The rise of distributed energy resources (DERs) marks a pivotal shift in how we generate power. As the power generation sector embraces decentralization, technologies like solar panels, wind turbines, batteries, and fuel cells are becoming more commonplace, especially among commercial, industrial, and residential users eager for cleaner energy solutions. The Federal Energy Regulatory Commission’s Order 2222, issued in 2020, has further catalyzed this movement by opening U.S. wholesale energy markets to these innovative technologies. This is not just a trend; it’s a fundamental transformation in energy generation.
Alan Robertson, head of development at Sunrock Distributed Generation, sheds light on the policies that could propel the growth of DERs. He emphasizes that predictability is paramount. Developers need a clear, multi-year roadmap to invest in long-term projects. Without this clarity, the risk of investment becomes too high, stalling potential progress. Federal policies, particularly tax benefits like the investment tax credit (ITC), have created a conducive environment for DERs. The Inflation Reduction Act (IRA) established a 10-year roadmap that has drawn significant investment into the sector. Losing this predictability would be detrimental.
At the state level, net metering policies can be instrumental, although their implementation varies widely. Massachusetts serves as a prime example with its Solar Renewable Energy Credit (SREC) program, which spurred a substantial increase in solar deployment. Meanwhile, Maine’s rapid rise in DER adoption—jumping to 60% market penetration in just a few years—illustrates the potential of effective net energy billing programs. However, the state’s frequent legislative changes slowed progress, highlighting the need for stable policies that can sustain momentum.
When it comes to which DERs hold the most promise, solar energy stands tall. With over a decade of familiarity among stakeholders, solar technology is poised to remain a cornerstone of the DER landscape. The infrastructure and supply chains supporting solar deployment are now well-established, making it easier than ever to integrate into existing systems. On the horizon, battery storage is gaining traction as a crucial ally to solar. As battery technology matures, its integration with solar systems will enhance reliability and flexibility, addressing the growing demand for energy.
Successful deployments of DERs provide valuable lessons. Green Mountain Power in Vermont has launched an innovative storage program that incentivizes ratepayers to adopt batteries for demand response services. California, despite its controversial NEM 3.0 net metering policy, has mandated that new residential constructions be ready for solar systems, setting a precedent for growth. The state’s streamlined permitting processes further illustrate how reducing friction can accelerate DER adoption.
Utilities have a vital role to play in this landscape. By collaborating with DER developers, they can smooth out the interconnection process, a common stumbling block for new projects. Moreover, DERs can enhance grid stability, addressing challenges like frequency regulation and demand response. It’s clear that the future of energy generation lies in a collaborative approach, where utilities, developers, and policymakers work together to realize the full potential of distributed energy resources. This is not just about cleaner energy; it’s about reshaping the very fabric of our energy system for a more sustainable future.
