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Distributed Generation Holds Promise, Faces Challenges

Those of us who maintain optimism for a future than includes sustainable practices in energy generation place a great deal of hope in “distributed generation” – the concept in which the model of buying electricity from huge utilities becomes increasingly irrelevant, and in which individual users generate more – or all — of their own. Such a schema has many obvious advantages, especially that it encourages renewables; users will not be building their own coal-fired power plants, for example, but they will deploy solar and wind power.

Yet there are equally obvious challenges. Though distributed generation has been with us since the dawn of time, it is just now coming back into the mainstream after a century in which centralized generation had become the norm, at least in the developed world. That means a great deal of inertia that needs to be overcome, in several different forms, one of which is legal.

Suppose my friends at Continental Wind Power, for example, want to lease one of their 400 kilowatt wind turbines to a factory, or a farm, or a school. Can the transaction be based on a standard lease agreement? Not in today’s world. A gaggle of lawyers is going to be involved on both sides for quite some time. That’s not how established businesses and industries work; can you imagine telling a car salesman that you’ll have your lawyer redraft the lease agreement on that new Buick?

Distributed generation has a long journey ahead of it, but the destination will be more than worth the trip.