Publish Date: April 3, 2025

This report, authored by Advanced Energy United and DNV, examines the systemic barriers and emerging solutions for integrating Distributed Energy Resources (DERs) and electrification technologies into the U.S. electric grid. As customer adoption of rooftop solar, battery storage, electric vehicles, and heat pumps accelerates, these technologies present both opportunities and challenges for grid modernization. While DERs can reduce energy costs, lower emissions, and enhance grid resilience, outdated interconnection processes, regulatory misalignment, and high infrastructure upgrade costs are slowing deployment. By identifying the most pressing obstacles and highlighting best practices, this report provides a roadmap for policymakers, utilities, and industry stakeholders to unlock the full value of DERs and drive a more efficient, flexible, and cost-effective energy system.

To develop this report, Advanced Energy United and DNV conducted a comprehensive industry survey between June and September 2024, engaging experts across the distributed generation and electrification spectrum. Interviewees included representatives from electric utilities, regulatory agencies, DER technology providers, Fortune 500 energy customers, and project developers. This qualitative research approach allowed for a broad industry-wide perspective, capturing regional differences, market structures, and real-world implementation challenges. The findings are informed by direct insights from these stakeholders, providing an evidence-based foundation for policy recommendations, investment strategies, and operational improvements. 

Integrating DERs into the grid represents a $110 billion market opportunity between 2020 and 2035, with nearly 400GW of new capacity expected to come online. This investment could drive substantial benefits, including enhanced energy reliability, reduced peak demand, and improved grid efficiency. However, realizing this potential requires a shift from reactive to proactive grid planning—one that incorporates demand flexibility, streamlines interconnection, and aligns utility incentives with DER adoption. Without clear regulatory, commercial, and technical frameworks, these technologies risk being underutilized or even exacerbating grid constraints. By addressing these challenges, the energy sector can fully capitalize on DERs as a key component of a modern, resilient, and customer-driven grid.