Colorado Requires 50 MW of Community Solar Paired with Storage Annually

en.Wedoany.com Reported - Colorado is advancing a dispatchable distributed generation (DDG) program to co-locate community-scale solar with medium-sized battery storage, easing grid strain from rising electricity prices and growing demand.

Average energy bills in Colorado have risen more than 27% over the past five years, and energy demand is projected to grow 57% over the next two decades. The Colorado Public Utilities Commission approved the DDG program last year, requiring the state's larger investor-owned utilities—primarily Xcel Energy—to procure at least 50 MW of community-scale solar co-located with medium-sized batteries annually in 2026 and 2027. Xcel Energy issued the program's first competitive solicitation, a national first, a few weeks ago.

Dispatchable distributed energy resources co-locate medium-sized batteries with solar, storing electricity during the day and discharging it during peak demand to provide around-the-clock power. Projects typically range from 1 to 5 MW and can be sited near communities for direct connection to local distribution grids, avoiding costly transmission upgrades, or located in grid-constrained areas.

The DDG program is based on competitive procurement, with evaluations based not only on generation costs but also on project location and overall value to the grid. Xcel Energy identifies optimal locations for new capacity through resource planning, developers submit project proposals accordingly, and regulators oversee the process and assess customer value.

The program opens a competitive market to distributed energy suppliers, leveraging private investment to deliver grid capacity years faster and at lower cost than utility self-builds, while filling near-term capacity gaps and alleviating peak pressure. DDG is designed to prioritize deployment speed, removing project barriers including interconnection timelines. The program was developed jointly by Xcel Energy, the Colorado Energy Office, consumer advocates, environmental organizations, and solar and storage developers.

Its framework principles include: treating dispatchable distributed resources as legitimate capacity assets; projects competing on measurable system value, including avoided generation, transmission, and distribution costs; utilities identifying needs, developers proposing solutions, and regulators ensuring fairness.

With energy costs rising and grid demand growing across most U.S. states, the program offers a replicable framework for other states, positioning distributed energy resources as tools ready for immediate deployment.