Consumer & Prosumer Participation in DER

A profound shift with DER is the rise of the prosumer – consumers who both produce and consume energy. Households, businesses, and communities are now active players. This section explores consumer motivations, roles of different segments, models like community solar, and equity issues.

Consumer Economics and Incentives

DER adoption is driven by:

  • Bill Savings: Reducing electricity purchases (solar), shifting usage (batteries), avoiding peak rates (DR/efficiency). Payback periods can be 5-8 years in high-cost areas with good policy. Key driver for residential and C&I.
  • Resilience and Reliability: Backup power during outages (batteries, solar+storage, generators, microgrids). Increased interest after major grid events.
  • Environmental and Social Goals: Reducing carbon footprint, energy independence, green branding for corporations (e.g., meeting RE100 goals).
  • Financial Incentives: Federal tax credits (ITC), state/local rebates, performance payments (SRECs), DR program payments are crucial for broad participation. Behavioral programs (feedback reports, rewards) also nudge behavior.
  • Innovative Rate Plans: Utility plans encouraging DER use (e.g., free night electricity for EV charging, smart rates integrated with device control).

Residential, Commercial, & Industrial Roles

Different customer classes engage distinctly:

Residential Prosumer

  • Largest group by number of systems (millions of rooftops, 5-10 kW each). Collectively significant capacity (~4.7M systems by 2023).
  • Contribute via solar, DR (smart thermostats, water heaters, EV smart charging), and growing home storage adoption (>100k systems, often for backup power).
  • Networked home batteries turn neighborhoods into VPPs.
  • Crucial for scaling DER due to sheer numbers and distributed nature.

Commercial & Industrial (C&I) DER

  • Larger loads, more capacity to host DER.
  • Significant C&I solar deployments (100 kW to MWs).
  • Battery storage attractive for demand charge reduction.
  • CHP common in facilities with heat demand (universities, hospitals, industry), providing efficient on-site power and resilience (microgrids).
  • Backup generators potentially repurposed for grid support (emissions considered).
  • Prime participants in DR programs (load curtailment, HVAC cycling).
  • Contribute larger, often more predictable/dispatchable DER than residential.

Industrial Demand Response and Load Flexing

  • Large industrial processes (smelters, chemical plants) can shift/modulate operations via interruptible tariffs or price response.
  • Act as very large "negawatts" when called upon.

Agricultural DER

  • Farms using solar pumps, wind turbines, biogas digesters (manure-to-power).
  • Controlled irrigation or produce storage pre-cooling as DR.

Community Solar and Energy Cooperatives

Models broadening participation beyond property owners:

  • Community Solar: Allows multiple customers (including renters, LMI households) to subscribe to a central solar project and receive bill credits. Expands access dramatically.
    • ~7.87 GW operating across 44 states (mid-2024), growing fast.
    • Often offer guaranteed savings (e.g., 10% discount).
    • Policy focus on LMI inclusion (IRA bonuses, state carve-outs). Key vehicle for equitable DER access.
  • Cooperatives and Municipal Utilities: Often early adopters due to focus on member value and resilience (rural/remote areas). Pilot community solar, microgrids, promote DER adoption (e.g., Kit Carson EC, SMUD, Austin Energy). Can innovate quickly and partner directly with members/customers.

Other Participation Models

  • Energy Communities & Peer-to-Peer Trading: Experimental models (e.g., Brooklyn Microgrid using blockchain) where neighbors trade DER output directly. Potential future for local energy markets, but regulatory/technical hurdles remain.
  • Behavioral Programs & Engagement: Manual DR (peak time rebates), TOU awareness, EV smart charging opt-ins. Utility apps/portals, gamification increase engagement. Smart home platforms and AI could automate participation.

Equity and Access Considerations

Historically, DER adoption skewed towards wealthier homeowners, raising equity concerns. Policies are evolving to address this:

  • Community solar with LMI carve-outs.
  • IRA bonus credits for projects benefiting disadvantaged communities.
  • State programs like Illinois Solar for All (no-cost options).
  • Inclusive financing (on-bill financing).
  • Focus on multi-family building access (virtual net metering, targeted community solar).
  • Avoiding unfair cost-shifts (balancing grid fees with support programs).
  • Workforce development initiatives for diverse local hiring.

Ensuring broad, equitable access is crucial as prosumer models expand.

In summary, the DER movement empowers consumers, turning them into active grid participants. Residential prosumers offer scale, C&I provides larger, dispatchable resources, and community models democratize access. This engagement is key to harnessing demand-side flexibility. Understanding consumer motivations and ensuring equitable participation are vital for successful DER integration.