RESEARCH REPORT

Executive Summary:
Nanogrids
Grid-Tied and Remote Commercial, Residential, and Mobile
Distribution Networks: Global Market Analysis and Forecasts
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Published 1Q 2014

Peter Asmus
Principal Research Analyst

Mackinnon Lawrence
Research Director
 Nanogrids

Section 1
EXECUTIVE SUMMARY
1.1 Nanogrid Market Overview
The basic concept behind the nanogrid is simple: small is beautiful. Nanogrids are modular
building blocks for energy services that support applications ranging from emergency power for
commercial buildings to the provision of basic electricity services for people living in extreme
poverty. In many ways, nanogrids are just small microgrids, typically serving a single building
or a single load. Because of the simplicity, the technology requirements for nanogrids are less
complex (in most cases) than those for either microgrids or the utility-dominated smart grid.
Given the diversity of nanogrids applications, it is difficult to sum up what nanogrids mean for
technology innovation, utilities, and vendors of smart grid and distributed energy resource
solutions. Nevertheless, one could view them as building blocks of microgrids. In some cases,
nanogrids represent an alternative path forward to increasing resiliency and renewable content
into onsite power solutions.

Ironically, nanogrids are big business. While microgrids exhibit exponential growth and share
synergistic properties with many nanogrid segments, substantial deployments of nanogrids are
already in place. This is because they actually face less technical and regulatory barriers than
their microgrid counterparts.

Given the lack of consensus on the definition of a nanogrid, Navigant Research has developed
its own classification, with the most critical criterion being size: 100 kW for grid-tied systems
and 5 kW for remote systems not interconnected with a utility grid. While these size thresholds
may seem arbitrary, they have been vetted with vendors in the space and line up with
technology offerings by many of the companies profiled in this report.

In many ways, nanogrids appear to be an even more radical rewiring and rethinking of the
world’s energy future than microgrids. Nanogrids mimic the innovation that is rising up from the
bottom of the pyramid and capturing the imagination of growing numbers of technology vendors
and investment capital, particularly in the smart building and smart transportation spaces.

In other ways, nanogrids are more conventional than microgrids since they do not directly
challenge utilities in the same way. Nanogrids are restricted to a single building or a single
load and therefore do not bump up against regulations prohibiting the transfer or sharing of
power across a public right-of-way.

From a technology point of view, perhaps the most radical idea behind nanogrids is a clear
preference for direct current (DC) solutions, whether these systems are connected to the grid or
operate as standalone systems. The efficiency benefits of minimizing power conversions are
amplified when designing nanogrids to serve the rural poor in the developing world.

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 Nanogrids

Despite the small scale of nanogrid solutions, a number of familiar names are active in these
nanogrid markets, among them Bosch, Eaton, Emerson Network Power, Johnson Controls, and
NRG Energy. While nanogrids can be synergistic with the growing movement toward enhancing
resiliency and therefore complement microgrids, there are times and situations when microgrids
and nanogrids will be competing for the same customers.

1.2 Market Forecasts

Navigant Research forecasts that global nanogrid vendor revenue will reach $37.8 billion by the
end of 2014. Over the next decade, the nanogrid market is forecast to grow to $59.5 billion in
annual vendor revenue. While there are viable nanogrid markets in every region of the world,
the Middle East & Africa represents the greatest near-term and long-term market opportunity,
with revenue forecast to increase from $14.4 billion in 2014 to $25.2 billion in 2023. The Asia
Pacific region, which accounts for the second greatest share of annual nanogrid vendor
revenue, is forecast to climb from $12.8 billion to $20.3 billion over the same timeframe.

