All Reports
3Q 2023

Residential Distributed Energy Resources and Flexibility

Flexible Residential DER Capacity, Implementation Spending, and Revenue Forecasts in World Markets: 2023-2032

Flexibility needs on the power grid have traditionally been addressed by dispatchable fossil fuel power plants. However, as economies around the world look to cut emissions by installing more renewable energy capacity, new methods must be used to meet those flexibility needs. The number of residential distributed energy resources (DER) is increasing in every world region while the development of advanced software platforms has enabled new use cases for aggregated residential DER, beyond traditional demand response (DR), like virtual power plants (VPPs).

Outside of flexibility enabling technology advances, the market for flexibility from residential DER is being driven by opportunities for low cost grid resources and segment energy profile changes. Hindering further market growth are cybersecurity concerns, legacy customer attitudes towards energy providers, and antiquated energy sector regulations. Other remaining business issues include customer financial considerations for DER and limited customer education. Companies involved in residential DER and flexibility are diverse with some focusing on hardware, others on software, and several choosing to aggregate and operate VPPs. Technology vendors in the market are adapting their solution offerings to facilitate further market growth.

This Guidehouse Insights report examines the flexible residential DER market including retail and wholesale VPPs along with traditional DR. Regional level forecasts for capacity, implementation spending, and revenue are presented across five major geographic regions from 2023-2032 with capacity forecasts segmented by technology type. Total flexible residential DER capacity is projected to be largest in North American throughout most of the forecast period with Europe showing the largest total capacity by 2032.

Pages 44
Tables | Charts | Figures 47
  • What is the role of flexible residential DER capacity in the energy transition?
  • How do the types of flexible residential DER capacity differ?
  • What is driving the use of flexible residential DER capacity in grid operations?
  • What is hindering further use of flexible residential DER capacity?
  • How can technology providers and aggregators facilitate residential DR and VPP adoption?
  • How do different forms of flexible residential DER capacity earn revenue?
  • Residential solar providers
  • VPP operators and DER aggregators
  • Demand response providers
  • Residential IoT device vendors
  • Residential energy storage integrators
  • Utilities and grid operators
  • Regulators and policymakers

1. Executive Summary

1.1    Introduction

1.2    Market Issues

1.3    Industry Value Chain

1.4    Market Forecasts

2. Market Issues

2.1    Introduction

2.2    Drivers

2.2.1   Flexibility Enabling Technology Advances

2.2.1.1 Case Study: Sense and OhmConnect

2.2.2 Low Cost Grid Resource Opportunities

2.2.2.1 Case Study: Green Mountain Power and Virtual Peaker

2.2.3   New Residential Sector Energy Profiles

2.3    Barriers

2.3.1   Cybersecurity, Customer Privacy, and Customer Perception of Utilities

2.3.2   Antiquated Regulations and Mismatched Incentives

2.4    Other Business Issues

2.4.1   Upfront Costs

2.4.2   Flexibility Incentives and Revenue Streams

2.4.3   Customer Outreach and Education

2.4.4   Technical Ability of Residential DER

3. Industry Value Chain

3.1    Introduction

3.2    Pictorial Representation of the Value Chain

3.3    Competitive Landscape

3.3.1   Mergers and Acquisitions

3.3.2   Pricing

3.3.3   Business Model Evolution

4. Market Forecasts

4.1    Forecast Introduction

4.2    Assumptions and Methodology

4.3    Global Residential DER Flexibility Market

4.4    Regional Forecasts

4.4.1   North America

4.4.2   Europe

4.4.3   Asia Pacific

4.4.4   Latin America

4.4.5   Middle East & Africa

5. Conclusions and Recommendations

5.1    Conclusions

5.2    Three Big Takeaways

5.3    Recommendations

5.3.1   DER Technology Vendors

5.3.2   Utilities

5.3.3   Regulators and Market Operators

6. Acronym and Abbreviation List

7. Table of Contents

8. Table of Charts and Figures

9. Scope of Study

10. Sources, Methodology and Notes

  • Cumulative Flexible Residential DER Capacity by Region, World Markets: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Implementation Spending, and Revenue, World Markets: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, North America: 2023-2032
  • Flexible Residential DER Revenue, North America: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Europe: 2023-2032
  • Flexible Residential DER Revenue, Europe: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Asia Pacific: 2023-2032
  • Flexible Residential DER Revenue, Asia Pacific: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Latin America: 2023-2032
  • Flexible Residential DER Revenue, Latin America: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Middle East & Africa: 2023-2032
  • Flexible Residential DER Revenue, Middle East and Africa: 2023-2032
  • Cumulative Flexible Residential DER Capacity by Region, World Markets: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Implementation Spending, and Revenue, World Markets: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, North America: 2023-2032
  • Flexible Residential DER Revenue, North America: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Europe: 2023-2032
  • Flexible Residential DER Revenue, Europe: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Asia Pacific: 2023-2032
  • Flexible Residential DER Revenue, Asia Pacific: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Latin America: 2023-2032
  • Flexible Residential DER Revenue, Latin America: 2023-2032
  • Cumulative Flexible Residential DER Capacity and Implementation Spending, Middle East & Africa: 2023-2032
  • Flexible Residential DER Revenue, Middle East & Africa: 2023-2032
  • Residential DER and Flexibility Value Chain
  • Cash Flows in a DER Aggregation Enabled Market
  • Flexible Residential DER Capacity by Region, World Markets: 2023-2032
  • Flexible Residential DER Revenue by Region, World Markets: 2023-2032
  • Flexible Residential DER Implementation Spending by Region, World Markets: 2023-2032
  • Cumulative Flexible Residential DER Capacity, North America: 2023-2032
  • Flexible Residential DER Revenue, North America: 2023-2032
  • Flexible Residential DER Implementation Spending, North America: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Europe: 2023-2032
  • Flexible Residential DER Revenue, Europe: 2023-2032
  • Flexible Residential DER Implementation Spending, Europe: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Asia Pacific: 2023-2032
  • Flexible Residential DER Revenue, Asia Pacific: 2023-2032
  • Flexible Residential DER Implementation Spending, Asia Pacific: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Latin America: 2023-2032
  • Flexible Residential DER Revenue, Latin America: 2023-2032
  • Flexible Residential DER Implementation Spending, Latin America: 2023-2032
  • Cumulative Flexible Residential DER Capacity, Middle East & Africa: 2023-2032
  • Flexible Residential DER Revenue, Middle East and Africa: 2023-2032
  • Flexible Residential DER Implementation Spending, Middle East & Africa: 2023-2032
  • Description of Residential DER and Flexibility Value Chain
  • Flexibility Platform Solution Offerings and Pricing
  • Residential DER and Flexibility Market: Competitive Structure
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