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Virginia Does the Math. Distributed Energy Wins
Published 3 days ago • 5 min read
Oct. 4, 2026
Hi Friend,
I've been rereading Clayton Christensen's The Innovator's Dilemma, and it has me wondering: Is plug-in solar the next disruptive technology?
In Christensen's view, a disruptive technology often starts out inferior to what already exists. But it's cheaper, simpler or more accessible. It finds customers incumbents overlook, then improves until it begins taking market share from them. Legacy companies don't see it coming until it is too late.
It's inferior in that it produces far less electricity than a conventional rooftop solar system.
It's cheaper, costing a few hundred to a few thousand dollars, versus tens of thousands for rooftop solar.
It's as simple to buy as an appliance. In most cases, you don't need an installer or electrician.
It reaches people rooftop solar often leaves out, particularly renters and households that lack the cash or credit for a full system.
And it has room to become more capable as batteries and energy management controls are added.
In just 18 months — warp speed for government — 10 states have passed laws favorable for the technology. As a result, companies are gearing up to make and sell systems in the US, some drawing on their experience in Europe's more mature market. And UL Solutions has created a dedicated US testing and certification program under UL 3700, giving manufacturers a framework for designing plug-in systems for the US market.
Still, critics dismiss plug-in solar as too small to matter.
Maybe they've forgotten the transistor radio. It couldn't match the sound quality of the tabletop radios of its day. But it was cheaper, smaller, and portable — advantages that opened an entirely new market, eventually evolving into AirPods and Spotify.
But what, exactly, might plug-in solar disrupt?
Will it take market share from rooftop solar? Or will it prove to be a gateway technology, introducing more consumers to generating and managing their own electricity — and, in the process, further chipping away at the centralized power model?
It's too early to know. But plug-in solar scored a major win last week when California Gov. Gavin Newsom signed legislation opening its largest state market yet. Read our story: Plug-in Solar Market Opens Jan. 1 in California.
Meanwhile, another kind of distributed-energy disruption is taking shape on the other side of the country.
Policy often makes energy markets, which is why Virginia is now the state to watch. Ground zero for data center growth, the state has put distributed energy and grid flexibility at the center of its strategy for meeting soaring electricity demand.
Headlines are everywhere about the electric grid straining under surging demand from data centers and other large loads. But the more urgent story is: How can the grid evolve to meet this new demand at speed?
Many organizations are reassessing their approach to electric power. If the grid cannot deliver the reliability — or even the access — modern operations require, what alternatives provide resilience without compromising environmental performance or community well-being?
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Batteries, microgrids and other distributed resources are making customers more resilient. So should utilities still carry almost all of the responsibility — and risk — for reliability? Or should some of that risk, and some of the reward, begin to shift to distributed resources? Listen to what Navneet Trivedi, co-founder and COO of Vrinda, has learned after decades working with utilities.
Mitsubishi Electric has released a “chip-to-grid” reference design for next-generation NVIDIA AI infrastructure that explicitly incorporates onsite generation, battery storage and microgrids.
The architecture stretches from the utility connection through onsite generation and batteries to the power supply serving GPUs, while also integrating cooling. It supports both conventional 415/480-V AC and emerging 800-V DC distribution inside the data center. Mitsubishi says the design is intended to scale to gigawatt-class facilities.
During normal operation, Mitsubishi says onsite resources can reduce reliance on the grid. If grid power fails, the facility can switch to autonomous microgrid operation.
The company positions the technology as one of its key strategic initiatives.
California Signs VPP Bills, Nixes Community Solar Bill
Governor Newsom signed two virtual power plant bills. SB 913 and SB 905 last week.
SB 913 removes arbitrary restrictions for customer batteries bidding into the wholesale energy market. SB 905 makes it visible where the grid has room to spare, so utilities stop spending ratepayer money expanding equipment that sits underused for all but a handful of hours a year, according to the California Solar and Storage Association.
While clean energy advocates heralded passage of the bills, they also criticized Newsom for vetoing community solar legislation (AB1813) meant to strengthen the state's less-than-impressive community solar market.
Newsom said he vetoed the community solar bill because it would have "administratively set price for the generation of power that exceeds the value that generation provides to the grid," putting upward pressure on electricity rates.
Derek Chernow, executive director at Californians for Local Affordable Solar & Storage, said the veto means that "California continues to fall further behind other states who are aggressively moving forward with successful community solar programs."
The market case for behind-the-meter (BTM) power at data centers is changing, FTI Consulting says in this detailed market analysis.
"Earlier data center agreements were energy transactions priced to hedge electricity cost; AI-era agreements are capacity transactions, gigawatt-scale, twenty years or longer and priced for guaranteed availability. Consequently, BTM is best evaluated through a broader lens that incorporates speed-to-power, reliability, risk, operational resilience and contract structure."
Since late last year, the grid operator has made an extraordinary number of policy proposals, and much of it was in a short stretch between June and August 2026, writes Mary Yang, COO and senior energy advisor at 804 Advisory
As Yang sees it, the press headlines captured the larger themes—like political pressure from governors and the Reliability Backstop Procurement (RBP) proposal—but missed how the pieces relate.
Yank offers five interesting PJM developments that flew under the radar.
Former US Energy Secretary Jennifer Granholm explains why the power industry should watch the progress of solid-state transformers.
"We’ve spent years obsessing over how to produce more electrons. I know I sound like a broken record here, but the next clean-tech revolution isn't just about generation—it's about using the grid we already have with software-grade intelligence," she writes on LinkedIn.
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