Chart 1.1 Total Annual Nanogrid Vendor Revenue by Region, World Markets: 2014-2023

$70,000 North America

Europe
$60,000 Asia Pacific
Latin America
$50,000 Middle East & Africa
($ Millions)

$40,000

$30,000

$20,000

$10,000

$-
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

(Source: Navigant Research)

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Section 8
TABLE OF CONTENTS

Section 1 ........................................................................................................................................................... 1  

Executive Summary .......................................................................................................................................... 1  

1.1   Nanogrid Market Overview .................................................................................................................. 1  

1.2   Market Forecasts ................................................................................................................................ 2  

Section 2 ........................................................................................................................................................... 3  

Market Issues .................................................................................................................................................... 3  

2.1   Mapping the Nanogrid Universe ........................................................................................................... 3  

2.1.1   Lawrence Berkeley National Laboratory Definition .......................................................................... 3  

2.1.2   Ethernet Alliance Vision ................................................................................................................ 4  

2.1.3   Intel’s USB Drives ........................................................................................................................ 5  

2.1.4   Navigant Research Definition ........................................................................................................ 6  

2.1.4.1   Nanogrids versus Microgrids ..................................................................................................... 7  

2.1.4.2   Nanogrids Matter...................................................................................................................... 8  

2.2   Business Case for Nanogrids ............................................................................................................. 10  

2.2.1   Grid-Tied Nanogrids .................................................................................................................... 11  

2.2.2   Remote Nanogrids ....................................................................................................................... 12  

2.2.3   AC Nanogrids .............................................................................................................................. 13  

2.2.4   DC Nanogrids .............................................................................................................................. 13  

2.3   Nanogrid Market Subsegment Landscape ........................................................................................... 14  

2.3.1   Commercial Grid-Tied Nanogrids .................................................................................................. 15  

2.3.2   Residential Grid-Tied Nanogrids ................................................................................................... 16  

2.3.2.1   Case Study: OutBack Power Nanogrid in Snohomish, Washington ............................................. 16  

2.3.3   Remote Residential Nanogrids ..................................................................................................... 17  

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2.3.4   Remote Commercial Nanogrids .................................................................................................... 18  

2.3.5   Mobile Nanogrids ......................................................................................................................... 19  

2.3.6   Military Nanogrids ........................................................................................................................ 19  

2.4   Implementation Issues ....................................................................................................................... 20  

2.4.1   Parallels with Microgrid Movement ............................................................................................... 21  

2.4.2   Contrasts with Microgrid Movement .............................................................................................. 22  

2.4.3   The Ethernet, DC Networking, and Nanogrids ............................................................................... 23  

2.4.4   Third-Party Ancillary Services: Virtual Power Plants ...................................................................... 24  

2.4.5   Demand Charge Abatement ......................................................................................................... 25  

2.4.6   Diesel Price/Solar PV Tradeoffs ................................................................................................... 26  

2.4.7   Bottom of the Pyramid Opportunities ............................................................................................ 26  

2.4.7.1   Case Study: The Impact of Telecom on Remote Nanogrid Business Models ............................... 28  

Section 3 .......................................................................................................................................................... 31  

Technology Issues ........................................................................................................................................... 31  

3.1   Nanogrid Technology Overview .......................................................................................................... 31  

3.2   Distributed Generation ....................................................................................................................... 31  

3.2.1   Diesel Generation ........................................................................................................................ 31  

3.2.2   Solar PV ..................................................................................................................................... 31  

3.2.3   Small Wind Turbines .................................................................................................................... 32  

3.3   Advanced Energy Storage .................................................................................................................. 33  

3.3.1   Advanced Lead-Acid .................................................................................................................... 34  

3.3.2   Flywheels .................................................................................................................................... 34  

3.3.3   Advanced Lithium Ion .................................................................................................................. 34  

3.3.4   Flow Batteries ............................................................................................................................. 35  

3.3.5   Sodium Metal Halide .................................................................................................................... 35  

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3.4   UPS Systems .................................................................................................................................... 36  

3.5   Smart Bidirectional Inverters .............................................................................................................. 37  

3.6   Automated Demand Response ........................................................................................................... 38  

3.7   DC Technology Trends ...................................................................................................................... 39  

3.7.1   DC LED Lighting .......................................................................................................................... 39  

3.7.2   DC EV Charging Technology ........................................................................................................ 40  

3.7.3   DC Plug Loads ............................................................................................................................ 41  

3.7.4   DC versus AC Building Controls: PoE ........................................................................................... 42  

Section 4 .......................................................................................................................................................... 44  

Key Industry Players ........................................................................................................................................ 44  

