Renewable energy is creating a growing interest on a global level. Integration of renewable energy resources into the power grid structure is challenging due to their intermittent nature. Advanced solutions for connection of renewable energy sources (RES) are investigated with the increase in the number of RES. Microgrids offer promising solution for this purpose. Microgrids provide heat and power to a local area through a single controllable system that consists of micro sources and cluster of loads. The single power source is transformed to multiple and bidirectional power sources due to the radial distribution system incorporated with renewable energy technologies. The radial distribution networks and its associated power outages are reduced and the reliability of the system is increased with this model. Various other factors such as power system stability, energy efficiency, demand side management, carbon dioxide emission, computer tools, and economic assessment are compared and the highest potential is identified.