Abstract Microgrids integrating local renewable energy sources at low-voltage level show promising potentials in realizing a reliable, efficient, and clean supply of electricity. Further improvements are expected when such a microgrid is operated based on direct current (dc) instead of alternating current (ac) infrastructure for power distribution commonly in use today. Our study aims to systemically quantify the gap between environmental impacts of microgrids at building level using the case study of power distribution within office buildings. For this purpose, a scalable comparative life cycle assessment (LCA) is conducted based on a technical bottom-up analysis of differences between ac and dc microgrids. Particularly, our approach combines the micro-level assessment of required power electronic components with the macro-level requirements for daily operation derived from a generic grid model. The results indicate that the environmental impacts of employed power electronics are substantially reduced by operating a microgrid based on dc power distribution infrastructure. Our sensitivity analyses show that efficient dc microgrids particularly lead to savings in climate change impact emissions. In addition, our study shows that the state-of-the-art scaling rules of power electronics currently used in LCAs leads to inaccurate results. In contrast, the proposed methodology applies a more technical approach, which enables a detailed analysis of the environmental impacts of power electronic components at system level. Thus, it provides the foundation for an evaluation criterion for a comprehensive assessment of technological changes within the framework of energy policy objectives.