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Will Utilities Embrace Distributed Energy?

• Martin LaMonica via

A homeowner who puts solar panels on his roof immediately slashes his monthly electricity bill and gains a measure of independence from the utility. As more distributed energy technologies take hold, utilities in the U.S. are wondering out loud what their future holds.

It’s not just falling prices of solar photovoltaic panels that are slowly moving power generation out to the edge of the grid network. More people are looking at natural gas generators and energy storage systems that complement grid power and provide backup power during outages. And there are more ways to save electricity, such as efficient appliances and reports to encourage efficiency, or demand response to shave peak power use through smart thermostats. (See, Nest Thermostat Slays Peak Power.)  

Earlier this year, industry group the Edison Electric Institute (EEI) published a Disruptive Challenges report outlining the risks to the financial well-being of utilities from distributed energy. It recommends a push to reexamine policies that create incentives for renewable energy, particularly net metering, and advocating pricing changes that ensure utilities can recover the cost of maintaining the physical grid infrastructure.

David Crane, the CEO of NRG Energy, which owns power plants and provides residential utility service, called distributed solar a “mortal threat” to utilities earlier this year. Last week, he predicted that the natural gas industry will “disintermediate the electric power industry” and provide power-generating appliances in people’s homes, which could be fuel cells, microturbines, or types of Stirling engines.


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