Distributed Generation: Cleaner, Cheaper, Stronger

The Clean Energy Initiative’s newest series of fact sheets follows Pew’s 2015 report Distributed Generation: Cleaner, Cheaper, Stronger—Industrial Efficiency in the Changing Utility Landscape, which explores how an array of technological, competitive, and market forces is changing how the U.S. generates electricity and the ways that Americans interact with the grid. It demonstrates that industrial energy efficiency, in particular, is positioned to expand in key states and across the nation as the once-stagnant utility sector becomes more dynamic, offering a transformative opportunity for the nation’s economic, environmental, and energy future.

These fact sheets examine the potential for market growth of two distributed generation and industrial efficiency technologies—combined heat and power (CHP) and waste heat to power (WHP)—in three states: Pennsylvania, Texas, and Wisconsin. The results show that if Congress extends to CHP and WHP the same investment tax credit that is available to other clean and efficient resources for 2017 and 2018, deployment of these technologies could increase over today’s installed capacity in each state.

Four broad strategies have proved effective in expanding industrial energy efficiency, including financial incentives, demand-driving policies such as renewable portfolio requirements, grid integration policies; and emissions reduction policies and goals. Proposed policies—such as the Power Efficiency and Resiliency (POWER) Act of 2015 (S. 1516/H. R. 2657), which would provide tax credit parity for CHP and WHP with other clean and efficient power sources—encourage project development.

Each of these three states is taking a unique approach that best suits its fuel mix, needs, and local philosophies. The case studies explore the drivers behind clean and efficient technologies and the impact key states’ programs have on future market growth. Pew’s research shows that state programs coupled with improvements to federal policy for industrial efficiency and distributed generation technologies would have the greatest potential to reduce electricity consumption, save companies and institutions money, balance the grid by reducing peak demand, and create businesses and jobs in states while reducing emissions.