The movement to fully electrify our buildings and transportation sectors represents one of the best ways to decarbonize the American economy, but if we do not pursue the most cost-effective path, we could hit major potholes that slow down or derail our trek to net zero emissions. 

With more and more electric vehicles on our roads every day, electricity demand is set to significantly grow, and not only that but higher peak demands could force trillions of dollars in grid infrastructure improvements. As we’ve seen with extreme weather leading to rolling blackouts just this past year, our electricity system even today is not equipped to handle increased electricity load, let alone what we expect from full scale electrification.

From coast to coast, we’ve seen studies that attempt to model how much transmission and distribution spending we’ll need. And this spending will be passed directly to ratepayers. Any state seeing significant transportation electrification will have to contend with this reality. Last year, New York State modeling found that high rates of electric vehicle adoption would create the need for nearly $28 billion in grid infrastructure improvements.

There are 49 other states to consider. Will regulators really approve over $2 trillion in ratepayer-funded, projects across the country? That’s a massive price tag that would make even the biggest pro-climate regulator take pause. If policymakers don’t move on from 20th century examples of grid architecture, that will be the price tag and conundrum — over-build the electric grid while still leaving our economy vulnerable to extreme weather disruptions, congestion and critical peak energy price spikes.

Local solar and batteries connected into virtual power plants are essential ingredients to decarbonization, electrification and improved grid reliability for all communities. These assets will lower energy cost burdens, improve grid performance, and make unnecessary grid capital projects obsolete.

The key to lowering the cost of the electrification movement is energy management and demand response, starting with local solar and storage. Buildings equipped with advanced energy technologies enable them to offset their energy demand or shift their load to off-peak times. Rooftop solar and storage can absorb the increased load from a family who buys a heat pump and EV. Battery storage can respond to price signals and distribution peak periods to export energy when the grid needs it, while serving as back-up power when customers need it. Software can enable smart buildings to use solar, storage and other advanced energy technologies to actively shape their load to both the building’s needs and serve to improve grid reliability. Community solar doesn’t just save families money, but can serve as large distributed grid reliability assets.

The data already make the case for the necessity of deploying local solar and storage at scale. Local Solar for All commissioned a study in 2021 from Vibrant Clean Energy that found that tripling local solar and storage in California will save the state’s ratepayers nearly $120 billion by 2050. The Brattle Group released a study on VPPs showing that they can provide the same resource adequacy at a fraction of the cost of conventional large-scale energy sources. New York’s study estimated that managed EV charging could cut the needed distribution grid upgrades by about $11 billion. Adding in demand response, grid services and active building energy management policies can bring down those numbers further. And Local Solar for All’s roadmap report with Vibrant Clean Energy mapped out a $473 billion savings potential if mainstream distributed solar and storage adoption were included in a national path to a 100% clean energy grid. 

Now that we understand the technical potential of local solar and storage and VPPs, we need the policies to enable their adoption and integration into the electric grid. Every state should embrace local solar and storage as grid assets, because they are the most ratepayer friendly path to a 100% clean electricity grid.