Degradation of components and system failure within the microgrid system is deteriorating the performance of electrification. The aim of this study is to discuss the relationship and connections between issues resulting from degradation and deterioration in the microgrid system, in addition to introducing the prominent impacts which may eventually lead to the premature termination of the microgrid system. This study explored the microgrid degradation and deterioration issues within four microgrid sections: generation section, storage section, transmission section, and distribution section. Subsequently, this study analyzes, derives, and classifies all emerging issues into four types of prominent impacts. The degradation and deterioration invoked many component performance issues into four main damaging outcomes, namely (i) deteriorated transmission line yielded issues regarding expected energy not achieved; (ii) energy deficit and unpredicted blackout come after the depth of discharge (DOD) reduction and invoke a loss of power supply; (iii) a shorter battery life cycle, shorter transformer lifespan, and decreased DG lifetime concluded as a shorter microgrid life expectancy; and (iv) rapid microgridbroke down and the crash of the key component inadvertently fastened the time to failure and gave rise to the early failure of a microgrid system. It is envisaged that the discussion in this study can provide useful mapped information for the researcher, stakeholder, operator, and other parties for thoroughly addressing various degradation and deterioration issues and anticipating the early termination of the microgrid system.