Grid-Forming Inverters
March 2026
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Overview
Grid-forming inverters are power electronic devices that autonomously set and maintain grid frequency and voltage, imitating the behavior of synchronous generators. Unlike grid-following inverters that require a grid reference to inform their operation, grid-forming inverters can operate off the grid, and through their synthetic inertia and damping can enhance grid stability, especially in networks with high penetration of variable resources. Some grid-forming resources are also capable of providing black start services, but require additional design considerations to ensure that the resource can provide sufficient current availability to support inrush and energization demand. Grid-forming control functionality can be incorporated in inverter-based resources, static synchronous compensators (STATCOM), and high-voltage direct current (HVDC) converter stations. These features enhance grid stability, enable grid-independent generators and microgrids, and can boost grid resilience against disruptions as opposed to grid-following inverters.
The International Electrotechnical Commission (IEC), the Institute of Electrical and Electronics Engineer (IEEE), and the European Network of Transmission System Operators for Electricity (ENTSO-E) have introduced guidelines and standards such as the IEEE Std. 2800 – 2022 and the ENTSO-E technical requirements for grid-forming capability[1]. Within the North American Market, the Universal Interoperability for Grid-Forming Inverters (UNIFI) Consortium, which is co-led by the National Laboratory of the Rockies, the University of Texas-Austin, and the Electric Power Research Institute, have released a specifications document for grid-forming inverter-based resources[2]. These outline performance metrics that grid-forming inverters should meet, such as for frequency control, tolerance for rate of change of frequency, fault ride-through, and other performance capabilities to ensure stable grid operation. On ramps for these technologies to interconnect with the electric grid are still being developed at the regional level and industry compliance with these standards is still a work in progress.
Although there are no large grid deployments within the contiguous United States, pilot projects using grid-forming inverters have been performed to demonstrate their capabilities and large scale studies have been performed to assess the grid impact if grid-forming functionality was enabled for all in system battery resources. Grid-forming pilot projects include the 1 MW Zurich Battery Energy Storage Systems (energy company owned) in Switzerland in 2012, the 1 MW Ausnet Grid Energy Storage Systems (energy company) in Australia in 2012, the 200 MW Mackinac High-Voltage Direct Current (America Transmission Company owned) in the US, 0.8-15 MW SMA projects in Europe/USA, Dersalloch Wind Farm in Europe in 2019, 150 MW Hornsdale Power Reserve (Neoen owned) in Australia in 2017-2020, ESCRI-SA project (Electranet owned) in Australia, GE projects in the US in 2017-2019, the 0.1-0.72 MW OSMOSE Project in Europe in 2018, the 20 MW ABB PEGS in 2020, and the Fluence-Siemens Project in Europe in 2021[3]. The rated power of these demonstrations differs based on the type of application, ranging from less than 1 MW to 200 MW.
Benefits
Voltage and Frequency Regulation
These inverters can impose well-defined voltages at the point of connection, providing a stable foundation for grid operation.
Synthetic Inertia
They can provide synthetic inertia, a physical property that helps to resist frequency fluctuations.
Autonomous Operation
By being able to set and regulate frequency/voltage they give microgrids the ability to operate independent of the grid. This can also provide a stabilizing contribution to weak portions of the transmission system that have grid-following resources interconnected in close electrical proximity.
Black Start Capability
They can re-energize and restore power grids from a total blackout or islanding events due to disturbances, without support from external grids. This capability needs to be considered at the design stage as this can require increased project sizing to meet energization demand during black start conditions.
Fault Ride-Through
Since they establish their own frequency/voltage, they can ride-through faults better than grid-following inverters whose operation can be impacted during disturbances.
Technology Readiness Level (TRL)
- Final system completed
- Tested and validated under expected conditions
- Near operational readiness
- Design essentially finalized
While grid-forming technology has not been widely integrated with variable resources, they are commercially available in battery storage systems. There are several commissioned projects, and more being planned for integration with the transmission system. Primary limitation is full specification of requirements.
From a technology standpoint, grid-forming inverters are largely ready for rollout. The early adoption and continuous development put grid-forming inverters in TRL 8.
Adoption Readiness Level (ARL)
Value Proposition
Delivered Cost
Medium Risk
Grid-forming inverters have upfront costs estimated to exceed those of grid-following inverters. This is due to their advanced functionalities, such as synthetizing their own frequency/voltage. Nonetheless, in the long run, the initial cost can be offset by the benefits they provide. Although these additional functions offer long-term system benefits, there is currently no market structure that explicitly compensates resources for providing grid-forming capability. Batteries are a comparatively straightforward application because they typically maintain the headroom necessary for full grid-forming operation. As markets evolve, grid-forming resources my eventually gain expanded opportunities for participation, particularly as their ability to support grid stability and black start capabilities become more widely valued.
