Distributed energy resources are increasingly proving their capacity to deliver affordable and clean electricity, according to a new briefing note from the Institute for Energy Economics and Financial Analysis (IEEFA).
The report examines how small-scale power generation and storage technologies, including rooftop solar, solar irrigation pumps, biogas and batteries, are reshaping energy systems in Australia, India and Bangladesh.
The briefing note, titled Role of distributed resources in energy transition: A multi-country perspective, identifies rooftop solar as the single biggest driver of DER growth across all three countries, though each market is progressing along a distinct path shaped by policy, infrastructure and financing conditions.
Australia stands out as a global leader in DER adoption, with solar panels now installed on around 40 per cent of homes.
Rooftop solar surged from near zero to more than 13 per cent of generation in the National Electricity Market between 2014 and 2025, while coal’s share fell from 75 per cent to 52 per cent over the same period.
The shift has pushed wholesale electricity prices close to zero or negative during the middle of the day in most regions.
“Rooftop solar has reshaped Australia’s grid, cutting deep into coal’s share of generation,” said Jay Gordon, Energy Finance Analyst, Australian Electricity at IEEFA and a co-author of the note.
“Now residential batteries are emerging as the next frontier, with the uptake seen since the launch of the Cheaper Home Batteries Program in July 2025 far exceeding what most forecasts expected.”
In Bangladesh, DER growth is being driven largely by industrial interest in rooftop solar.
While government data puts installed rooftop solar capacity at 415.9 megawatts, IEEFA’s analysis found combined capacity across just 239 establishments has already reached 667 megawatts, potentially reaching 1,000 megawatts if smaller units are included.
The growth appears to be already reducing daytime power demand, and the country’s diesel-dependent irrigation sector offers further opportunity, with a full transition potentially adding 4,000 megawatts of capacity and cutting the annual diesel import bill by around US$244 million, according to co-author Shafiqul Alam, Lead Analyst, Bangladesh Energy, IEEFA South Asia.
India, meanwhile, holds substantial untapped potential. Government assessments put the technical potential of rooftop solar alone at 637 gigawatts, while more than 29 million irrigation pumps across the agriculture sector could be solarised.
Growth has been supported by two flagship government schemes, PM Surya Ghar Muft Bijli Yojana and Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan, backed by a mix of business models that have broadened market participation.
Even so, India’s DER solar capacity, while rising sharply from 1.8 gigawatts in FY2018 to 31.5 gigawatts in FY2026, has held at roughly 21 to 22 per cent of total renewable capacity over that period, as utility-scale solar has expanded even faster.
“In India, DER growth has been driven by two flagship schemes, backed by diverse business models, including capital expenditure, renewable energy service company or operating expenditure, and utility-led implementation models. These schemes have broadened market participation and accelerated DER deployment across urban and rural areas,” said co-author Gaurav Upadhyay, Energy Finance Specialist, India Sustainable Finance, IEEFA South Asia.
The report notes meaningful differences across the three countries in approval timelines, smart meter rollout and access to financing.
Its authors call for equitable access to DER, expanded battery storage alongside solar programmes, wider smart meter deployment and streamlined financing for households, farmers and small businesses to accelerate adoption going forward.