Microgrid Deployment Issues

As demand for resilient energy grows across sectors—from AI data centers to EV fleet depots—microgrid deployment is accelerating. But even the most well-designed systems can be delayed by critical hardware shortages and fragile supply chains. This article identifies and ranks the top bottlenecks slowing microgrid rollouts, with a focus on transformers (limited by GOES steel availability), power electronics (driven by SiC/GaN chip constraints), and other components like smart switchgear, BESS, and control systems. Understanding these constraints is essential for developers, integrators, and policymakers working to scale energy faster than the traditional grid can keep up.

Here are the top supply chain bottlenecks impacting microgrid deployments (and grid modernization efforts as well):

Supply Chain Bottlenecks

1. Transformers (GOES): Due to grain-oriented electrical steel (GOES), there are extremely long lead times (18 months+) and fragile steel supply chains. There is a single company in the U.S. that produces GOES.

2. Power Electronics (SiC/GaN): Fab capacity is limited with high demand competition from the EV and AI sectors.

3. BESS Batteries (LFP): Global competition for lithium cells, EV sector competition, shipping constraints, and tariff concerns.

4. Smart Switchgear: Long lead time, complex integration, and low vendor diversity for smart/solid-state units.

Solid-State Transformers

Solid-state transformers (SSTs) are a promising alternative to conventional GOES-based transformers—but they do not eliminate the need for GOES, at least not entirely yet. SSTs perform voltage conversion and additional functions using high-frequency switching components (SiC or GaN), instead of relying entirely on magnetic flux in a traditional GOES-core. They dramatically reduce size and weight by operating at tens or hundreds of kHz, vs. 50/60 Hz in GOES-core transformers. However, as noted before, SiC and GaN compnents are themselves a bottleneck as well.

They are a still-emerging technology not widely deployed outside certain use cases. They typically more expensive per kVA than legacy transformers and need robust cooling for the power electronics. Most current models are at the LV/MV level (480V to 13.8kV), so are ideal in BESS, EVSE, and some building-level microgrids.

SSTs can help alleviate GOES bottlenecks, but they are not yet a full replacement at scale—especially for high-voltage or utility-side interconnects. They are, however, extremely promising for next-gen microgrids, DC-native systems, and modular deployments. Expect adoption to grow in 2026–2030 as costs fall and reliability improves.