Functionality Performance
High Risk
There is limited established bodies of experience for operating power systems with high integration of grid-forming inverters, especially on how they will interact with each other and legacy assets like the synchronous generator-based generations[4]. Inverters have current injection limitations. Current limiters would be present to prevent damage to inverters, but recommend referring to their limited current injection capabilities. The control trade-offs needed for one type of grid (e.g., a weak grid) can compromise performance in another, and a universally performing controller is still an open research question. Also, multi-vendor coordination, restrictive proprietary firmware, and lack of detailed public models can cause unforeseen control interactions among inverters and with legacy assets.
Ease of Use/Complexity
High Risk
Compared to grid-following inverters, grid-forming inverters are more complex to implement, require advanced controls for grid stability and synchronization, and may involve challenges like meeting regulatory requirements and coordinating with different inverter types. Testing and validations can be challenging due to limited availability of models from manufacturers and compliance discrepancies between standalone testing and actual grid performance. Grid-forming inverters need stable DC sources, which makes early adoptions to be with batteries rather than variable sources.
Market Acceptance
Demand Maturity/Market Openness
Medium Risk
Grid-forming inverters are becoming increasingly adopted by the industry due to their critical role in ensuring reliable grids. Battery storage grid-forming inverters are mature (such as Tesla and Fluence) but utility-scale applications with variable resources are emerging. New standards like the UNIFI Consortium specifications and MISO have been developed to formalize requirements and support future advancements[2].
Market Size
Medium Risk
According to the Fortune Business Insights, the global grid-forming inverter market is valued at $788.50 million in 2024 and expected to grow from $858.53 million in 2025 to $1,579.10 million by 2032, with a compound annual growth rate of about 9.10%[5]. The market is expected to continue to grow due to the need for reliable power grids.
Downstream Value Chain
Low Risk
Grid-forming inverters will eventually become widely adopted in integration, services, applications that leverage their unique abilities to autonomously stabilize the grid. It is expected that their use will increase in microgrids, utility-scale batteries, hybrid plants, and will be adopted by transmission and distribution operators, utilities, and commercial, industrial, and residential users.
Resource Maturity
Capital Flow
Low Risk
Grid-forming inverters are attracting increasing investments in research and development aimed at addressing the technical challenges being faced. This includes private investments by manufacturers, developers and utilities, ancillary services revenue, and project financing. There is also public funding through federal grants and government incentives.
Project Development, Integration, and Management
High Risk
Grid reliability is an eminent concern; hence regulatory frameworks and incentives are expected to drive the adoption and deployment of grid-forming inverters. This needs derisking considering that there is limited operational experience on power systems integrating many grid-forming inverters. Lack of openness from manufacturers on models and firmware can hamper testing that will support large scale integration and management.
Infrastructure
Medium Risk
Grid-forming inverters can be deployed in existing power grids, on- and off-grid microgrids, pilot projects, utility-scale batteries, and testing and validation programs. Key challenges include limited experience on interactions with existing assets, not having universal standards and controls, proprietary restrictions, regulatory and market frameworks that have not evolved to create business incentives, and complexity with testing and validations.
Manufacturing and Supply Chain
Medium Risk
Grid-forming inverters rely on components like IGBTs, MOSFETS, capacitors, resistors, FPGAs, control boards, and heat dissipating hardware[6]. Key challenges include high cost of domestic manufacturing and low-cost manufacturing abroad, but this appears to be changing due to government incentives and legislation like the Bipartisan Infrastructure Law.
Materials Sourcing
High Risk
Semiconductors are critical for manufacturing components like IGBTs, MOSFETS, and FPGAs. While silicon wafers and polysilicon are produced domestically, supply chain for advanced components like gallium nitride (GaN) and silicon carbide (SiC) are mostly imported.
Workforce
Medium Risk
The US has a good workforce in the power electronics sector, but existing skills must be adapted and specialized for designing and implementing grid-forming control. Grid operators and utilities must be trained in how grid-forming inverters operate and differ from legacy generators and grid-following resources and how to manage resources using grid-forming controls.
License to Operate
Regulatory Environment
Medium Risk
While there are no restrictions on using grid-forming inverters, push back may come with the sources that they use, be it with batteries or variable resources. Also, there are mandated performance requirements that grid-forming inverters must meet. These include the ability to ride-through faults and demonstrate stable operations, as required by FERC, the UNIFI Consortium specifications, IEEE 1547, and IEEE 2800[7][8]. More operational regulations are expected in the future.
