State‑Level Distributed Energy Resource (DER) Incentives
Between an increasing demand for electricity and an increase in extreme weather events, utility companies must work harder to keep your lights on. Power grids are at their limits, and states are responding with incentives to strengthen the grid.
Distributed energy resources (DERs) are devices that allow households to generate, store, and manage energy locally. They include devices like rooftop solar panels, home batteries, and EV chargers.
The more homeowners use these devices, the more resilient the energy grid becomes. Learn how DER incentives work, how state programs work, and what you can expect as a customer when you use DERs.
What Are DER Incentives and How Do They Support the Grid?
Distributed energy resources are devices and technologies that can generate, store, or shift electricity demand. Everything from smart thermostats to rooftop solar panels, usually ranging from 1 kW to 10,000 kW, helps out in its own way.
For example, rooftop solar panels generate renewable electricity, so you don’t have to rely as much on power from the grid to keep your home running.
Home batteries store energy when it’s abundant, like on sunny afternoons, and release it during peak demand. Solutions like the EcoFlow DELTA Pro Ultra store energy for later use, whether you use it at home during a power outage or while traveling. Demand-side resources, like smart thermostats, are a type of DER that adjust your consumption to reduce stress on the grid.
Governments are rolling out DER incentives to strengthen the grid, including incentives for solar panels and other eco-friendly tech. As adoption grows, utility companies are better able to meet demand and improve grid resilience.
And it’s working: Deloitte estimates that homes could generate more than 1500 gigawatts of additional capacity by 2035 thanks to DERs.
Opting for DERs also benefits you as a consumer. Tax credits and rebates from the Inflation Reduction Act and Bipartisan Infrastructure Law encourage homeowners to invest in DER technologies. DERs reduce energy costs and mean the grid relies less on fossil fuels, which is a win for the environment and public health.
How State Programs Are Structured: Tracks, Phases, and Tariffs
Nearly every state offers some version of a distributed energy resource incentive. However, the structure of these programs differs a lot by location.
Some states provide upfront rebates, like Oregon’s instant savings on installations. Arizona provides a 25% tax credit on solar installation costs (up to $1000), which you’ll see when you file your state income tax. Other states tie payment to performance over time, such as California’s battery storage incentives. Certain programs target specific populations, like Texas’s specialized rebates for low-income households.
Most states organize DER incentives by tracks, which are how you participate in a program. There are usually three tracks available:
Non-export: This is when you keep the energy you generate for personal use.
Export: You send energy back to the grid, usually in exchange for payment or a credit on your energy bill.
Grid services: This track offers more advanced programs where you contribute to grid-balancing. You typically need to enroll with a device, like a smart thermostat, that your utility company has some control over.
For example, Hawaii offers different incentives by track. Its Smart DER Tariff offers a basic participation option, while the Bring Your Own Device (BYOD) program provides extra perks for households that opt into grid services. Products like the EcoFlow DELTA 3 Plus Solar Generator (PV220W) also make DER programs more flexible. You can choose how much you want to participate, since the generator supports both portable power generation and storage.
However, it’s important to keep in mind that DER incentives change over time. Most states implement them in phases, which can greatly impact which incentives are available and how much you can earn.
You probably won’t earn much (if anything) for non-export tracks, but export and grid services often earn tariffs. These are your compensation for helping out the grid. Your utility company may pay you based on a flat fee, a percentage-based model, or by performance.
What Customers Can Expect: Incentives, Compensation, and Enrollment
The specifics of DER incentives depend on where you live. For example, sunny states often provide more incentives for switching to solar.
However, you can expect the state to offer some type of incentive for participation. Most states provide upfront rebates for installing solar panels, batteries, or other DER devices. Others offer ongoing payments or credits based on how much energy you generate, store, or shift. For example, installing a home battery or a system like the EcoFlow DELTA Pro 3 Solar Generator (PV400W) might qualify for state-level rebates, plus utility-backed incentives for storage.
Keep in mind that compensation differs based on which track you’re signed up for. Non-export is for self-use, so you’ll mainly save on your monthly bills by drawing less energy. If you opt for the export track, you typically receive credits on your utility bill, calculated per kW sent back to the grid.
To participate in a distributed energy resource program in your state, you typically need to opt in. Most programs use online applications, and basic tracks are fairly simple to join. If you want access to advanced programs—like grid service tracks that pay higher rates—you may need to agree to extra requirements such as installing new meters, allowing utility-controlled devices, or signing more detailed contracts.
Ultimately, the exact details of DER incentives in your area come down to where you live. See what your state offers: explore detailed program information at the DSIRE database, which tracks incentives across the U.S.
Frequently Asked Questions
What Is the Difference Between Smart DER and BYOD Tariffs?
With Smart DER programs, you can export excess energy back to the grid or reduce demand during high-demand periods. BYOD tariffs, on the other hand, allow you to enroll batteries, EV charges, and smart thermostats in programs that could earn higher payments than standard Smart DER programs.
How Do DER Incentives Benefit Homeowners?
DERs benefit homeowners in several ways. First, they reduce the upfront cost of installing solar panels, batteries, or portable generators. Also, they can lower energy bills, help you rely more on renewables and less on fossil fuels, and prioritize incentives for low-income households.
DER Incentives Lower Costs, Strengthen Grids, and Promote Independence
While there are some federal energy programs available, state-level distributed energy resource incentives strengthen your local grid. They not only trim energy costs, but they also make your local grid more resilient during cold winters or scorching summers.
DERs can make a dent in your energy costs, but they’re just one piece of the puzzle. Energy resilience also requires plenty of backups and storage. Investing in a solution like the EcoFlow DELTA Pro Ultra can lead you toward greater energy independence while qualifying for many of the incentives available today.