2.5 Financing at the Grid Edge (Ch. 6)

The chapter discusses legal impediments and solutions for customer, community, and third-party financing of behind-the-meter and community-scale clean generation, storage, and energy efficiency. Current levels of investment by utilities and independent power producers fall well below levels needed to meet deep decarbonization goals. Investments at the “grid edge” driven by customers and communities not only contribute to clean energy goals, but also reduce energy prices and improve the resilience of the power sup- ply. These linked incentives can help attract the new investment we need. To unleash investment at the grid edge, legal reforms are needed to permit ownership of local energy resources and sales of energy and other services by customers, communities, and their local suppliers; to encourage utilities and regional transmission organizations (RTOs) to foster transparent mar- kets for services from grid-edge resources and make direct purchases of such services; to provide better information on the usage of customers and the needs of the grid; and to adapt and reuse existing finance markets and create new institutions that support grid-edge finance. These reforms will permit customers and communities to structure creditworthy projects that qualify for financing.