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EY, a provider of assurance, tax, transaction and advisory services, has released a report that provides a strategic approach to help utilities thrive amid the rise of distributed energy resources (DER).

The report, "From defense to offense: Distributed energy and the challenge of transformation in the utilities sector," asserts the power and utility industry must shift from its current defensive posture regarding DER and instead go on the offensive and lead the revolution.

According to EY, the value of DER in the form of distributed solar photovoltaic systems has never been more attractive in the U.S., and utilities will increasingly feel the impact on profitability as customers adopt the new technology. Although the company says that there is no one-size-fits-all solution, the report details five imperatives for utilities in order to survive and thrive, including the following:

- Position the utility to compete. Utility leadership teams need to design and commit to a transformation road map that will create a more efficient and effective utility operating model, one that will be able to offer new products and services and compete against new entrants.

- Transform the grid. As DER grows as a market force, the grid must evolve into a more distributed, digital and dynamic system that provides two-way communication between customer locations and the utility.

- Manage the transition. Utilities need to take actions that seek, to the fullest extent possible, full cost recovery of legacy assets to recover investments made and costs incurred in a pre-DER world.

- Focus on the customer. To maximize the benefits of a pro-DER strategy, utilities need to increase their customer knowledge and range of offerings.

- Innovate and accelerate. Utilities should adopt a business model that can adapt to changing conditions - one that captures and provides value in connection with distributed energy.

The report can be downloaded here.

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