Declining technology costs for distributed energy resources (DER) and new energy as a service business models linked to long-term financing offers are driving accelerated adoption of smaller, smarter, and cleaner energy systems. The DER assets that underpin this shift can support a variety of mutually shared value propositions in the new energy landscape that Guidehouse has dubbed the Energy Cloud . DER assets such as solar PV once viewed as the most expensive available have now been declared the cheapest by the International Energy Agency , which also forecasts that 80% of all new capacity deployed over the next decade will be some form of renewable energy.
Increasingly, the capital costs attached to individual DER assets are dipping to grid parity in key global markets. It is already cheaper to build new renewables than to build new coal plants in all major markets across the globe. As a result, existing centralized power plants powered by coal and nuclear that once benefited from traditional economies of scale are being retired due to simple economics and stranded asset risk. While the specific responses vary, all global regions are seeing increased prioritization of a more resilient, sustainable, and affordable energy future, with DER a key piece in the future energy system puzzle. The value of DER assets can only be fully realized if they are integrated into markets, customer sites, and the grid in a way that […]