This paper addresses the major challenges involved in realizing a reliable, enclosure-based Subsea Electric Grid System (SEGS) for tidal energy farms. Tidal energy has the major advantages of predictability over other nonconventional energy sources and has no carbon emissions. Tidal energy policies have been the main driver for tidal energy project developments, and successful qualifications of high capacity marine current turbines have provided the confidence to establish tidal farms. Transmitting turbine-generated power to the shore power network by laying dedicated umbilical cables is not an economical and reliable solution, as this requires the establishment of local enclosure-based SEGS. This receives power from the multiple turbines in the farm, synthesizes it to the required power levels, and transmits it to the shore power network using a single power take-off umbilical. SEGS breakdowns lead to power production losses, and system retrieval for repair and maintenance is costly and time consuming—and therefore, these systems need to be robust. This paper describes the major technical challenges, such as reliability-centered configuration, efficient interconnection methods, enclosure environment management, and biofouling. Emerging technological advancements are reviewed, and it is found that with the present technical maturity, a single SEGS could handle up to 10 turbines with a mean time between failure of 8.5 and 5.1 years with AC and DC take-off, respectively.