The Demand-Side Opportunity: The Roles of Distributed Solar and Building Energy Systems in a Decarbonized Grid

Building energy systems represent a significant and largely untapped demand-side grid resource (Neukomm, Nubbe et al. 2019, Kellison, Kolo et al. 2020, Satchwell, Piette et al. 2021). Buildings use about 75% of electricity in the United States, including around 80% of peak demand, meaning that changes in building energy use have significant implications for grid operations (Fallahi and Henze 2019). Building energy technologies—including energy-efficient devices, flexible loads, and energy storage—can be coordinated and aggregated to perform similar functions as centralized grid assets. Recent advances in information and communication (ICT) technologies have significantly improved building energy technology automation, coordination, and aggregation capabilities (Sofos, Langevin et al. 2020). With declining costs and technological advances, building energy systems can increasingly compete with conventional grid assets such as natural gas plants (Teplin, Dyson et al. 2019). Building energy technologies enable the deployment of distributed solar photovoltaics (DPV) (Fares and Webber 2017, O'Shaughnessy, Cutler et al. 2018). Energy-efficient buildings allow DPV to meet greater shares of building load while flexible loads and energy storage can reshape building load profiles to optimize the on-site use of DPV (Figure 1). Optimized on-site use of DPV increases the value proposition for DPV adoption and can help utilities cost-effectively integrate higher levels of DPV penetration (Fares and Webber 2017). Together, DPV and building energy technologies could help grids achieve deep decarbonization more quickly and cost-effectively (Jenkins, Luke et al. 2018, Cole, Greer et al. 2021).