The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Bringing Energy Closer to Home: Why Distributed Generation Works

For all the talk in the last few years about smart grid, it's amazing how little has changed in the American electric industry since Thomas Edison first fired up his power station on Pearl Street, New York City in 1882. In many ways, Edison would have no trouble recognizing today's grid. It still relies on the same basic tenets that allowed him to found the Edison Illuminating Company. His pioneering construct of a central station power generator with transmission and distribution lines linking inexpensively to provide power to businesses and homes persists today, supplying nearly all the electricity needs in the Western world.

The only problem is that the real costs of that power are no longer so inexpensive in dollars or other impacts. 

If we are to reap the potential of the smart grid, we need to fight against a century-plus of momentum that continues to favor central over distributed, or local, resources. A future smart grid can only bring fundamental change if we recognize the true value of distributed resources and get smarter about how efficient we are in our use of energy more generally.

What’s really wrong with Edison’s model? The reality today is central station power has many negative externalities that are not effectively priced into the electricity they make — like raising the cost of water to everyone. In fact, according to the National Atlas of the United States, cooling power plants is the single largest use of fresh water in the United States at more than 50 percent of total consumption. And then there are the costs of new or upgraded transmission lines that impact many along their path. 

We should be focusing on the next generation of the power grid by making everyone as efficient as possible and favoring distributed resources. Doing so would create many benefits, like those noted above, while also bolstering our country’s security. With more distributed resources, the vulnerabilities of the grid are minimized. Bottom line: Investment in distributed resources and efficiency accrue many benefits that central station power plants and transmission lines can’t claim.

Saving energy through new efficiencies is the most cost-effective and cleanest "resource,” yet it's among the least supported of U.S. policies. The British, for example, retrofit more than 1.6 million homes over 12 months ending April 2011, government sources say.   

Moreover, putting distributed generation like solar at the site of consumption avoids many negative impacts like emissions, as well as disruptions caused by long-distance transmission. Yet again, distributed solar installs get no more credit from U.S. government incentives than those constructed in the middle of the desert where transmission still needs to be built.  

The key question we must ask ourselves is whether it’s possible to deliver on the promise of the smart grid without a fundamental paradigm shift. This is a promise that offers opportunities for exponential growth like the distributed nature of the Internet has enabled in commerce. While the old paradigm assumes we need a centrally directed hub-and-spoke network running our grid, the new paradigm looks to distribute resources – to meet needs automatically as they emerge with non-conventional resources like plug-in electric vehicles, home solar arrays and back-up sources like fuel cells.   

What’s needed? We need to replace the paltry and soon-to-expire $500 per homeowner tax credit for efficiency improvements with a much more aggressive 80 percent credit for the first $2,500 and 40 percent credit for the next $7,500 for ENEGY STAR® qualified home efficiency improvements. We should leave this in place until at least half the homes in the U.S. have been retrofit, driving as much as a 10 percent reduction in energy use across the residential sector, with no fundamental change in behavior.

The benefits of this incentive flow not just to homeowners who can cut their energy bills by up to 20 percent, but also to the creation of good jobs in manufacturing and installing the improvements. 

For distributed gen, we should double the current 30 percent tax credit for any resources installed behind the meter. This additional incentive reflects the fact that nearly half the cost of our power grid is a “wires” charge associated with moving power from distant power plants to homes and businesses. We should let it expire in 2016 just like the current incentive to allow technologies like solar to reach scale efficiency. 

The Internet revolution has shown us that distributed resources can be an incredibly powerful engine of growth. The only question now is whether we are ready to finally advance from Edison’s empire of light and move toward that LED at the end of the tunnel.

Jeff Bladen is chief commercial officer for the Mark Group. 

Rerun with permission of Energy Central.

Untitled Document


Sunrise in Pakistan as the Country Delves into Solar PV

Robert Harker Pakistan has joined the list of countries that are exploring solar power as a means to bridge critical energy generat...

Global Renewable Energy Roundup: China, Kenya, Turkey, India Seeking More Renewables

Bloomberg News Editors China is being encouraged by three industry groups to double the nation’s solar-power goal for 2020 to make up for sh...

Why Smarter Grids Demand Smarter Communications Networks

Mark Madden

Historically, utility networks and communications networks have had little in common.

The Importance of “Switching Costs” to the US Residential Solar Industry

Paula Mints The DoE and numerous organizations and governments globally are focused on driving down the cost of solar convinced t...


Free ImagineSolar Online Course Demonstration

ImagineSolar will be holding another live demonstration of PV250e: Solar PV Economics a...

Canadian Solar Announces Partnership in 200 MW Tranquility Solar Power Project

Recurrent Energy signed an agreement with Southern Power to partner on the Tranquility ...

AWS Truepower Announces Major Expansion of its Due Diligence Team in Response to Growing Market Demand

AWS Truepower, an international leader in wind and solar energy consulting and engineer...


NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards

NATiVE Recognized for Excellence at 2015 Greater Austin Business Awards NEWS RELEASE AUSTIN, Texas – Aug. 27...

Solar Energy Means Jobs, Savings, and a Low-Cost Future [infographic]

There are a lot of utility-sponsored legislative and regulatory attacks on solar energy lately, and we put together t...

How To Get People To Do Stuff

It’s no secret that psychology and sales go hand in hand. If you understand the principles of human psychology ...



Volume 18, Issue 4


To register for our free
e-Newsletters, subscribe today:


Tweet the Editors! @jennrunyon



Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Intersolar India 2015

Exhibition and Conference: November 18-20, 2015 Intersolar India 2015 I...

Intersolar North America 2016

Exhibition: July 12 - 14, 2016; Conference: July 11 - 13, 2016 Intersola...


Less Is More

When you’re giving a presentation, one of the easiest things to do...


One of the biggest challenges we face as efficiency sales professionals ...

How To Optimize Your Meeting Schedule

Do you spend more time in meetings than you do actually working? While m...


Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now