As energy storage solutions continue to decline in cost, it is largely inevitable that distributed energy resources (DERs) will be a critical part of the future electricity grid. In the residential markets, U.S. utilities were slow to embrace the opportunity presented by rooftop solar. They now have a chance to shape the unfolding DER evolution with energy storage. Instead of ignoring or fighting the transition, utilities need to proactively find ways to lead the deployment of these new grid resources for their most vocal and visible customer base: residential customers.
Current DER market traction is largely a result of entrepreneurs and capitalists addressing electricity market inefficiencies. It started with behind-the-meter solar addressing high retail rates. Now energy storage can further decrease customer costs by optimizing behind-the-meter assets and consumption for local tariffs. As with solar, many utilities view this as a challenge to their business. But DERs have been proven to provide valuable benefits to utilities, operators, and the larger grid if planned and coordinated by the grid operator at the distribution level. These benefits include load shaping through additional supply-side and demand-side resources, improved grid resiliency, reduced emissions, and lower cost ancillary services. Indeed, utilities would likely be embracing DERs if frameworks were in place for them to share in — and get compensated for — the benefits DERs provide.