What is distributed generation?

If you’ve ever seen solar panels on the rooftop of a home or business, you were looking at “distributed generation.”

And it’s a safe bet you will be seeing more of it.

Distributed generation means generating electricity at or near the location where it is used. It is cheaper than conventional, centralized generation because it avoids costs of building transmission lines and infrastructure needed to get the electricity to homes and businesses. Also, distributed generation lets consumers control their own power supplies.

The traditional way to distribute electricity requires a large power-generation facility, typically a coal-fired, gas or nuclear power plant located well outside the city, and a network of high-voltage transmission lines that transfer electricity long distances, from power stations to consumers. The facilities — power stations, substations, electricity transmission lines and towers — are expensive to build and maintain. And a lot of it is old and inefficient.

Distributed energy generation, on the other hand, is local. Not as much infrastructure is required after initial installation of power generators. And it is clean, if the right resources are used.

Infographic illustrating differences between centralized and distributed generation of electric power (State Dept./Julia Maruszewski)
(State Dept./Julia Maruszewski)

Where does the energy come from?

The sun, wind, water, the earth’s own heat (geothermal) and even waste (biomass) are all clean energy resources fit for distributed generation.
Distributed generation may occur on a small scale at individual homes and buildings, or on a slightly larger scale using wind turbines and solar arrays a utility company positions around a community. Integrating distributed energy from small- and medium-scale renewable sources into the existing energy framework has become a priority for many utility companies.

These companies are adapting to electricity flowing from numerous generation points, rather than just one central site. They have to anticipate when they’ll be able to draw on power sources that are predictably active at certain times of day or season — like solar and wind.

How does it work?

Individual distributed energy producers can use electricity as they need it and feed their excess electricity into a shared electrical grid, if they are connected to one. When the sun stops shining or the wind stops blowing at their home or business, they can turn to that grid to draw electricity being generated elsewhere.

Distributed generation also can be independent from the grid. When coupled with batteries to store excess electricity generated during peak production hours for use during low production hours, intermittent renewable energy sources can provide constant power to individual homes, businesses and community “micro-grids” — localized power networks — in remote areas with no connection to a regular grid.

Technological advances are making renewable energy resources — especially solar and wind — the cleanest, most efficient and increasingly affordable methods of power generation. The importance of distributed generation has emerged as renewables have become mainstream.