Policy Environment
Low Risk
Government policies and incentives are expected to drive the adoption of grid-forming inverters to enhance grid resilience and support the growth of microgrids and battery storage systems.
Permitting & Siting
Medium Risk
While grid-following inverter-based resources are widely established, transitioning them to grid-forming operation typically requires updates to interconnection or grid-operator agreements rather than permits. Retrofitting a grid-following resource may also necessitate improvements to controls and communications systems to ensure stable operation under grid-forming functionality. The siting of new grid-forming inverter-based resources, particularly lithium-ion battery systems, may face heightened community opposition due to concerns about fire risks, potential emissions during thermal-runaway events, and the associated wildfire hazards that have been raised for similar installations.
Environmental & Safety
Low Risk
There are no known environmental risks associated with using grid-forming inverters, but safety concerns may arise from new grid dynamics and inverters’ inherent current limitations. This can be mitigated through specialized expertise in grid-forming control and mandating overcurrent headroom on inverter capacity. Adoption level may trigger protection system functionality review based on changing dynamics of generation resources.
Community Perception
Low Risk
Case Studies & Implementation
ERCOT assessment of grid-forming resources
ERCOT’s August 2023 assessment of grid-forming resources explores the benefits of integrating grid-forming inverters within inverter-based energy storage resources to enhance grid stability under weak-grid conditions. This assessment leveraged detailed simulations across three scenarios: a simplified weak grid, West Texas with high IBR penetration, and a local area facing N-1 and N-1-1 stability challenges. Overall, the assessment highlights grid-forming inverters ability to add virtual inertia and enhance dynamic performance, while noting the need for sufficient headroom and coordinated controls.
https://www.ercot.com/files/docs/2023/08/11/GFM_ERCOT_IBRWG%2808112023%29.pdf
A new grid bridging system tested at ACEP to serve villages in Alaska
ACEP is testing a 1MW/1 MWh grid-bridging battery system to support local sourced energy integration and reduce diesel use in St. Mary’s and Mountain Village, Alaska. This system uniquely connects directly to the grid without a transformer and operates in both grid-following mode and grid-forming mode. During testing, the inverter successfully demonstrated black-start capability and seamless transition between grid-following and grid-forming operation, both as a standalone source and in parallel with diesel generators. This deployment marks the first grid-forming inverter in Alaska and showcases its ability to provide spinning reserve, improve system resilience, and enable higher locally sourced energy penetration in remote microgrids.
References
- Energy Systems Integration Group. Grid-Forming Landscape. [Online] Energy Systems Integration Group. [Cited: March 2, 2026.] https://www.esig.energy/working-groups/reliability/grid-forming-landscape/.
- UNIFI Working Group on Specifications. UNIFI Specifications for Grid-forming Inverter-based Resources Version 3. Golden, CO : National Laboratory of the Rockies, 2026. NLR/TP-5D00-98381.
- UNIFI Consortium. GFM Around the World. UNIFI Consortium. [Online] UNIFI Consortium, 2022. [Cited: March 2, 2026.] https://unifi-consortium.github.io/GFM_Map/.
- Electric Power Research Institute. Performance Requirements for Grid Forming Inverter Based Power Plant in Microgrid Applications: Second Edition. s.l. : Electric Power Research Institute, 2022. 3002024431.
- Fortune Business Insights. Grid-Forming Micro-Inverter Market Size, Share & Industry Analysis, By Application (Residential Solar Installations and Commercial Solar Installations), and Regional Forecast, 2026-2034. s.l. : Fortune Business Insights, 2026. Report ID: FBI113335.
- Barlow, Isaiah, Stewart, Emma Mary and Culler, Megan Jordan. Analysis of Supply Chain Challenges in the U.S. Solar Industry: Focus on Build America, Buy America Act and Inverter Supply Issues. Idaho Falls, ID : Idaho National Laboratory, 2024. INL/RPT-24-82448-Revision-0.
- IEEE Standards Association. IEEE Standard for Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces–Amendment 1: To Provide More Flexibility for Adoption of Abnormal Operating Performance Category III. [Online] IEEE, September 5, 2020. [Cited: March 2, 2026.] https://standards.ieee.org/ieee/1547a/7696/. IEEE 1547a-2020.
- Addressing Grid Reliability As Renewable Energy Integration Speeds up. [Online] IEEE Standards Association, April 26, 2022. [Cited: March 2, 2026.] https://standards.ieee.org/beyond-standards/addressing-grid-reliability-as-renewable-energy-integration-speeds-up/. IEEE 2800.
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