4.1   Nanogrid Market Vendor Profiles ........................................................................................................ 44  

4.2   Smart Building Innovators .................................................................................................................. 44  

4.2.1   Bosch Group ............................................................................................................................... 44  

4.2.2   Eaton Corp. ................................................................................................................................. 45  

4.2.3   Greensmith Energy Management Systems .................................................................................... 46  

4.2.4   Johnson Controls, Inc. ................................................................................................................. 46  

4.2.5   Power Generation Services .......................................................................................................... 47  

4.3   DC Technology Purveyors .................................................................................................................. 48  

4.3.1   Moixa Technology ........................................................................................................................ 48  

4.3.2   Nextek Power Systems ................................................................................................................ 49  

4.3.3   Pika Energy ................................................................................................................................. 50  

4.4   Energy Storage and Converter System Providers ................................................................................ 51  

4.4.1   Green Charge Networks ............................................................................................................... 51  

4.4.2   Ideal Power ................................................................................................................................. 52  

4.4.3   Sunverge Energy ......................................................................................................................... 53  

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4.5   Remote Nanogrid Players .................................................................................................................. 54  

4.5.1   Emerson Network Power .............................................................................................................. 54  

4.5.2   Flexenclosure .............................................................................................................................. 55  

4.6   Non-Mobile Remote Nanogrid Players ................................................................................................ 55  

4.6.1   Alpha Group ................................................................................................................................ 55  

4.6.2   Trama TechAmbiental .................................................................................................................. 57  

4.6.3   Village Infrastructure.................................................................................................................... 58  

4.7   Mobile Nanogrid Suppliers and EV System Optimizers ........................................................................ 58  

4.7.1   NRG Energy ................................................................................................................................ 58  

4.7.2   Odyne Systems ........................................................................................................................... 59  

4.7.3   TimberRock Energy Solutions ...................................................................................................... 60  

4.7.4   VIA Motors .................................................................................................................................. 61  

Section 5 .......................................................................................................................................................... 63  

Market Forecasts.............................................................................................................................................. 63  

5.1   Nanogrid Market Overview ................................................................................................................. 63  

5.1.1   Microgrids versus Nanogrids ........................................................................................................ 65  

5.2   Nanogrid Capacity/Revenue Relationships .......................................................................................... 67  

5.2.1   Grid-Tied Nanogrids .................................................................................................................... 67  

5.2.1.1   Capacity Forecasts .................................................................................................................. 68  

5.2.1.2   Revenue Forecasts ................................................................................................................. 69  

5.2.2   Remote Nanogrids ....................................................................................................................... 70  

5.2.2.1   Capacity Forecasts .................................................................................................................. 70  

5.2.2.2   Revenue Forecasts ................................................................................................................. 71  

5.3   Subsegment Profiles .......................................................................................................................... 72  

5.3.1   Commercial Grid-Tied Nanogrids .................................................................................................. 72  

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5.3.2   Grid-Tied Mobile Nanogrids .......................................................................................................... 74  

5.3.2.1   Commercial Remote Nanogrids ................................................................................................ 78  

5.3.2.2   Residential Remote Nanogrids ................................................................................................. 79  

5.4   Conclusions and Recommendations ................................................................................................... 83  

Section 6 .......................................................................................................................................................... 84  

Company Directory .......................................................................................................................................... 84  

Section 7 .......................................................................................................................................................... 86  

Acronym and Abbreviation List ....................................................................................................................... 86  

Section 8 .......................................................................................................................................................... 90  

Table of Contents ............................................................................................................................................. 90  

Section 9 .......................................................................................................................................................... 95  

Table of Charts and Figures ............................................................................................................................. 95  

Section 10 ........................................................................................................................................................ 98  

Scope of Study ................................................................................................................................................. 98  

Sources and Methodology ............................................................................................................................... 98  

Notes ................................................................................................................................................................ 99  

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Section 9
TABLE OF CHARTS AND FIGURES

Chart 1.1   Total Annual Nanogrid Vendor Revenue by Region, World Markets: 2014-2023 ............................... 2  

Chart 2.1   Mobile Tactical Microgrid Capacity, United States: 2012-2018 ....................................................... 20  

