A microgrid is a local energy system with clear boundaries: its own generation (such as solar or wind), often a battery, and the buildings or equipment that use the power. It is run as one system. It can work connected to the grid, and some can also run on their own, in “island mode”, if the grid goes down.

From off-grid to microgrid

It helps to think of a ladder:

  1. Off-grid system. One building or site with its own solar and batteries, and no grid connection at all. Our Victron off-grid systems are at this end.
  2. Private wire. One generator, such as a solar farm, cabled straight to one nearby user. See what is private wire?
  3. Private network. Private cables serving several buildings, usually behind one grid connection.
  4. Microgrid. A private network with several generators, storage and users, all managed together.

Why build one?

  • Resilience. Critical equipment can keep running during a power cut, if the system is designed to island.
  • Lower bills. Sharing local solar or wind across several buildings means more of it is used on site, and some network charges can be avoided.
  • Working around a busy grid. Where the local network can’t take more export, using power on site, with a battery, can unlock more generation.

Real UK examples

  • Isle of Eigg: a community-owned island grid using hydro, wind, solar and batteries, with diesel backup. It has given islanders 24-hour power since 2008, mostly from renewables.
  • The Royal Mint, Llantrisant: a site system combining 2MW of solar, wind turbines, a battery and combined heat and power.
  • Broompark Farm, Glenluce: a dairy farm with 80kW of solar and a battery, set up to export nothing. It got round a 50kW grid limit and saved around £30,000 in five months.
  • Project VOLT, North East England: an Ofgem-funded study for Port of Tyne, Newcastle Airport and others. It estimated microgrids could cut peak demand by up to 30%.

The rules: licences and exemptions

Generating, distributing or supplying electricity needs a licence, unless an exemption applies. Most small schemes rely on “class exemptions”, which apply automatically if you stay within the limits.

  • Generation: exempt up to 10MW per station, and in some cases up to 50MW.
  • Distribution and supply: exemptions cover private networks within set limits, with tighter limits where homes are supplied.
  • If you sell power to other users, you still have duties, such as fair billing, and your customers keep the right to switch supplier.

Getting this wrong can be a criminal offence, and the government won’t advise on individual cases. Take legal advice before supplying power to anyone else.

Grid connection

If your microgrid connects to the public network, its generation and storage need approval from the network operator under G99 (or G98 for very small systems).

Running in island mode needs more: studies and an agreement with the network operator, the right earthing, and switchgear that safely separates you from the grid. The protection must make sure you never feed power into a section of the public network that has been switched off for safety.

Is a microgrid right for you?

A microgrid can make sense if you have:

  • several buildings or users close together, such as an estate, farm, business park or campus,
  • steady daytime demand,
  • space for solar, wind or batteries,
  • a grid connection that is limiting what you can do, or a strong need for backup power.

The downsides are cost, complexity and long contracts, often 15 years or more. For many single sites, simple rooftop solar or private wire is enough.

What we do

We look at your site, your loads and the local grid, and tell you honestly whether a microgrid, private wire or simple solar and battery fits best. We handle the G99 application and planning, and installs are delivered with certified partner installers. Talk to us →

Sources

Facts last checked 8 October 2026. This is general guidance, not legal advice.