A Tesla Powerwall unit.
Technical Summary

Distributed Energy Storage

Project Drawdown defines Distributed energy storage as decentralized energy storage systems generally based on battery storage. This solution replaces the conventional practice of obtaining all electricity from the centralized grid.

Energy storage on the distributed scale is a powerful tool for enabling transformations in the energy system. Distributed energy storage systems can allow residential and commercial buildings to act as active participants in the electricity distribution system rather than passive consumers. They can allow consumers to draw power from the grid at times and rates of their choosing, avoiding steep charges for consumption at peak times or when demand spikes. When combined with distributed generation resources such as rooftop solar, distributed energy storage can open a path to energy independence for buildings. It can also ease adoption of variable, renewable energy sources on the utility scale by effecting a more predictable and responsive demand pattern. Finally, distributed energy storage is a crucial part of modernizing the energy system at large, through providing smart grid and related services.

Currently, distributed energy storage is practiced only on a very small scale. The systems are generally based on battery storage, which has been prohibitively expensive for many years. Moreover, policy-based incentives for the use of distributed energy storage, such as time-of-use electricity pricing plans, have been lacking in many areas. The status quo has recently begun to shift, however, as batteries decrease sharply in price and utilities seek ways to avoid costly infrastructure upgrades in the face of rising demand. The increased penetration of distributed generation resources has also provided added incentive for consumers to consider the use of distributed energy storage. As such, distributed storage is at a tipping point and is poised to become a major element of the energy system.


This solution is key for the integration of variable renewable generation sources in the electricity grid. Without storage, these technologies face high curtailment rates; thus, storage is a crucial aspect of enabling a low-carbon grid. To avoid double counting, the emissions impact of distributed energy storage  is accounted for in the variable renewable electricity generation solutions such as wind and solar, and in the electric cars solution.


Distributed energy storage is likely to become a major practice in the coming years and financially beneficial to consumers in the long term. It should have an important role to play in increasing the independence of energy consumers, and in helping to balance the load and supply “behind the meter” (i.e., in a building) with the capacity available on the grid. Distributed energy storage is also a key resource for ensuring the reliability of electrical energy services. As a result of these many benefits, it can be expected that adoption of distributed energy storage will increase greatly in the coming years, making it an important part of the changing energy landscape.

However, due to inefficiencies in energy storage and high carbon dioxide emissions associated with the manufacturing of batteries, the use of distributed energy storage might not imply a reduction in emissions when considered in isolation. When vehicle-to-grid storage—connecting an electric vehicle to the grid to store electricity for later use—is considered alongside the increased integration of renewable energy sources for electricity generation, the impacts may prove more favorable. The emissions avoided from diesel and gasoline more than balance the emissions resulting from the manufacturing of batteries. As such, electric vehicles used as distributed energy storage can provide a significant climate benefit. Developing infrastructure and policy frameworks to promote adoption of vehicle-to-grid storage is therefore crucial as electric vehicle penetration increases.