DERs offer multiple benefits to the electric grid. Each new connection increases the system’s overall value. As more customers and devices join the network, the grid becomes stronger and more resilient than the sum of its parts. Beyond value, DERs enhance reliability by placing power generation closer to where it’s needed. This improves access to energy during peak demand and outages. When managed effectively, DERs provide local generation, energy storage, and load balancing. These features help utilities manage dynamic rates and reduce system stress. They also reduce transmission and distribution losses. This improves energy efficiency and lowers environmental impact.
According to Wood Mackenzie, solar power accounted for 37% of all new generation projects in the first half of 2020. Solar power purchase agreements also increased. By 2025, solar is expected to make up two-thirds of the U.S. DER market. The wind sector saw similar momentum during the same period. Whether deployed as DER or in centralized generation, both solar and wind allow utilities to deliver clean, reliable energy. These sources help meet customer demand and support the broader shift to renewable electricity. Together, they make a major environmental impact—especially as climate change takes center stage.
FERC Order No. 2222 allows regional transmission organizations (RTOs) and independent system operators (ISOs) to let DERs compete in wholesale energy markets. Although its full impact is still unfolding, this rule supports the shift to distributed energy. It also aims to lower costs and improve grid reliability. Utilities are using new tools to assess the cost and benefits of DERs by location, technology, and provider. Many are planning based on projected load growth and market dynamics. As DER adoption continues, utilities will explore new partnerships. They will also modernize systems to deliver cleaner, more efficient electricity.





