Distributed energy resources (DER) are parallel and stand-alone electric generation units located within the electric distribution system at or near the end user. DER can be beneficial to both electricity consumers and if the integration is properly engineered, the energy utility.
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It is generally accepted that centralized electric power plants will remain the major source of electric power supply for the future. DER, however, can complement central power by providing incremental capacity to the utility grid or to an end user. Installing DER at or near the end user can also in some cases benefit the electric utility by avoiding or reducing the cost of transmission and distribution system upgrades.
For the consumer the potential lower cost, higher service reliability, high power quality, increased energy efficiency, and energy independence are all reasons for interest in DER. The use of renewable distributed energy generation and "green power" such as wind, photovoltaic, geothermal or hydroelectric power, and can also provide a significant environmental benefit.