A new report prepared by the Brattle Group for the Pew Charitable Trusts finds that removing barriers and advancing policies that enable the use of more distributed energy resources -- including distributed solar, battery storage, and demand flexibility like managed electric vehicle (EV) charging -- across residential, commercial, and industrial customers would avoid an estimated $614 billion in U.S. power system costs through 2050.
This would offset roughly half of projected household electricity bill increases, apart from those related to inflation, according to Brattle.
The report, The National Case for a More Distributed Power Grid: New Evidence on Affordability and Demand Growth, "pioneers an approach that examines how to leverage resources located close to electricity users in order to meet rising demand and support energy affordability," Brattle said.
The authors conclude that removing key policy barriers to DER deployment would more than quadruple U.S. DER capacity, adding over 400 gigawatts (GW) by 2050 -- the equivalent of nearly one-third of the country’s entire power generation fleet today.
"This new DER capacity would lower the risk and associated costs of overbuilding conventional energy infrastructure due to uncertain future electricity demands," Brattle said.
In April, Pew released Distributed Energy Can Unleash the Resilient, Affordable Grid of the Future, which outlines six policy recommendations to accelerate the adoption of DERs.
Brattle’s report complements this DER policy playbook by estimating the scale and economic value of expanded DER implementation.
The Brattle analysis finds that addressing three key policy recommendations – incorporating DERs into distribution system planning, reducing permitting costs, and reforming interconnection processes – could deliver $266 billion in avoided power system costs through 2050.
“At a time of historic demand from data centers, new manufacturing, and electrification, DERs can provide a significant new energy supply if barriers to their adoption are removed,” said Maureen Quinlan, who leads Pew’s work to decarbonize the grid. “This report underscores how pragmatic policy changes that enable DER technology can save billions, cut emissions, and help build a more affordable, reliable, and flexible grid that meets today’s and tomorrow’s energy needs.”
Among its most notable findings, the study says that expanded DER deployment could:
- Soften future bill increases: DERs would enable a $122 per year reduction in average household electricity bills by 2050 (in current dollars). These savings would offset roughly half of the projected bill increase that is above the study’s assumed rate of inflation.
- Provide direct financial benefits: DERs allow customers – not large-scale power developers – to earn direct compensation for services they provide to the grid. The resulting net savings are large enough to benefit all customers through lower electricity rates.
- Limit the cost of overbuilding for uncertain demand: In a scenario where anticipated load growth falls short, greater reliance on DERs would reduce overbuilding energy infrastructure costs by $33 billion between 2030 and 2040, a reduction of roughly 40%.
- Increase grid-edge flexibility. Expanding DERs would shift approximately 105 GW of utility-scale storage capacity to distributed storage and other forms of flexibility at the grid edge.
- Reduce natural gas additions: Expanding DER deployment could help avoid roughly 70 GW of projected net gas additions, a 22% reduction that is equivalent to 175 natural gas-fired plants nationally.
- Decrease carbon emissions: DERs would also directly reduce cumulative power sector carbon dioxide emissions by an estimated 3% through 2050, relative to the status quo scenario, and could provide further reductions in other sectors through indirect impacts such as facilitating the deployment and integration of electric vehicles.
- Make a decarbonized power system less costly: In a scenario requiring a carbon-free generation fleet by 2050, expanded DERs would offset approximately 175 GW of utility-scale capacity and lower annual generation costs in 2050 by $45 billion – nearly 20% of the incremental cost of decarbonizing the power supply.
Brattle said the analysis combines long-term power system modeling with an assessment of opportunities to defer local distribution upgrades.
It covers 25 U.S. regions and examines impacts on both the bulk power and distribution systems. It also notes that benefits beyond its quantified estimates -- including resilience and some potential transmission benefits -- could provide additional value.
The report was authored by Principal Ryan Hledik, Energy Associate Kate Peters, Energy Specialist Sophie Edelman, Senior Energy Analyst Prisha Tiwari, Energy Analyst Carly McAdam, and Managing Energy Associate Akhilesh Ramakrishnan.
