Distributed Energy: Rooftop Solar, Virtual Power Plants and Efficiency

For a century electricity flowed one way: from a few large plants, over transmission and distribution wires, to customers who paid a regulated tariff and had no say in how it was made. Distributed energy reverses part of that flow. Rooftop solar panels, home and business batteries, electric vehicles, smart thermostats and heat pumps put generation, storage and controllable demand on the customer's side of the meter, and software can aggregate thousands of them into a virtual power plant that a grid operator can dispatch. The business has proved both large and fragile. In the United States, residential solar grew for fifteen years on a federal tax credit, generous net metering and cheap money, then broke in 2023–25: California replaced full retail-rate net metering with a lower export credit (NEM 3.0, effective 15 April 2023), interest rates rose, and the installer-and-lender model that had financed the boom collapsed — SunPower filed for Chapter 11 in August 2024, and the lender Mosaic and the lease provider Sunnova followed in June 2025 (court filings, reported). Then the July 2025 federal law ended the 30% homeowner credit (25D) after 31 December 2025, while leaving a commercial credit available, for a time, to systems owned by third parties and leased or sold by the kWh to households (verify against statute). The survivors, led by Sunrun and Tesla's energy business, are repositioning as owners of fleets of home batteries that can be sold to utilities and grid operators as capacity. Outside the US, rooftop solar has boomed where grid power is expensive or unreliable: Australia, Germany, Pakistan, South Africa and India. This section explains the economics of rooftop solar and why the value of an exported kilowatt-hour decides it; net metering and its reform; how residential solar is financed and why so many companies failed; home batteries; virtual power plants and demand response; heat pumps and electrification; efficiency programmes and their policy supports; and the international picture.