Rather than seeing these technologies as disruptions, many utilities are embracing them. They're rolling out DER programs, incentivizing customers to adopt these resources that can go beyond emergency back up and integrate into the broader grid. But what's driving this strategic pivot? Let's explore the key reasons utilities are investing in DER programs and what they mean for the future of energy.
Historically, electricity flowed one way: from large, centralized power plants through transmission lines to homes and businesses. Today, that model is changing fast.
With more energy being produced at the grid’s edge, from residential solar arrays to EVs capable of two-way charging, utilities need a new approach. DER programs allow utilities to manage this shift in a way that supports grid reliability, efficiency, and customer engagement.
By incorporating DERs into their planning and operations, utilities can:
DERs give utilities more tools to balance the grid, especially as they prepare for growing electrification and intermittent renewable integration.
Demand changes can happen for a variety of reasons that can pose a significant threat to grid stability.
DERs can help mitigate that risk in multiple ways.
By developing DER programs, utilities enable customers to serve as partners in resilience.
Today’s energy customers are more informed, proactive, and tech-savvy than ever before. Many want more control over their energy use, lower costs, and cleaner power sources. DERs offer a pathway for utilities to benefit customers.
Utilities are recognizing that these programs can:
By co-creating energy solutions with customers, utilities can transform the traditional utility-customer relationship into a collaborative partnership.
In many regions, regulatory agencies are encouraging utilities to move faster toward decarbonization, reliability, and grid modernization. This includes mandates for integrating DERs and developing frameworks for compensation, access, and interoperability.
For instance:
By proactively introducing DER programs, utilities can stay ahead of these policy changes while shaping the design of future markets and standards.
Traditionally, utilities meet growing energy demand by investing in new infrastructure—substations, transmission lines, and generation assets. But these are expensive, long-term projects.
DERs offer a more flexible and often more cost-effective solution. Instead of upgrading a substation to handle summer peak demand, a utility could offer demand response incentives to local customers.
By leveraging DERs as “non-wires alternatives,” utilities can reduce capital expenditures, operate more efficiently, and pass savings on to customers.
As the energy landscape shifts, utilities that embrace DERs stand to gain operational flexibility, customer loyalty, and regulatory goodwill. DER programs are no longer optional—they’re a strategic imperative.
Looking ahead, we’ll likely see:
Utilities that take a proactive approach will be better positioned to lead the transition to a resilient and customer-centric grid.
Utilities are introducing DER programs not just because technology is evolving. From grid resilience and carbon reduction to customer engagement and economic efficiency, DERs provide a multi-faceted solution to modern challenges.
Whether it’s a business deploying battery backup or multiple generators supporting demand response, DER programs create a more collaborative, resilient, and dynamic grid for everyone.