Chart 3.1   Average Solar PV System Prices (Non-Weighted) by Region, World Markets: 2011-2020 ................ 32  

Chart 5.1   Cumulative Nanogrid Vendor Revenue by Region and Segment, World Markets: 2014-2023 ............ 64  

Chart 5.2   Total Annual Microgrid Capacity by Region, World Markets: 2013-2020 .......................................... 65  

Chart 5.3   Total Annual Nanogrid Capacity by Region, World Markets: 2014-2023 .......................................... 66  

Chart 5.4   Annual Grid-Tied Nanogrid Capacity by Region, World Markets: 2014-2023 .................................... 68  

Chart 5.5   Annual Grid-Tied Nanogrid Vendor Revenue by Region, World Markets: 2014-2023 ........................ 69  

Chart 5.6   Annual Remote Nanogrid Capacity by Region, World Markets: 2014-2023 ...................................... 70  

Chart 5.7   Annual Remote Nanogrid Vendor Revenue by Region, World Markets: 2014-2023 .......................... 72  

Chart 5.8   Annual Commercial Grid-Tied Nanogrid Capacity by Region, World Markets: 2014-2023 ................. 73  

Chart 5.9   Annual Commercial Grid-Tied Nanogrid Vendor Revenue by Region, World Markets:
2014-2023 ................................................................................................................................... 74  

Chart 5.10   Annual Grid-Tied Mobile Nanogrid PEV Capacity Additions by Region, World Markets:
2014-2023 ................................................................................................................................... 75  

Chart 5.11   Total Annual Grid-Tied Bidirectional PEV Capacity Additions by Region, World Markets:
2014-2023 ................................................................................................................................... 76  

Chart 5.12   Annual Grid-Tied Mobile Nanogrid PEV Vendor Revenue by Region, World Markets: 2014-2023 ..... 77  

Chart 5.13   Annual Commercial Remote Nanogrid Capacity by Region, World Markets: 2014-2023 ................... 78  

Chart 5.14   Annual Commercial Remote Nanogrid Vendor Revenue by Region, World Markets: 2014-2023 ....... 79  

Chart 5.15   Annual Residential Remote Nanogrid Capacity by Region, World Markets: 2014-2023 .................... 81  

Chart 5.16   Annual Residential Remote Nanogrid Vendor Revenue by Region, World Markets: 2014-2023 ........ 82  

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Figure 2.1   Megagrid, Milligrid, Microgrid, and Nanogrid .................................................................................. 4  

Figure 2.2   Diagram of Key Nanogrid Components........................................................................................... 7  

Figure 2.3   Enernet: Connecting Nanogrids to Microgrids and Macrogrids ......................................................... 9  

Figure 2.4   Map of U.S. Stock of Net Zero Energy Building State Locations ..................................................... 15  

Figure 2.5   The Link between Solar PV Cost Declines and the Rise in Mobile Phone Usage ............................. 23  

Figure 2.6   Current Addressable Off-Grid Energy Markets ............................................................................... 27  

Figure 2.7   Expansion of Mobile Phone Networks vs. Electricity Expansion Worldwide: 2000-2012 ................... 28  

Figure 3.1   Green Telecom Tower Deployments, World Markets: 2009-2013 .................................................... 39  

Figure 3.2   Optimizing Plug Loads in Commercial Buildings ............................................................................ 41  

Figure 4.1   Bulk Generation Retirements Totaling 59 GW ................................................................................ 48  

Figure 4.2   Depiction of REbus Home Grid-Tied DC Nanogrid ......................................................................... 51  

Figure 4.3   Size Comparison between Conventional Converters and Ideal Power Converters ............................ 53  

Figure 4.4   TTA’s Nanogrid/Microgrid Deployments ........................................................................................ 57  

Figure 4.5   GM eMotor Plant Nanogrid ........................................................................................................... 61  

Table 2.1   Grid-Tied Nanogrids SWOT Analysis ............................................................................................ 11  

Table 2.2   Remote Nanogrids SWOT Analysis ............................................................................................... 12  

