Making room for resilience: Reflections from the grid edge

2025 Residential Products, Programs, and Services
Resilience has become an increasingly prominent theme in utility and regulatory discussions, spurred by the rising frequency and severity of weather-related disruptions. We're exploring this topic more deeply, given the industry’s heightened focus on resilience and the evolving conversation around distributed energy resources (DERs).

While resilience is gaining visibility, especially in the context of grid modernization and climate adaptation, its consideration in DER planning and valuation remains nascent. The terms resilience and reliability are still often used interchangeably, and resilience is typically assessed using conventional reliability metrics – like frequency and duration of outages. There is a critical lack of consistent definitions, valuation frameworks, and performance metrics. And although DERs – like solar, storage, and microgrids – can clearly support resilience by supplying local power during grid disruptions, that value is rarely quantified or compensated directly. As we have seen it, compensation for most DERs related to resilience is indirect, categorized under associated values such as reliability or peak load reduction.

Some states and regions – such as New York, Illinois, and California – are increasingly incorporating resilience into utility filings and policy frameworks, often as a response to recent high-impact weather events. In other areas, resilience may be recognized but lacks the necessary support, such as clear regulatory structures or investment mechanisms. As a planning priority, it remains unevenly developed across the country.


Defining resilience distinctly from reliability is a necessary first step – and several efforts, including those led by National Renewable Energy Laboratory (NREL), New York State Energy Research and Development Authority (NYSERDA), and the Department of Energy (DOE) have started to do so. While reliability focuses on maintaining consistent service during routine conditions and short-term disruptions, resilience is landing closer to the concepts of withstanding, adapting to, and recovering from high-impact, low-probability events – like wildfires, hurricanes, or human-induced activities (cyberattacks).

The ability to anticipate, prepare for, and adapt to changing conditions and withstand, respond to, and recover rapidly from disruptions. — NREL and NYSERDA definition of resilience[1]

The distinction often hinges on factors such as duration (longer outages lasting days or weeks), spatial extent (disruptions across broader geographic areas), event severity (extreme or compounding events), and economic impact (wider societal losses beyond lost load). Notably, the applicability of this definition may vary across jurisdictions and may need to be reasonably adapted to specific jurisdictional context. A clear definition of resilience though will inevitably lead to the development of the new metrics reflective of DER capabilities, new planning frameworks, and better direction for valuation and monetization research.

DERs at the grid edge offer a range of resilience-enhancing capabilities, but their contributions are highly context-dependent and still being systematically defined. Several efforts have emerged to classify DERs based on their specific resilience attributes – such as islanding capability, black-start functionality, dispatchability, and backup duration. For example, the NARUC’s Valuing Resilience for Microgrids[2] and Advancing Electric System Resilience with Distributed Energy Resources: A Review of State Policies[3] work have mapped how different technologies perform under stress conditions. However, this field is still evolving, and one complicating factor is that resilience is often delivered not by a single DER, but by a coordinated suite of technologies, such as solar paired with storage and smart inverters, working in tandem. This system-level interplay means that assessing resilience value requires looking beyond individual assets to consider how combinations of DERs can maintain critical services during prolonged outages or grid failures.


Identify and quantify value streams

As the industry begins to define resilience more clearly and identify the technical capabilities of DERs that support it, the next major hurdle is valuation. Unlike traditional reliability investments, which have established methodologies for assessing avoided outages or deferred infrastructure, valuing DERs for their resilience benefits remains complex and often context-specific. Resilience benefits are hard to quantify with conventional cost-effectiveness tests. Moreover, these benefits often materialize under rare but high-impact scenarios, making them difficult to forecast or model probabilistically. Adding to the complexity is the above-mentioned fact that the greater resilience value is likely delivered through a stack of coordinated assets – like solar, storage, and automated controls – working in tandem. This interdependence challenges traditional asset-level valuation approaches and calls for more holistic system-level assessments. While emerging methods – such as those piloted by the DOE, NARUC, and NYSERDA – are beginning to account for avoided societal costs, critical load protection, and risk reduction, consistent application and regulatory adoption remain limited. To advance this work, valuation frameworks must evolve to explicitly recognize resilience as a standalone value stream, capture synergies across DER portfolios, and provide utilities and regulators with the tools to assess when, where, and how resilience investments deliver the greatest impact. In addition to evolving valuation frameworks, innovative data collection and analytical methodologies are needed to more accurately capture DER resilience value.


