In the wake of Trump’s victory, many in clean energy are trying to figure out what they can expect from the federal government in the next four years. It is now clear that the gains of the Biden administration — including the Inflation Reduction Act, the most substantial federal investment in clean energy in history — may be quite fragile.
But there are areas where progress is likelier to endure than others. The regulation of distributed energy, for instance, is almost entirely outside the bounds of the federal government.
And the market for distributed energy resources like rooftop solar or home storage systems in the United States is big, and growing fast. One Wood Mackenzie estimate, released in June, found that capacity will grow by a whopping 217 gigawatts through 2028.
Arushi Sharma Frank was previously Tesla’s energy markets policy lead, and is currently an energy policy advisor and founder of Luminary Strategies. Speaking in the weeks before the election, she told Latitude Media that the “deeply balkanized” nature of the grid will insulate distributed energy from abrupt federal policy changes.
The distribution system is not regulated by the federal government, but rather by dozens of regulatory structures, from states to city councils to non-state commissions. Cooperatives and municipal utilities, for instance, are essentially “independent regulators of their own reliability,” she said.
That gives states and other local entities room to innovate, regardless of who is in the White House. The fact that there are so many different regulators — and that the federal government has such a minor role — means that the deployment of distributed energy is unlikely to slow down dramatically under a second Trump term.
The resiliency promise of DERs
That’s partly because resiliency is inherently appealing to both parties.
Sharma Frank spoke this year at the Conservative Energy Summit, and highlighted the case of a Rocky Mountain Power virtual power plant program, enabled by Utah’s Republican governor in 2017 and embraced as a model by other GOP leaders in the years since. She is convinced that programs like VPPs can be sold to just about anyone — if the messaging is right.
“It’s when it gets sold to politicians as exclusively a clean energy transition problem statement that it’s really hard for it to resonate, for obvious reasons,” she said.
But it’s not hard to frame DERs as an option for resiliency — which people want, regardless of party — and avoid using the words “clean energy,” she added; instead, companies and policymakers should use phrases like “basic energy independence,” “distributed cyber risk,” and “self-reliance.”
“If you attack one substation, you take down neighborhoods,” Sharma Frank said. “You can attack 6,000 PowerWalls, if you want — but then how much is each 13-kilowatt-hour system going to impact the localized grid? The answer is zero, because anytime there’s a problem of a tiny blip, your battery literally disconnects from your utility meter.”
So even when the presidency and Senate turn over in a matter of months, Sharma Frank doesn’t expect her state-level work with companies and regulators to change substantially.
“It doesn’t change the nature of people dying if there isn’t enough resiliency, in any state,” she said. “Most outage minutes in the U.S. are not the result of missing transmission, they are the result of distribution infrastructure failing.”
The path from here
Trump’s election will nonetheless take a toll.
Federal investment into clean energy, for instance, will be heavily scrutinized and possibly rolled back. And that lack of funds, Sharma Frank said, is something to worry about.
Trump said in September that he will “rescind” all unspent IRA funds if he won the White House. Although many Congressional Republicans have indicated that they would not take a “sledgehammer” to the IRA, alterations to tax credits would most certainly have an impact on rates of deployment — particularly for distributed solar and batteries.
“If the cost of people acquiring the equipment they need skyrockets because business models for procuring this stuff rely primarily on things like the IRA and stand-alone storage credits…then, yeah, people’s access to the physical infrastructure changes very quickly,” she said.
That said, Ben Hertz-Shargel, global head of grid edge at Wood Mackenzie, told Utility Dive at the time of the DER market report’s release that the risk of a reduction in federal clean energy and electrification subsidies is unlikely to shift the growth of the technologies much, at least not until 2028.
And even in the case of the federal government sunsetting those incentives, Sharma Frank anticipates that states will jump in. State lawmakers will have to come up with money to support distributed solutions, she said, because electricity bills are going up and people aren’t prepared to just wait around for their utility service to improve: “That’s not coming, and bills are going up,” she said.
Lower levels of government will be incentivized to help in part because the way consumers — and voters — think about their energy has shifted fundamentally, Sharma Frank said, even since Trump’s last four years in office.
“You can win an election now at the state and local and mayoral level simply on the platform of reducing electricity costs,” she said. “Those politics are divested from who’s going to be president.”
