• Utility Customer Engagement
  • DER Technologies
  • Intelligent Building Technologies

The Need for New Software Platform Capabilities to Support Improved DER Financing

William Tokash
Sep 27, 2018

Smart Building 4

At the core of the commercial and industrial (C&I) focus of my Utility Customer Solutions research service, I’ve highlighted how corporate C&I energy and sustainability managers are looking to deploy distributed energy resources (DER) by using new project-based financing to meet sustainability energy-management needs. But the emergence of single-solution energy efficiency or DER financing instruments is only part of the story.

DER Solutions Redefine Risk for Financing and Generation

The financing of a mix of energy efficiency and DER technologies (such as solar PV, energy storage, demand response, microgrid technology, and EV charging infrastructure) at a single site complicates the potential for predictable energy savings for the C&I energy user. This challenge increases where the participation of customer-site DER in capacity and ancillary services markets is considered. But now that these new DER solutions are becoming available, C&I energy users will increasingly seek to simultaneously deploy more than one of them at a single facility to effectively reduce energy use and spend without CAPEX expenditures.

While the integrated application of these DER solutions is emerging, the move away from centralized generation is also occurring, which is creating new challenges for traditional energy project financiers. Navigant Research anticipates that up to a 50% reduction in centralized generation demand is possible by 2030 because of combining new demand for electrification and demand reduction associated with the growth of DER. This trend is driving energy project finance investors to look beyond traditional utility-scale fossil fuel generation and renewable energy project finance investments into new customer-sited energy efficiency and DER solutions. Many project financiers are examining the risks and opportunities associated with these types of complex investments for the first time.

Intelligent Building and DER Technology Providers Will Collaborate

As the deployment of financed DER solutions across increasingly complex customer use case scenarios grows, the ability of intelligent buildings and DER software platforms to predict energy savings across more integrated analytics and operational control platforms will become increasingly more important. As examined in a recently released Navigant Research report, intelligent building and DER software platform technology providers will need to work together to improve the ability of these platforms to predict energy savings across more integrated analytics and operational control software platforms to meet the needs of C&I energy users and financiers.