A report prepared by The Brattle Group for The Pew Charitable Trusts estimates that removing barriers to the deployment of distributed energy resources (DERs), including distributed solar, battery storage and demand flexibility such as managed electric vehicle (EV) charging, could avoid $614 billion in U.S. power system costs through 2050. The savings would offset approximately half of projected household electricity bill increases, excluding inflation.

The report, The National Case for a More Distributed Power Grid: New Evidence on Affordability and Demand Growth, examines how resources located near electricity users could help meet rising demand and support energy affordability. The authors estimate that removing key policy barriers to DER deployment could more than quadruple U.S. DER capacity, adding more than 400 gigawatts (GW) by 2050. That capacity would be equivalent to nearly one-third of the country's current power generation fleet.

The additional DER capacity could also reduce the risk and costs associated with overbuilding conventional energy infrastructure in response to uncertain future electricity demand.

“Many homes and businesses already have technologies that could help the grid meet rising demand, and adoption of those technologies will continue to grow. The opportunity is to treat them as resources in utility planning rather than leave their capabilities untapped,” said Ryan Hledik, a Brattle Principal and report coauthor. “At scale, DERs could avoid or defer a portion of US infrastructure investment needs, reduce pressure on household bills, and give utilities more flexibility in the face of uncertain demand.”

In April, Pew released Distributed Energy Can Unleash the Resilient, Affordable Grid of the Future, which outlined six policy recommendations to accelerate DER adoption. Brattle’s report estimates the potential scale and economic value of expanded DER implementation.

The analysis finds that addressing three policy recommendations — incorporating DERs into distribution system planning, reducing permitting costs and reforming interconnection processes — could result in $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.”

Report Findings

The study identifies several potential impacts of expanded DER deployment:

• Reduce future electricity bill increases. DERs could reduce average household electricity bills by $122 per year by 2050, in current dollars. The savings would offset approximately half of the projected bill increase above the study’s assumed inflation rate.
• Provide direct financial benefits to customers. DERs allow customers, rather than large-scale power developers, to receive compensation for services provided to the grid. The resulting net savings could benefit all customers through lower electricity rates.
• Limit infrastructure overbuilding costs. In a scenario where anticipated load growth falls short of projections, greater reliance on DERs could reduce energy infrastructure overbuilding costs by $33 billion between 2030 and 2040, a reduction of approximately 40%.
• Increase grid-edge flexibility. Expanded DER deployment could shift approximately 105 GW of utility-scale storage capacity to distributed storage and other forms of flexibility at the grid edge.
• Reduce natural gas capacity additions. Expanded DER deployment could help avoid approximately 70 GW of projected net natural gas capacity additions, a 22% reduction equivalent to 175 natural gas-fired power plants nationally.
• Lower carbon emissions. DERs could directly reduce cumulative power sector carbon dioxide emissions by an estimated 3% through 2050 compared with the status quo scenario. Additional reductions could occur in other sectors through indirect impacts, including facilitating the deployment and integration of electric vehicles.
• Lower the cost of decarbonizing the power system. In a scenario requiring a carbon-free generation fleet by 2050, expanded DERs could offset approximately 175 GW of utility-scale capacity and reduce annual generation costs in 2050 by $45 billion, nearly 20% of the incremental cost of decarbonizing the power supply.

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 bulk power and distribution systems.

The report also identifies potential benefits beyond its quantified estimates, including resilience and some potential transmission benefits, which 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.