The cost and performance of distributed energy resources (DERs) have improved faster than anyone would have expected.
Between 2010 and 2017, residential rooftop solar system costs fell over 60%, and lithium-ion battery prices fell 79%. Inverter prices have also fallen, while their functionality has improved in ways that enable the integration of higher penetrations of DERs onto the grid.
Further significant cost reductions are coming, especially on battery prices and soft costs associated with permitting. Though only about 1% of US vehicles are electric today, some forecasts have them as high as 65% of new US vehicle sales in 2050.
These improvements in cost and performance, combined with rising awareness among consumers, and an increasingly unreliable and expensive electric grid, create an opportunity for DERs to provide services in both retail and wholesale markets in ways that can greatly benefit consumers, community resiliency and reliability.
DERs can enable customers to control when and how the energy is used. This provides value to customers in the form of savings, resiliency during outages and predictable pricing while providing valuable demand side resources to the broader electricity grid. This results in less expensive electricity for both the owners of the solar and storage and for all customers on the grid.
All of these benefits need to be maximized, not deterred, which is why the Federal Energy Regulatory Commission (FERC) should continue to enable more opportunities for DERs to contribute to the future of the grid. The rapid customer deployment will not stop — we must unlock the potential of this fleet to create a more efficient grid for all.
The integration of residential DERs into wholesale markets is already taking place in ISO New England territory. Starting in 2022, rooftop solar and battery systems will supply 20 megawatts of energy capacity to ISO New England, involving approximately 5,000 New England homes. This will represent one of the largest uses of aggregated residential solar and storage in the world, and the first in a US wholesale market.
Winning a bid in a forward capacity market validates the ability of distributed solar and battery storage to bring the benefits of clean, renewable energy to New England residents and throughout the country — and to compete on price with legacy resources.
DER systems can be deployed and managed to meet the operational requirements of the ISO market, while also delivering energy savings and backup power to families. This is another step in the transformational shift away from the traditional centralized electricity model, with big power plants, towards a system powered by local clean energy like rooftop solar and batteries.