New APPA Perspective
Paul Zummo is Director of Policy research and Analysis at the American Public Power Association.
Are distributed energy resources making electric utilities and the grid that supports them obsolete? While some argue these new resources will force electric utilities into a diminished role, we believe that the most effective way to ensure the maximum potential of these new resources is an enhanced electric grid managed and operated by electric utilities.
For a new paper, The Value of the Grid, the American Public Power Association examined the potential reach of distributed resources to examine what role utilities can and should play in the future. We determined that there is still tremendous value in both the electric utility and the electric grid in meeting evolving customer expectations.
Despite growth in distributed resources, complete grid defection, where customers disconnect from all utility service and rely on self-supply, is unlikely and counterproductive to customers seeking low-cost reliability or a decarbonized future. Moreover, despite decreasing costs and improving technologies, using a combination of solar and storage to power a typical house is still a relatively uneconomical option. The cost to reproduce the benefits of the electric grid far outpace what most customers spend on electricity each month.