Cost Savings of Microgrids in California

Microgrids are an excellent opportunity to save money on energy by producing electricity onsite. The design and installation costs of microgrids are offset by the savings that California industries will experience with lower power grid demand. 

Are you wanting to know how much you could save on energy costs in California by developing a microgrid for your business? Keep reading to discover the savings potential of microgrid systems.

This Access Electric blog post will explain the commercial and industrial cost savings potential of microgrids in California. We’ll also explain why California cost savings from microgrids may be significantly higher than other nationwide projected averages. 

Read The Benefits of Microgrids to discover more information about microgrids.

Commercial Cost Savings of California Microgrids

The total cost savings of a microgrid in California depend on how much energy the system is able to generate. The average price for commercial-use electricity from the power grid in California is 28.11 cents per kilowatt hour (kWh), so savings for microgrid-generated energy add up quickly.

To put these prices in context, a standard commercial refrigerator uses about 17,000 kWh of electricity per year. At 28.11 cents per kWh, the annual cost of energy from the traditional grid for one commercial refrigerator in California is $4,778.70.

For a single commercial 132-watt LED lamp, the annual energy cost is $325.04. Multiply that amount by every LED lamp, and you’ll discover how lighting alone costs you from the traditional power grid. The expense is much higher if you haven’t upgraded to LED lighting.

Microgrids can generate power from multiple sources, including renewable sources like solar energy and wind turbines. Other options include gas generators and combined heat and power (CHP) systems. These sources are combined with a battery to collect and save energy for later.

Solar Energy Commerical Cost Savings in California

A single solar panel produces a very low estimate of 250 watts of energy per hour. Large, newly installed panels are likely closer to 500 watts per hour. A large array of solar panels has a big potential energy savings when the price for commercial-use electricity is over $0.28 per kWh in California.

Once the energy has covered the panels' upfront cost and installation, the rest represents savings for your business.

Industrial Cost Savings of California Microgrids

The total cost savings from a microgrid in California’s industrial sector depend on what power-generating sources are used. 22.05 cents is the average cost of a kWh of electricity in California for industrial use from the traditional grid, the cost savings potential is high.

Industrial Cost Savings with Solar Panels in California

Microgrids that incorporate solar panels benefit from the cost savings of solar-generated electricity. Large 96-cell solar panels can generate up to 500 watts of electricity every hour. A large array of solar panels on top of an industrial complex can generate a lot of energy and provide savings.

To hold on to these savings, a microgrid will also use a battery to store solar energy for future use, like at night, when the solar panels are unable to produce electricity. 

Microgrid Benefits in California vs USA

California is the ideal location for commercial and industrial microgrids because the energy cost savings in California are higher than anywhere else in the country. California is also an ideal location for microgrids because the solar radiation makes solar panels a great microgrid inclusion.

Energy Prices in California Are Higher than the Rest of the USA

Energy prices increased more from 2022 to 2023 in California compared to other West Coast states and nationwide. These energy price increases affected California's residential, commercial, and industrial customers.

We’ll focus on the cost increases in the commercial and industrial sectors.

The nation experienced a decrease in the average price of commercial use electricity, while the West Coast and California experienced dramatic increases. You can compare the commercial use energy price increases in the following table:

Commercial Energy Cost Changes from 2022 to 2023


West Coast Average

Nationwide Average

13.75% increase

11.84% increase

1.04% decrease

Industrial-use electricity prices increased across the nation, but the increase was much higher for the West Coast and California in particular. You can compare the price increases for industrial-use electricity in the following table:

Industrial Energy Cost Increases from 2022 to 2023


West Coast Average

Nationwide Average

12.61% increase

10.04% increase

6.35% increase

California Is Great for Solar Energy

The other factor that makes California a great location for microgrids is California’s solar energy potential. California has more solar radiation for photovoltaic energy potential than other states along the coast of the Pacific Ocean. Microgrids with solar panels are a great option.

In fact, California and the Southwest have the highest solar radiation levels in the United States.


We used the United States Energy Information Administration data to find the average kilowatt-hour prices in California, on the West Coast, and nationwide. We also used estimated averages from to make reasonable energy consumption comparisons and illustrations.

Get Started with Microgrid Planning

Don’t miss out on energy savings by waiting too long to develop your microgrid in California. Access Electric provides microgrid services in Fresno CA, Stockton CA, Modesto CA, and the surrounding areas. Contact Access Electric online or call (209)-577-1491 to get started. 

There’s more to be gained than just cost savings with microgrid installation. Microgrids are the perfect way to incorporate renewable energy sources, and they have more benefits than backup power alone.

Frequently Asked Questions

How cost-effective are microgrids? 

Microgrids can be exceptionally cost-effective for businesses in states with high energy prices, like California. Microgrids allow for multiple sources of power generation and batteries to store generated electricity for later use. Many locations have grants to offset the upfront cost of microgrids.