solar inverters can manage energy from both solar panels and battery storage systems.
Battery Modules – these batteries store excess energy generated by solar panels for use during periods of low sunlight or high demand enhancing energy reliability. Lithium-ion battery modules are commonly used due to their efficiency and longer lifespan. A microgrid is considered to be real property. A loan to finance a microgrid can be financed secured by a trust deed.
Examples Installation of Microgrids
Kaiser Permanente Ontario Medical Center Microgrid
The largest hospital-based renewal microgrid in the US, featuring 2MW of solar generation and 9MWh of non-lithium battery storage.
Shadow Mountain Residential Microgrid
A community microgrid in Menifee, California, connecting 219 smart homes with solar-plus-battery systems
US Navy Base San Diego Microgrid
This project includes a 300 kW solar photovoltaic system, a 50 kW emergency generator, and a microgrid controller to enhance energy resilience. Additionally, the Port of San Diego has installed a solar-powered microgrid at the Tenth Avenue Marine Terminal, which supports critical port operations and military logistics.
Appraisal Method
The appraisal of a microgrid is entirely determined based on the electricity charged by the local electricity service provider for that location based on kWh’s.
The valuation is based on a discounted cash flow projection of the microgrid’s cost to produce electricity, and the price per kWh charged by the microgrid to tenants, compared to the tariff currently charged by the local electricity service provider and its projected costs over the economic life of the microgrid – typically 20-years. The microgrid’s costs, and charged billing rate, are typically significantly lower than the local service provider’s tariffs for that location. Therefore, there is typically a positive difference that yields value to the installed microgrid.
Appraisals can be completed as if only for the debt, or also for the alternative method of for the equity ownership using various tax treatments (ITC and accelerated depreciation) and leveraged with mortgage debt.
The appraised value is totally determinative by the charged tariff at that specific location by the local electricity service provider. This is in kWh’s – kilowatt hours. Therefore the Sales Comparison Approach (“SCA”) is in most situations not suitable due to various kilowatt hour rates in the tariff in different locations as well as dissimilar components in different microgrid installations.
The valuation is based on a discounted cash flow projection of the microgrid’s cost to produce electricity, and the price per kWh charged by the microgrid to tenants, compared to the tariff currently charged by the local electricity service provider and its projected costs over the economic life of the microgrid – typically 20-years. The microgrid’s costs, and charged billing rate, are typically significantly lower than the local service provider’s tariffs for that location. Therefore, there is typically a positive difference that yields value to the installed microgrid.
Appraisals can be completed as if only for the debt, or also for the alternative method of for the equity ownership using various tax treatments (ITC and accelerated depreciation) and leveraged with mortgage debt.
The appraised value is totally determinative by the charged tariff at that specific location by the local electricity service provider. This is in kWh’s – kilowatt hours. Therefore the Sales Comparison Approach (“SCA”) is in most situations not suitable due to various kilowatt hour rates in the tariff in different locations as well as dissimilar components in different microgrid installations.
APPRAISED VALUE APPRAISALS REPORTS ARE PREPARED BY EDWARD PTACEK AND ARIZONA STATE UNIVERSITY, ENGINEERING DEPARTMENT, LABORATORY FOR ENERGY AND POWER SOLUTIONS (LEAPS).
Both sign the report.
Microgrid v. Data Center
A data center is a facility designed to house computing equipment, such as servers, network devices, and storage systems. It supports cloud computing, enterprise applications, and internet services. Data centers require significant power to maintain operations, including cooling systems to manage heat generated by the hardware. Their energy demands make them potentially candidates for microgrid integration, which can improve reliability and reduce costs.
Modern data centers are increasingly adopting microgrids to improve sustainability and uptime. Using on-site solar, battery storage, and efficient energy management systems,
they reduce dependence on traditional grids and lower operational risks. Some data centers are shifting from traditional backup generators to microgrid-based energy models that integrate clean energy sources.
Modern data centers are increasingly adopting microgrids to improve sustainability and uptime. Using on-site solar, battery storage, and efficient energy management systems,
they reduce dependence on traditional grids and lower operational risks. Some data centers are shifting from traditional backup generators to microgrid-based energy models that integrate clean energy sources.
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