CMS Waiver Opens Hospital Microgrids
- Microgrids Regulatory
Marin Holt
- 0
- 6 minutes read
- CMS issued a Categorical Waiver for Health Care Microgrid Systems, allowing hospitals to use clean-energy microgrids as primary or backup power in lieu of diesel generators.
- The waiver removes a longstanding regulatory barrier: CMS life-safety codes previously required diesel backup generators, blocking microgrid-only designs.
- Eligible clean energy sources include solar PV, battery storage, fuel cells, and combined heat and power (CHP) systems.
- Health Care Without Harm estimates the waiver could unlock hundreds of millions of dollars in hospital clean-energy investment nationally.
- Kaiser Permanente's Richmond Medical Center microgrid — backed by a $4.77M California Energy Commission grant — is an early real-world example of the newly permissible design.
The Centers for Medicare & Medicaid Services (CMS) has issued a Categorical Waiver for Health Care Microgrid Systems that lets hospitals and other CMS-regulated facilities use clean-energy microgrids — solar, battery storage, fuel cells, and combined heat and power — as emergency backup power in place of diesel generators, removing a long-standing regulatory barrier to solar-plus-storage hospital designs. Microgrid Knowledge called the ruling a “seismic shift” in health-facility design.
What Was Announced
According to the CMS memo (QSO-23-11-LSC), various CMS regulations had required facilities to comply with the 2012 edition of the National Fire Protection Association Health Care Facilities Code (NFPA 99), which mandated that emergency power for an essential electric system be supplied by a generator or battery system. The 2021 edition of NFPA 99 permits emergency power to come from other sources, including a health care microgrid system (HCMS) — a small-scale electrical grid drawing on clean-energy technologies such as fuel cells, solar, wind, and energy storage.
CMS is issuing a categorical waiver permitting new and existing health care facilities to use alternate sources of power other than a generator set or battery system, provided they comply with the 2021 edition of NFPA 99, the 2023 edition of the National Electric Code (NFPA 70), and associated references, the agency said. The waiver excludes long-term care facilities that provide life support, which remain bound by 42 CFR 483.90(c)(2) requiring an emergency generator without exception. Health Care Without Harm, which had urged CMS to act, said the change lets health systems “adopt clean energy microgrid technologies for emergency power generation instead of relying on fossil fuel-powered sources” and better leverage Inflation Reduction Act funding.
Why It Matters
The waiver clears the single biggest code obstacle that had blocked microgrid-only backup designs at hospitals. Emily Mediate, Health Care Without Harm’s Climate and Health Program Director, noted that the U.S. health care sector is responsible for 8.5% of national greenhouse gas emissions, so opening emergency power to clean energy is a meaningful decarbonization lever. Kaiser Permanente’s Richmond Medical Center microgrid — backed by a $4.77 million California Energy Commission grant — is an early real-world example of the newly permissible design, and Health Care Without Harm estimates the change could unlock significant hospital clean-energy investment nationally.
Critical Perspective
A categorical waiver removes the regulatory veto, but it does not by itself make clean-energy backup easy or cheap. Hospitals still must demonstrate that a microgrid meets the life-safety reliability bar that diesel generators were trusted to clear, design to the 2021 NFPA 99 and 2023 NEC editions, and finance systems whose upfront cost can exceed a conventional generator even after IRA incentives. The exclusion of life-support long-term care facilities also narrows the addressable market. The open question is how many health systems convert the new permission into deployed projects, and how quickly authorities having jurisdiction adopt the updated code editions the waiver references.
Sources
- Microgrid Knowledge — New Federal Ruling Allowing Microgrids for Health Care Facilities is a “Seismic Shift”
- CMS — Categorical Waiver for Health Care Microgrid Systems (QSO-23-11-LSC)
- Health Care Without Harm — Applauds CMS Waiver for Renewable Microgrids as Hospital Emergency Backup Power