Develop compensation structures and mechanisms

As valuation frameworks for DER resilience mature, a parallel effort is needed to establish mechanisms for monetization – that is, turning theoretical value into real, recurring compensation for the resilience services DERs provide. Today, most DERs that support resilience do so without direct financial recognition; instead, resilience value, while generally recognized, is either bundled into broader program goals (like demand response or peak load reduction) or delivered through one-time grants and incentives. However, a few early examples are beginning to chart a path forward including NYSERDA’s Resilient Energy Systems[4], Tennessee Value Authority’s ARCHER Project[5], as well as in the private sector through “resilience-as-a-service” models, where third-party providers install and operate DER systems – often microgrids – for commercial or institutional customers in exchange for fixed payments or service contracts. Still, these examples remain the exception, not the norm. Widespread monetization will require clear tariff structures, performance criteria, and cost-allocation methodologies that enable resilience to function as a standalone value stream – distinct from, but complementary to, traditional grid services. Without such mechanisms, DER resilience will remain undercompensated, limiting investment and deployment in the communities that may need it most.


Set planning priorities and supportive recovery structures 

Recognizing and compensating DERs for resilience benefits delivered to a targeted subset of facilities – such as critical infrastructure or vulnerable communities – remains a significant regulatory challenge. While these assets can provide life-saving services during grid outages, the costs are often borne by all ratepayers, prompting questions of fairness, equity, and value. In some cases, resilience investments are justified through their public-good nature, contribution to community-wide benefits, or alignment with climate and equity goals. However, these cases remain the exception rather than the rule. To make this approach more widespread, regulators and utilities need clear, standardized frameworks for valuing resilience – including benefit-cost methodologies that account for avoided disruptions, societal losses, and indirect community benefits. It also requires stronger policy guidance, public communication, and thoughtful integration of resilience into utility planning processes – so that resilience is no longer seen as a niche or exceptional case, but as a core, shared objective of modern grid investment

At the same time, it is essential to ensure that resilience investments actually reach the communities who need them most. At the distribution level, where infrastructure is particularly vulnerable to hazards such as wind, flooding, and wildfires, challenges to resilience are especially severe – and these vulnerabilities tend to disproportionately impact underserved communities. These same communities often face socioeconomic and structural barriers that slow or prevent recovery, resulting in longer outages, deeper losses, and greater long-term harm.

“We find a correlation between high levels of vulnerability and low levels of resilience, suggesting that indeed there is a trend where the most vulnerable counties are also the least resilient.” [6]

Studies have consistently shown a strong correlation between social vulnerability and reduced resilience levels, underscoring the need for more targeted, inclusive strategies. By directing DER-driven resilience efforts – such as community solar+storage, microgrids, and critical load support – to these high-need areas, resilience planning can deliver not only technical value but also social equity. In this context, cost socialization may be not only justified but necessary to ensure fair access to resilience as a public good – helping close resilience gaps while maximizing societal benefit.


Final thoughts

Resilience is no longer a fringe consideration – it is rapidly becoming a defining test of our energy systems’ fitness for the future. As climate risks intensify and grid-edge technologies mature, we face both a technical imperative and a moral opportunity: to intentionally integrate resilience into DER planning, valuation, and compensation in ways that prioritize the people and places most at risk. This means moving beyond narrow metrics and siloed programs toward comprehensive, equity-centered frameworks that treat resilience as a shared, system-level objective. Making room for resilience will require more than modeling and tariffs – it will require rethinking how we define value, who we design for, and what success looks like in an era of compounding disruptions. It’s a challenge – but also a chance to align our tools, investments, and intentions with the realities of a rapidly changing grid and a warming world.

 


 

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As resilience gains urgency, utilities face a gap in how it’s defined, valued, and integrated into DER planning.