Grid edge: predictions for 2023

A game-changing year could lie ahead for the US grid edge. We expect 2023 to be a banner year for the distributed energy resource (DER) market and grid modernization. What are the key themes and trends to watch? How powerful are the tailwinds? Where are the biggest opportunities?

We tackled these questions in Grid edge in 2023: what to watch for, focusing on key themes including: 

1. Public funding and regulatory support drive grid modernization
2. Federal investment spurs public charging infrastructure deployment
3. Interoperability remains a key theme of public charging
4. The microgrid market continues its shift towards zero-carbon DERs
5. Tailwinds for electrification boost heat pump adoption
6. Virtual power plant providers eye new opportunities

Read on for an introduction, and fill in the form for your complimentary copy of the full report.

The BIL and IRA power up the grid edge

The DER market and grid modernization will take a big step forward in 2023. Investment in these areas will be driven primarily by public funding from the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA).

The US Department of Energy’s (DOE) Grid Resilience and Innovation Partnerships program, for instance, will release US$4.2 billion in funding in 2023 and elicit the same amount from the private sector.

State funding will continue to determine where investment flows, however. California will continue to up the ante on procurement of clean resource capacity and resilience solutions.

Grid edge technologies get a regulatory boost

This year will also see significant regulatory tailwinds for grid edge technologies.

Regulators are increasingly amenable to utilities rate-basing grid modernization investments. States and municipalities are reforming microgrid tariffs and encouraging microgrid deployment at critical facilities. And RTOs are enacting market reforms to facilitate DER participation in markets, most notably in ERCOT's Aggregated DER (ADER) pilot, which launches this year.

At the same time, as they relax rules for grid and distributed resource investments, regulators are showing activist tendencies as well. Building codes on the East and West coast are being tightened to impose energy efficiency – which typically equates to electrification. And a new law in California will require regulators to hash out new reliability standards and data disclosure requirements for publicly supported EV chargers.

With great opportunity comes greater complexity

Companies and utilities will need to navigate an increasingly diverse set of programs and funding opportunities which splinter the market. States and federal agencies will need to continue standing up these programs at breakneck speed to release funds on time.

At the project level, the increasing integration of multiple DER technologies at residential, commercial, and municipal sites, as well as the growing set of software platforms mediating their behaviour and participation in markets, will pose challenges for developers. This will strengthen the imperative of interoperability-by-design, which is already starting to be embraced by technology providers.

Read our grid edge predictions in full

How much growth in advanced microgrids do we expect in 2023? How will federal incentives boost heat pump adoption? What new markets and revenue streams can virtual power plant providers look forward to? Get our predictions on this and more in Grid edge in 2023: what to watch for.

Fill in the form at the top of the page for your complimentary copy.