Short Answer

Each choice in the mini-grid technical design process has tradeoffs. Solar photovoltaic (PV) systems, for example, are expensive, but operations and maintenance (O&M) needs are low. Biomass systems, on the other hand, are generally less expensive to install but require more maintenance. During the design process, developers need to identify the most important variables for the project and then consider how each choice impacts those variables.

Each part of a mini-grid’s technical design has tradeoffs in cost, O&M needs, ability to provide power on demand, grid connection readiness, load efficiency and load flexibility.


Costs for mini-grid power systems vary significantly with location and technology. Shipping, freight, transportation to the site, import and value-added taxes can have a significant impact on costs. In developing countries, costs tend to be higher. Developing countries may have limited in-country manufacturing bases for mini-grid technology, remote installation sites, additional shipping requirements and/or unfavorable national tax policies for renewable energy generation equipment.

The chart below compares the average costs per kWh of different energy technologies. Costs can vary widely for some technologies, especially geothermal and hydropower, depending on resource development costs. The chart does not reflect the cost of energy storage, distribution or metering.

Energy TechnologyWindHydroBiomassGeothermalSolar PVSolar ThermalNuclearNatural GasCoal
2016 $/kWh





Max: 0.0756
Min: 0.0434
Max: 0.0698
Min: 0.0574
Max: 0.1253
Min: 0.0848
Max: 0.0534
Min: 0.0428
Max: 0.143
Min: 0.0583
Max: 0.3728
Min: 0.1767
Max: 0.1043
Min: 0.0959
Max: 0.1483
Min: 0.0516
Max: 0.1963
Min: 0.1027
Relative cost of energy across energy generation systems.

Compared with diesel and other conventional energy resources, renewable energy-based mini-grids have lower operating costs. On the other hand, capital costs for renewable energy technologies are generally higher because the equipment is more expensive. Hybrid mini-grids take advantage of the benefits of each energy resource while mitigating their disadvantages. Well-designed hybrids have lower input costs and levelized costs of energy (LCOE) as well as fewer price and supply volatility shocks.

Operations and Maintenance Requirements

Different mini-grid technologies have different O&M requirements. Some systems are relatively easy to operate and maintain once installed. Solar PV devices, for example, have no moving parts, so they require little maintenance. Other systems, such as hydropower, are more complex to operate and require ongoing maintenance. Rotating machinery in diesel gen-sets, biomass systems and wind and hydropower generators have greater O&M needs.

Energy storage technologies also vary in their O&M needs. Flooded lead-acid batteries, for example, require regular watering and care, while more advanced batteries like lithium-ion or nickel-metal hydride operate with little maintenance. Since batteries are often the limiting factor in mini-grid operation, battery design and operation requires great care. Misused or poorly maintained batteries must be replaced more often.

Successful mini-grid designs account for O&M requirements—such as financial, equipment and capacity requirements—from the beginning. Developers must budget sufficient funds for O&M and ensure that replacement parts and trained operators are available. The project should have a reliable partner willing to assume responsibility for O&M, and operators need access to spare parts for the mini-grid’s components.

Ability to Provide Reliable Power on Demand

Some power sources provide reliable power on demand better than others. Diesel-powered systems, for example, can provide power whenever users need it, whereas solar PV and wind-powered systems generate power only when solar and wind resources are available. If end users need power on demand, such as for refrigeration or manufacturing, mini-grids based on PV or wind power systems will need energy storage, backup power sources or integration with the main grid.

Grid Connection Readiness

Mini-grid systems that might connect to the national electric grid in the future should be designed with this in mind. Generally, to allow for future grid interconnection, a mini-grid will need to be AC-coupled and use the same voltage as the national grid. Key considerations for interconnecting a mini-grid to the national grid include power quality, institutional requirements and safety. Fortunately, most equipment available for mini-grids is designed to comply with technical standards for grid-connected markets.

Issues to Consider When Interconnecting a Mini-grid to the National Grid
  • Power Quality
    • Synchronization with the national grid
    • Matching the national utility's voltage, frequency and power quality
  • Institutional
    • Compliance with national electrical standards
    • Compliance with the national utility's standard contracts
    • Tariffs to expedite contracting and interconnection
    • National policies for independent power producers (IPPs) connecting to the national grid
    • Impact of reduced demand for utility-generated electricity
  • Safety
    • Compliance with national electrical codes for grid interconnection
    • Ability to stop supplying power to grid during power outages and disturbances (over/under frequency, over/under voltage or phase imbalance)

Load Efficiency and Flexibility

Loads (or energy consumption by end-use devices) are the primary drivers of mini-grid design. To create a project that meets local energy demand, project developers need accurate estimates of anticipated loads, including load flexibility and efficiency.

Some loads are more flexible than others; users can choose when to operate the device. Load flexibility is a good design practice that reduces the impact of power intermittency. Designing for flexible loads includes running planned loads when energy resources are available. For example, users of solar powered mini-grids can concentrate their energy use during the time of day when solar power is at its peak. Similarly, a community might use excess power to pump water to store for later irrigation use. Flexible loads allow projects to install mini-grids with less capacity.

Efficient loads such as energy-efficient appliances require less energy to provide the same services. Two communities might have a similar number of end-use appliances, for example, but a community with efficient end-use equipment would require less electricity.

Developers can invest in load efficiency alongside mini-grid development. Increasing energy efficiency rather than generation and storage nearly always yields high returns. Energy efficiency investments include lighting that uses high-efficiency, light emitting diodes (LEDs) and energy-efficient appliances such as LED monitors, TVs and laptops. The Global Lighting and Energy Access Partnership is an excellent source of information about energy-efficient appliances for off-grid settings.

Putting it Into Practice

Mini-grid Computer Simulations

Computerized decision-making tools can help planners compare different mini-grid designs. The Hybrid Optimization Model for Multiple Energy Resources (HOMER) software, for example, is a specialized decision-making and optimization tool for mini-grids. HOMER combines both engineering and economic analysis. The software can analyze off-grid and grid-connected mini-grids of various sizes, from small village-level power systems to large island utilities. Users can input technology choices to optimize different variables based on the local energy resources and configurations. HOMER can model performance, life cycle cost of energy, carbon emissions and other key factors.

HOMER provides simulations, optimizations and sensitivity analyses.

  • Simulation: HOMER simulates a hybrid mini-grid’s operations over an entire year based on locally available energy resources. The user can input dates or import them from the HOMER database.
  • Optimization: The software analyzes all possible combinations of system types (such as solar, wind, diesel and hydro) and then sorts the systems according to the optimization of specific variables.
  • Sensitivity: HOMER compares thousands of possible system combinations in a single run to determine the significance of particular variables. The software allows the user to compare a wide range of mini-grid system configurations and prioritize specific variables and system types.

HOMER offers a free 30-day trial version and training.

Relevant Case Studies

Bamiyan Renewable Energy Program (BREP). BREP developed a large-scale solar PV mini-grid to replace diesel generators in Afghanistan’s Bamiyan region. As of 2017, the system was generating 1 MW of reliable electricity to more than 3,500 businesses, homes and government offices.