This article originally appeared in Utility Week

Solar panels, small windfarms, combined heat and power plants – these are all increasingly popular ways for homes and businesses to generate their own power. They signal technological progress as they become commonplace in Europe and North America, but utilities may be forgiven for watching their rise with mixed feelings.

After all, some of their most profitable customers will use less power from the grid and instead use their own. These customers will still depend on the central grid for their emergency, peak or night-time needs, so utilities will have to maintain costly grid and power generating capabilities even as revenues from consumption decline.

The rise of distributed energy systems, which tap these small generation sources and distribute electricity through low-voltage networks, owes much to the high costs of power, environmental concerns and regulatory pressures.

In Germany, the rise of energy prices by 60 per cent over the past decade has created a strong incentive to produce your own power and heat. In the UK, the Renewable Heat Incentive (RHI) pays private generators for the heat they produce, creating attractive economics for running small boilers (less than 200kWh) with biomass fuel rather than oil. In the US, environmental concerns and financial incentives have encouraged distributed generation.

Given these pressures and the investment that customers are making in their own systems, it seems unlikely that the tide will turn back on this trend anytime soon. So how can utilities play a role in these new models?

Read the full article at Utility Week