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Decentralized Grid

Microgrid and DER Developers Are Pursuing More Complex Projects to Overcome Loss of Federal Incentives

by Elisa Wood

Xendee’s 2026 Market Survey
Xendee’s 2026 Market Survey
January 21, 2026
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Companies working in the microgrid and distributed energy industry felt an immediate harm from the loss of federal incentives after passage of the One Big Beautiful Bill Act (OBBBA) last year, but they remain bullish about the market going forward, according to Xendee’s 2026 Market Survey.

In fact, survey respondents anticipate growth in their use of almost all distributed energy resource (DER) technology types in their projects, with increases expected between 4% to 12% for resources like solar, wind turbines, biogas, batteries, natural gas generators, fuel cells, and hydrogen electrolyzers.

When the OBBBA became law in July 2025, many industry experts feared solar-heavy distributed energy development would dry up with the loss of federal incentives. However, with rising electricity prices and demand forecasts throughout the U.S. from data centers, advanced manufacturing, and building and vehicle electrification, strong market fundamentals and demand for DERs and microgrids remain.

The survey of distributed energy and microgrid industry professionals indicates developers are working to overcome the loss of federal incentives and other challenges by pursuing project complexity to stack value and achieve required returns on investment. In essence, the industry is maturing, shifting from a reliance on subsidies to a focus on the true value a project can deliver.

To maximize project value, development may be trending from simpler solar and storage projects to more complex microgrids. Due to the overall growing demand for electricity, more capacity is required and electric grids can’t supply all of it. Thus, more microgrids are needed to bridge the gap. The need for microgrids means developers’ projects are becoming more complex, deploying a wider range of resources to capture more market opportunities and create greater value.

Complexity isn’t for the faint of heart or simplistic approaches, though. For organizations to continue to exist in an era of slimmer margins, they must manage complexity with sophisticated modeling approaches and tools as well as integrated control strategies so that projects meet financial requirements to move forward at every stage.

The secret to project success will be found by those organizations that can build successful combinations of tools, strategies and partners to reap the value of complexity; not be hamstrung by it.

Download Xendee’s 2026 Market Survey—Microgrid and Distributed Energy Projects Grow in Complexity: Developers Pursue Value to Overcome Federal Incentive Loss—for more insights on how distributed energy and microgrid leaders see the industry evolving to meet financial and organizational objectives.

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