Rooftop solar and home batteries make a clean grid vastly more affordable
(If you’d rather listen than read, just click Play above.)
Energy nerds love arguing over the value of distributed energy resources (DERs), the rooftop solar panels and customer-owned batteries that are growing more popular by the day. There’s a fight in California right now over the value of energy from rooftop solar, just the latest skirmish in a long war that has ranged over numerous states.
The conventional wisdom in wonk circles is that the value provided by DERs is not sufficient to overcome the fact that the energy they produce is, on a per-kWh basis, much more expensive than that produced by utility-scale solar, wind, and batteries (residential solar is roughly 2.5 times as expensive as utility-scale solar, according to NREL).
For that reason, many wonks view DERs as a kind of boutique energy and argue that public funds are better spent on utility-scale energy.
Turns out: no, that’s wrong. Some groundbreaking new modeling demonstrates that the value of DERs to the overall electricity system is far greater than has typically been appreciated.
The work didn’t get the attention it deserved when it came out in late December, so I want to spend some time with it. First, though, let’s get clear on what we’re talking about.
The misguided battle between centralized and distributed energy
To understand the difference between centralized and distributed energy, it’s important to understand the distinction between transmission grids, the high-voltage power lines that carry electricity over longer distances, and distribution grids, the nests of low-voltage power lines (strung from the familiar brown poles) that carry electricity to local consumers. If the transmission grid is the interstate highway system of electricity, distribution grids are the local road systems that branch off those main trunks.
Centralized energy generally refers to utility-scale power generators (or energy storage) hooked up directly to the transmission grid: coal or natural gas plants, wind farms, solar fields, grid-scale battery stacks, what have you. The big stuff.
Distributed energy consists of anything that generates, stores, or manages electricity on distribution grids: rooftop solar panels, ground-mounted “community solar” arrays, consumer batteries, electric vehicles, building energy management software, and the like. (And then there’s truly distributed energy, in the form of off-grid installations that don’t connect to any larger grid. We won’t be getting into that today.)
To paint in broad and somewhat crude strokes, advocates for centralized renewable energy tend to view advocates for distributed energy as crunchy pastoral proto-hippies who can’t handle modernity. They note that utility-scale energy is cheaper and capable of powering highly energy-dense modern economies, whereas distributed energy is expensive and diffuse.
Advocates for distributed energy tend to view advocates for centralized energy as corporate capitalists in thrall to perpetual growth. They note that distributed energy brings a range of benefits, from resilience and independence to savings on avoided infrastructure, whereas utility-scale energy tends to do greater damage to landscapes and concentrate economic power.
Like many disputes in the energy world, this one has hardened into an identity battle, which is annoying and unproductive, since the answer, like with so many other disputes, is both-and.
Nonetheless, it’s worth noting that advocates for distributed energy have been at something of a disadvantage to date. It can be devilishly difficult to quantify the benefits of DERs, so a lot of the discussion gets into hand-wavey intangibles.
It can be especially difficult to quantify
