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The timely emergence of a healthy distributed power industry is required to serve the basic needs of early adopters. For this to happen, quick action is required to remove some of the most pressing barriers, such as inappropriate or inconsistent codes and standards.
In today's market, regulated utilities are responsible for maintaining the safety and reliability of the grid, and naturally have concerns about the interconnection of equipment to the network—including consumer-owned distributed power systems. But the technical requirements for grid interconnection vary among states and even among utilities within a state.
The lack of uniform, consensus-driven interconnection codes and standards is causing delays in the deployment of distributed power systems. National standards have been developed by IEEE's P1547 interconnection working group but have yet to be widely adopted. In addition, without legislative or regulatory intervention, utilities have little incentive to streamline the technical requirements for grid interconnection. Many developers of distributed power argue that existing requirements are overly burdensome. For an in-depth look at the obstacles encountered by the distributed power industry, see Making Connections: Case Studies of Interconnection Barriers and Their Impact on Distributed Power Projects (PDF 1.8 MB). Download Acrobat Reader.
There are also several legislative barriers to distributed power, some at the federal level, some in the states. Barriers can arise from local codes, standards, and environmental regulations that are not structured to recognize the attributes of distributed power.
The structure of the electricity market itself presents some barriers to the adoption of distributed power. Any market rules or business practices that nullify the advantages of distributed power will slow market adoption. For example, owners of grid-connected distributed power generators can pay excessive and prohibitive charges for their connection to the grid as a backup power source, even if they never use any grid power.
Without taking proactive measures on these and many other issues, there is a risk that the transition to competition in the electricity industry could take a decade or two, as was the case with the telecommunications industry.
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