America’s electricity system is undergoing dramatic change, in particular as distributed energy resources – notably rooftop solar and battery storage – become more common. Taken in aggregate, total rooftop solar and electricity storage now equals the generation potential of several traditional power plants.
As these resources grow more popular, their potential to impact the larger electricity system also grows. Accordingly, some in the electricity industry have recognized the potential for distributed energy to participate in the same competitive, wholesale electricity markets that have been the domain of large nuclear, gas and coal generators.
Ari Peskoe, Senior Fellow in Electricity Law at the Harvard Law School Environmental Law Policy Program Initiative, weighs in on the growth opportunity that wholesale markets can provide to distributed electricity, and at the policy and economic challenges that remain to their participation in these markets.