Rooftop Solar Eyes a Seat at the Big Table

Federal rule 2222 is pushing distributed energy closer to wholesale markets, reshaping competition and revenue models nationwide

26 Feb 2026

A rule once discussed in filings and conferences is beginning to alter America’s power markets. FERC Order 2222, adopted in 2020, requires wholesale market operators to let distributed energy resources (DERs), including rooftop solar panels, batteries and demand-response systems, compete alongside large power plants. What looked like a technical reform is turning into a structural shift.

Regional transmission organisations such as PJM, NYISO and the Southwest Power Pool have now drafted compliance plans. These set out how small, scattered assets can be bundled together and bid into energy and capacity markets. Yet implementation is patchy. Timelines differ, testing continues and market rules are still being refined. In most regions, full participation remains a work in progress.

Even so, the commercial stakes are rising. Aggregators including Enel X and CPower are assembling portfolios of residential, commercial and industrial devices to form unified wholesale bids, where rules permit. Access to wholesale markets promises new revenue streams, particularly in capacity markets that reward reliable supply. Investors are watching closely. Wholesale eligibility is seen less as an instant windfall than as a long-term boost to portfolio value, provided markets mature as intended.

The shift also raises operational demands. Small resources must meet strict telemetry, reporting and coordination standards to protect grid reliability. Utilities are upgrading software and visibility tools to monitor a growing web of interconnected devices. At the state level, regulators are revising interconnection rules to align with federal requirements. Greater consistency may ease participation over time, but it also raises the bar for compliance.

Questions persist. Who will pay for grid upgrades needed to accommodate a swelling fleet of distributed assets? And will uneven state readiness slow progress in some regions? Disputes over cost allocation and technical standards could yet delay the rule’s promise.

Still, the direction is clear. As compliance milestones accumulate through 2026, distributed energy is moving from the margins towards the centre of wholesale market design. Firms that invest early in aggregation platforms and compliance systems may find themselves well placed when the smallest generators finally gain a firm foothold in America’s biggest markets.