Table 2.3   AC Nanogrids SWOT Analysis ...................................................................................................... 13  

Table 2.4   DC Nanogrids SWOT Analysis ...................................................................................................... 14  

Table 2.5   Current Market Drivers and Barriers by Region for DC Power Grid-Tied Nanogrids ......................... 24  

Table 3.1   Operating and Cost Characteristics of Energy Storage Technologies for Nanogrids: 2013 ............... 33  

Table 4.1   Bosch Group SWOT Analysis ....................................................................................................... 45  

Table 4.2   Nextek Power Systems SWOT Analysis ........................................................................................ 50  

Table 4.3   Sunverge Energy SWOT Analysis ................................................................................................. 54  

Table 4.4   Emerson Network Power SWOT Analysis ...................................................................................... 55  

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Table 4.5   Alpha Group SWOT Analysis ........................................................................................................ 56  

Table 4.6   NRG Energy SWOT Analysis ........................................................................................................ 59  

Table 5.1   Annual Grid-Tied Nanogrid Vendor Revenue by Region and Revenue Ranking, World Markets:
2014 vs. 2023 .............................................................................................................................. 69  

Table 5.2   Annual Remote Nanogrid Vendor Revenue by Region and Revenue Ranking, World Markets:
2014 vs. 2023 .............................................................................................................................. 71  

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Section 10
SCOPE OF STUDY
Navigant Research has prepared this report to provide participants involved in the development of nanogrids
with a market forecast of this emerging market, profiles of key innovators, and a summary of the technology
pros and cons of different market segments. A special emphasis is placed on contrasting nanogrids with
microgrids, the latter topic a focus of Navigant Research for the last 5 years. The study also augments the
research conducted by Navigant Research on DC distribution networks. Its top objective is to address the
capacity and corresponding annual vendor revenue for the following nanogrid markets: commercial grid-tied
nanogrids; grid-tied mobile nanogrids; commercial remote nanogrids; and residential nanogrid developments in
the developing world. Five major global regions (North America, Europe, Asia Pacific, Latin America, and the
Middle East & Africa) are covered and the market forecast extends through 2023.

The report’s purpose is not to provide an exhaustive technical assessment of the technologies and industries
described. Rather, it aims to offer a strategic examination of the market for nanogrids from an overall tactical
business perspective. Navigant Research strives to identify and examine new market segments – such as
grid-tied and remote nanogrids – to aid readers in the development of their business models.

SOURCES AND METHODOLOGY

Navigant Research’s industry analysts utilize a variety of research sources in preparing Research Reports.
The key component of Navigant Research’s analysis is primary research gained from phone and in-person
interviews with industry leaders including executives, engineers, and marketing professionals. Analysts are
diligent in ensuring that they speak with representatives from every part of the value chain, including but not
limited to technology companies, utilities and other service providers, industry associations, government
agencies, and the investment community.

Additional analysis includes secondary research conducted by Navigant Research’s analysts and its staff of
research assistants. Where applicable, all secondary research sources are appropriately cited within this
report.

These primary and secondary research sources, combined with the analyst’s industry expertise, are
synthesized into the qualitative and quantitative analysis presented in Navigant Research’s reports. Great care
is taken in making sure that all analysis is well-supported by facts, but where the facts are unknown and
assumptions must be made, analysts document their assumptions and are prepared to explain their
methodology, both within the body of a report and in direct conversations with clients.

Navigant Research is a market research group whose goal is to present an objective, unbiased view of market
opportunities within its coverage areas. Navigant Research is not beholden to any special interests and is thus
able to offer clear, actionable advice to help clients succeed in the industry, unfettered by technology hype,
political agendas, or emotional factors that are inherent in cleantech markets.

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NOTES
CAGR refers to compound average annual growth rate, using the formula:

CAGR = (End Year Value ÷ Start Year Value) (1/steps) – 1.

CAGRs presented in the tables are for the entire timeframe in the title. Where data for fewer years are given,
the CAGR is for the range presented. Where relevant, CAGRs for shorter timeframes may be given as well.

Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and
sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2014 U.S.
dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.

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Published 1Q 2014

©2014 Navigant Consulting, Inc.

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