Often the cheapest, and most reliable, distributed power is the power produced at or near the customer. Distributed energy -- often called micropower -- refers to a variety of small, self-contained energy sources located near the final point of energy consumption.

This is in contrast to a more traditional system, where power is generated by a remotely-located, large-scale plant and electricity is sent down power lines to the consumer -- often over vast distances.

RMI's extensive research (culminating in "Small is Profitable," the Economist's 2002 Book of Year) on distributed energy resources found that properly considering the economic benefits of 'distributed' (decentralized) electrical resources typically raises their value by improving system planning, construction, operation and service quality.

Centralized electricity systems with giant power plants are becoming obsolete. In their place are emerging "distributed resources" — smaller, decentralized electricity supply sources (including efficiency) that are cheaper, cleaner, less risky, more flexible, and quicker to deploy. RMI is at the forefront of quantifying the benefits of this approach to enable utilities and other energy providers to justify changing their strategies.

Our research found that if the economic benefits of distributed electrical resources are properly considered, it typically raises their value by improving system planning, construction, operation, and service quality. Electricity production at or near the point of use can greatly improve efficiency and reduce the costs and energy losses associated with the national grid while increasing security and reliability.