Sort of. Battery storage for micro grids can pay off if there’s a market for frequency response services and energy arbitrage (see: Tesla’s Hornsdale Power Reserve in Australia). If your frequency response market is sane, your energy prices are already low (most of the US), and outages cost you little to nothing, entirely true, no one is paying for micro grids.

Now, if you get rooftop solar (which makes fiscal sense in most states), and you get local storage, you get a 26% federal tax credit towards the battery storage if it’s configured to only charge off of solar (although I believe you can precharge off the utility in emergencies with no impact to your tax benefit, Tesla calls this Storm Watch mode). So depending on the market, you skip the utility and go straight to the end user (as Tesla does with solar and PowerWalls). Again, this is entirely dependent on the local energy market conditions.

I propose that you’ll see micro grids take off as battery prices comes down from EV manufacturing scaling up.

I think you have it pretty much backward. Attaining a power-generation level necessary to be off the regular grid is not that hard. And becoming independent of PG&E would have serious benefits to a city of about any size at this point given the serious economic cost of unreliable power.

The problem is the cost, logistics and legalities of an alternative grid. Every place that is on PG&E power currently would have to gain control of the PG&E power poles and spend the money needed to modernize them. That is a huge cost.

Don’t forget to add this - if you’re operating as a utility you will be regulated as a utility.

I.e., PUCs and other regulators owned by the incumbent utilities will seek to end your existence.

That’s the gist but the surprising thing is that the incumbents and the PUC’s have created a sort of toxic scheme with rate base accounting that is now showing itself in the form of aging and poorly maintained infrastructure.

> Every place that is on PG&E power currently would have to gain control of the PG&E power poles and spend the money needed to modernize them. That is a huge cost.

And, after dealing with all that infrastructure, add a substation capable of disconnecting and reconnecting a town or city to the primary PG&E grid since they need that for consistent power anyway.

Or, they could just stay connected to the PG&E grid like now and spend nothing.

And, as a side benefit, you don't have to deal with the local town politics to try to get this through. Really. I have stories and stories of people who simply tried to bring broadband to their little towns and the fiasco that it always became--partially because of the telcos but often the locals were worse.