Solar Distributed Generation

In a shift from the traditional electric power paradigm, utilities and utility customers are installing distributed generation (DG) facilities that employ small-scale technologies to produce electricity closer to the end use of power. Driving this exponential growth is the dramatic decrease in the price of solar panels, as well as state, federal, and utility incentives for solar panel installations and state renewable portfolio standards (RPS). Use of DG resources may offer numerous benefits, including avoided generation capacity costs (e.g., less need to build new generation), avoided transmission costs, less need for backup power, and neutral environmental impacts, but it may also pose operational and economic challenges to electric utilities and electric power customers. The American Public Power Association (Association or APPA) believes that solar DG can play an important role in helping meet energy needs and achieving environmental goals so long as solar DG customers pay their fair share of the costs of keeping the grid operating safely and reliably. Thus, APPA supports the integration of DG resources, including community solar projects, to meet customer requests or utility goals. However, as rate design for DG must take into account a utility’s technical limitations and geographic considerations, APPA opposes attempts by Congress or federal agencies to federalize standards for DG implementation or rate designs, both matters of state and local, retail regulation.

Issue Brief
Distributed Energy Resources