The results of a new survey of 500 energy industry representatives (utility executives, regulators, distributed energy providers, etc.), conducted by GTM Squared, a research arm of Greentech Media, suggest that ongoing regulatory proceedings designed to properly value distributed energy resources (DER) will be critical in helping the grid continue to evolve as DER gains traction.

In recent years, most utilities viewed DER as a threat, since these advancements directly cut into utility profits. However, the survey results found that DER can open new revenue streams for utilities and other stakeholders in the industry. As a result, according to the survey, more utilities are shifting from a negative view of DER to a positive view.

In fact, a number of utilities are actively engaging in DER projects, including residential solar programs, community solar "gardens," microgrids, and energy storage projects (including large battery arrays).

The challenge up until now, though, has been accurately valuing DER projects. In fact, almost three-fourths (73 percent) of utility executives responding to the survey said that regulatory hurdles are the most significant challenge being faced today in the industry, and that the most important steps regulators need to take are to develop market-based reforms and to create accurate valuations for DER.

Currently, states including California and New York are involved in regulatory proceedings designed to begin to address the issue of value. However, according to GTM Squared, no U.S. market has yet achieved valuation for DER. The main obstacle is the inability to build consensus among the major stakeholders, which include the regulators, the utilities and the DER providers.

Time seems to be of the essence in creating regulations and the resulting valuations. Respondents reported that evolving consumer behavior continues to be the main impetus for the growth of DER. However, most utility respondents admitted they are currently not prepared to meet the demand. On the other hand, DER technology and project developers reported that they are definitely prepared.

Regulators tend to agree. In fact, regulators who responded to the survey said that DER service providers will be the primary organizing entities of DER within about five years. However, they did also report that they expect about 20 percent of utility revenues to come from DER within five years.

In sum, as industry stakeholders focus efforts on regulation and valuation of DER, growth is expected to continue, paving the way for electrical contractors to expand their work in this area.