Dissecting the State of Distributed Energy Resources Study

The energy market is fluid. As technologies improve, businesses are looking to gain greater control over their energy plan and electricity management, so they can focus more time and resources on their core mission. While companies operate with varying degrees of risk and different priorities, they are increasingly investing in distributed energy resources (DERs) to best position their energy and natural gas strategy for the future. But why? What is it that makes DERs so reliable and feasible across the board? What are their benefits, and do they take precedence over their risks? 

To help gain perspective, we teamed up with Smart Energy Decisions and conducted a study on DERs with businesses who have already gone down the distributed path or are considering it in the future. What we learned was captured and presented in a recent webinar. The study polled over 100 businesses and asked them specific questions about their clean energy plan and how DERs fit into their overall strategy. The study produced five key takeaways and shed some light on what our customers make of this emerging solution.

Customers want the independence and control to choose their energy source. This requires a more holistic approach when planning a distributed generation future. Top challenges are cost and economics of implementation.

Of all of the respondents, 87% cited cost savings as one of the top drivers for deploying DERs into their power system strategy. Our customers are knowledgeable about their energy spend; they know if they can reduce usage during peak hours, they can save money while simultaneously adding resiliency to their equation. While implementing onsite power generation can seem challenging at first, many businesses quickly realize how feasible it actually is when we sit down and hash out the logistics. The study also pointed to initial deployment costs as the main reason for hesitation. However, once installed, businesses save money where they never have before (e.g., conserving energy, modifying consumption, and managing load better during crucial times).

A DER partnership model where products and public services are provided by a single source is heavily favored. Successful relationships will be collaborative and have multiple components of product knowledge, forecasting, market savvy, and technical know-how. 

Of our United States customers polled in 2020, respondents deployed an average of three DER types each. An impressive 75% of our respondents use solar as their primary DER, 66% use EV charging infrastructure, and 50% employ demand response. These are testaments to how versatile DERs can be. And although a manager may think that their business is too critical to employ technologies like DERs, our knowledge base and ability to take a deep dive into individual business models allow us to tailor a DER solution to fit whatever needs a customer may have.

There is room for growth in the effective deployment of DERs. A majority of respondents report less than one-third of their load is currently offset by distributed energy.

DERs are trending heavily upward, but there is immense room for growth. 67% of our customers polled offset 1% – 32% of their load with some type of distributed energy. One of the reasons they are gaining popularity is because they educate customers while also helping them save money. Once a DER is employed, the energy manager will have real-time information on their energy spend, so they will see new trends in their usage and develop a more widespread understanding of how it ties into their business model.

Even as resiliency concerns grow, few perform risk analysis, have calculated the actual costs, or know the true impact on their business.

Getting ahead of a power outage can save a business millions of dollars. Extreme weather, power surges, and unforeseen circumstances can all lead to costly situations that could jeopardize your business’s integrity and its ability to serve its customers. Without some type of DER, companies rely 100% on the resiliency of the grid. So, if there is a widespread blackout, you will lose power and have to wait until it is ready to come back online. By adding an onsite power generator, your business can predict when an outage may occur and mitigate its effects by switching over to a localized battery storage system or power source instead of relying solely on a power plant. 

Emissions reduction and renewable resources goals have emerged as a leading driver for DER adoption.

Meeting emission reduction targets/goals increased in North America as a driver of allocating DERs from 52% in 2019 to 69% in 2020. This signals two things: 1) businesses are much more invested in their sustainability goals, and, 2) they are making actionable strides to meets those goals. So, feasibly investing in DERs is correlated with setting ambitious sustainability goals. For example, respondents who are currently considering the deployment of energy storage and microgrids — two technologies poised for growth — have higher-than-average rates in setting goals. It doesn’t stop there, though. As a business becomes more knowledgeable about their energy usage and how they can shift reliance to and from the grid, they are able to adopt sustainability goals that position themselves and the environment well into the future.

We encourage you to read the full version of the State of Distributed Energy Resources Study and watch the webinar recording below, where you can gain additional insights and learn how DERs can help your business moving forward.