Residential Solar: Distributed Power Generation - Osceola Energy

Residential Solar: Distributed Power

The Case for Distributed Power Generation:

With the Environment New Mexico Research & Policy Center report, Shining Rewards: The Value of Rooftop Solar Power for Consumers and Society, coming on the heels of PNM’s proposal to charge home and business owners with solar systems a monthly fee, it is important to understand what distributed power generation is, and how it is fundamentally different than the current structure of the United States grid.

What is distributed power generation and how is it different?

Distributed power generation means that a variety of power sources are widely distributed, so that power is generated close to the place where it’s being used (like residential rooftop solar.) The current system in the U.S. uses mostly “central generation,” where large plants, owned by utility companies, generate very large quantities (megawatts) of power and then send it long distances through wire until it reaches the destination of use. Distributed generation, as in the case of residential solar panels, happens at a much smaller scale and may travel only as far as the distance from the solar panel on your roof to your own home below. The excess energy is also back-fed into the grid and distributed to neighbors in the area who require energy demands - the utility company pays you for this excess energy (known as net metering) and your meter literally can spin backwards!

distributed power generation diagram

What are the benefits of distributed power generation?*

  • There is less energy loss because energy is traveling a shorter distance from generation to use.
  • It can make the whole grid more secure because there’s less reliance on any particular part of the system. With several smaller sources of power, if something goes wrong, it’s easier for another source of power to step in and fill the gap.
  • It can help meet peak power needs. Solar power, for example, just happens to generate the most power on sunny summer days, the time when there’s the most demand for high energy consuming air conditioning.
  • It can help reduce the number of transmission and distribution lines that need to be upgraded or built.
  • It works well with renewable energy technologies like solar and wind power, which have environmental benefits.

Distributed power generation technologies

  • Solar photovoltaics (PV): Solar panels are growing rapidly as a source of distributed power generation. If the solar panels on your roof are grid-tied (as most solar systems are) then your own home can be providing power to others when your solar panels generate excess electricity.
  • Wind turbines: Wind systems can be another good source of distributed power. While these are generally found in large open areas with strong winds, they’re not good for dense urban or suburban areas, because of safety, issues with obstructions, and aesthetic requirements.
  • Fuel cells: Fuel cells create electricity through a chemical reaction in a fuel. For utilities, most fuel cells currently use natural gas, which is not renewable. Research on fuel cells that use hydrogen or biofuels is developing quickly.
  • Internal combustion engines: Electric generators using internal combustion engines have a long history of providing back-up power. They typically run on non-renewable fuels like natural gas or diesel, although they can also use biofuels.

What’s next?

Distributed generation will increase in the future as the different technologies continue to become more affordable and thus integrated into our grids energy generation. The infrastructure for distributed power generation is also improving. The government has encouraged the growth of smart grid technologies, which support distributed generation, through policies and funding (including the Recovery Act, which set aside $11 billion for a national smart grid)**.

* This is based on information from
**  This is based on information from