Brattle Report Finds California's Distributed Power Plant Program Could Deliver Hundreds of Millions in Cost Savings While Supporting Grid Reliability

New analysis indicates that California's statewide distributed power plant program can provide significant net savings to Californians over the next three years by leveraging home battery storage.

SAN FRANCISCO, Aug. 18, 2025 /PRNewswire/ -- California's statewide Demand Side Grid Support (DSGS) distributed storage program is projected to nearly double in capacity by 2028 and could provide up to $206 million in net cost savings to Californians, according to a new report from The Brattle Group and commissioned by Sunrun and Tesla Energy.

"Our analysis demonstrates that the DSGS program can deliver reliable, utility-scale capacity at a significantly lower cost than traditional solutions," said Ryan Hledik, Principal at The Brattle Group and coauthor of the report. "As more Californians install home batteries, programs like DSGS will be an important opportunity to tap into those batteries to improve energy affordability, enhance system reliability, and advance decarbonization goals."

The Brattle Group report estimates that from 2025 to 2028, the benefits of DSGS significantly outweigh the costs of the program, providing net system cost savings between $28 million and $206 million. Those savings will benefit all grid-connected customers in California. Participants will also benefit from direct compensation for the power they share with the power system.

Launched by the California Energy Commission in 2022, DSGS pays customers to discharge stored energy from residential and commercial batteries during periods of high demand or grid stress. This "distributed power plant" approach helps avoid costly and polluting fossil fuel peaker plants, improves energy affordability, and reduces the risk of rolling blackouts during heatwaves and wildfires.

"Batteries participating in DSGS have scaled to the equivalent capacity of a large natural gas plant over only the past three years," the report said. "Over the next three years, that DSGS battery capacity could double, providing over 1 GW of fast, reliable performance to the California power system."

As part of its research, The Brattle Group reviewed a recent battery dispatch demonstration event in July that delivered over 500 megawatts to the grid – roughly half the peak electricity demand of San Francisco. "There was a visible reduction in net load, with the average reduction of 539 megawatts representing roughly 1.9% of CAISO's net peak demand during the event," the report explained.

Mary Powell, CEO of Sunrun, said, "Brattle's report confirms the incredible power of the massive distributed power plant we have built. Aggregating home generation and storage produces a reliable, flexible energy resource that dispatches at the same scale as multiple peak generation plants to help meet soaring electricity demand. Battery storage customers are at the heart of this home-to-grid solution. They are strengthening the grid, adding value, and delivering cost savings for families across the state."

Colby Hastings, Senior Director of Residential Energy at Tesla Energy, noted that, "This 539 MW VPP test event demonstrates how distributed assets can reliably support the grid at scale and reduce costs for all. With more than 1.8 GW of residential battery capacity already installed in California, the untapped potential is significant. Establishing a permanent pathway for these resources is critical, and we look forward to advancing this work with our customers, partners, utilities, regulators, CAISO, and the legislature."

Looking ahead, the report recommends that the value of the DSGS program could be maximized by increasing flexibility in event triggers, integrating the program's capabilities more fully into state resource planning initiatives, and optimizing dispatch patterns to deliver additional grid services.

The report, The Demand Side Grid Support Program: An Assessment of Scale and Value, is coauthored by Principal Ryan Hledik, Energy Associate Kate Peters, and Senior Energy Analyst Purvaansh Lohiya, and can be found here.

About The Brattle Group
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SOURCE The Brattle Group