The Federal Energy Regulatory Commission opened a door for small-scale solar and battery systems to compete in wholesale electricity markets, and rural cooperatives across the United States are now wrestling with what that means for their grids, their members, and their business models. The shift is not theoretical: federal financing, new regulatory dockets, and utility-level data tracking are all moving in the same direction, pushing distributed energy deeper into communities that have historically depended on centralized power plants hundreds of miles away.
FERC Order 2222 and the New Market Rules
The core regulatory change driving this shift is FERC Order No. 2222, filed under docket RM18-9-00. The order requires regional transmission organizations (RTOs) and independent system operators to allow distributed energy resource (DER) aggregations, including solar paired with battery storage, to participate in wholesale electricity markets and earn wholesale compensation. Before this rule, minimum size and performance thresholds effectively locked out smaller installations. Telemetry and metering costs added another barrier, pricing many rural operators out of participation.
The practical effect is a structural rewrite of who can sell power and where. A rooftop solar array paired with a home battery in rural Missouri or a tribal community in the Southwest can now, in principle, be bundled with similar systems and bid into the same markets that serve large industrial customers. That aggregation model shifts the electricity system away from centralized supply built around remote power plants with large installed capacities toward a more distributed architecture that offsets demand locally. For rural households paying some of the highest per-kilowatt-hour rates in the country, the financial stakes are real.
Federal Dollars Flowing to Rural Clean Energy
Regulatory access means little without capital, and the U.S. Department of Agriculture has moved to fill that gap. In a January 10, 2025 press release, USDA announced billions in investments through its New ERA and Powering Affordable Clean Energy (PACE) programs to help rural communities finance clean energy, including solar and storage projects. The announcement specifically referenced the Navajo Tribal Utility Authority as a PACE award recipient, though USDA later issued a correction clarifying the exact award amount and loan financing figures tied to that project.
That correction is a small detail with a larger lesson: the dollar figures in federal clean energy programs are large enough and complex enough that even the agencies distributing them need to double-check. For rural electric cooperatives and tribal utilities, USDA financing represents a way to install solar-plus-battery systems without shouldering the full upfront cost. The combination of FERC market access and USDA capital support creates a two-sided incentive: earn revenue by selling stored solar power into wholesale markets while reducing dependence on purchased electricity from distant generators.
Tracking the Growth in Distributed Solar and Storage
The U.S. Energy Information Administration provides the clearest national picture of where distributed solar and paired storage are showing up. Form EIA-861, the Annual Electric Power Industry Report, collects utility-reported data on distributed generation, net metering, and photovoltaic capacity across every U.S. utility. The dataset includes explicit categories for PV and for “storage systems paired with net-metered PV,” a tracking distinction that did not exist in earlier reporting years.
The fact that EIA now breaks out paired storage as its own category signals how quickly the technology mix is changing. Rural cooperatives that once reported only conventional generation sources are now filing data on battery systems co-located with solar panels. The dataset does not yet offer granular breakdowns that isolate small rural co-ops from larger utilities in every state, but its existence as a standardized federal reporting requirement means the trend is measurable and increasingly visible to regulators and investors alike.
State Regulators Caught Between Federal Rules and Local Grids
Federal orders set the framework, but state commissions decide how the rules hit the ground. The Missouri Public Service Commission opened docket EW-2021-0267 specifically to examine the implications of FERC Order 2222 at the state level. That working case has received filings and comments from stakeholders grappling with how DER aggregation will affect distribution grid reliability, cost allocation, and the operational independence of rural cooperatives.
This is where the tension sits. FERC’s order tells RTOs to open their markets. But the physical grid that connects a rural co-op member’s solar-plus-battery system to the broader transmission network is managed by local distribution utilities operating under state jurisdiction. Coordination among the RTO, the aggregator bundling small systems together, the distribution utility responsible for local reliability, and state regulators overseeing all of it requires careful sequencing. Missouri’s docket illustrates a pattern likely repeating in other states: commissions are studying Order 2222 not to block it but to figure out how to implement it without destabilizing grids that serve communities with limited backup options.
Global Parallels and Sustainability Limits
The rural solar-plus-storage story is not uniquely American. In Zambia, researchers have documented that while electrification has expanded, the pace of rural connections remains slow and mini-grid projects often face sustainability challenges tied to financing, maintenance, and local capacity. Many of the same questions surface in U.S. co-op territories: who pays for long-term upkeep, how are benefits shared, and what happens when grant cycles end or market rules change?
Another emerging parallel comes from the intersection of agriculture and energy. Globally, agrivoltaic systems are being tested as a way to colocate crops and panels, with one analysis describing how integrating solar into fields can support both rural incomes and sustainable food production. For U.S. cooperatives whose members are often farmers and ranchers, these experiments abroad underscore that solar and storage are not just about keeping the lights on. They are also about reshaping land use, water management, and local economies.
These global examples highlight a hard limit: technology alone does not guarantee durable rural electrification. Whether in Zambia’s mini-grids or Midwestern co-op territories, long-term success depends on governance structures that can manage shared assets, transparent pricing that keeps systems solvent, and training so local workers can operate and repair equipment. If rural solar and storage deployments in the United States overlook these social and institutional dimensions, they risk repeating patterns of boom-and-bust investment seen in other countries.
Rural Cooperatives at a Crossroads
For rural electric cooperatives, the convergence of FERC’s market reforms, USDA’s financing programs, and EIA’s new data categories is forcing strategic decisions. Some co-ops may choose to become DER aggregators themselves, bundling member-owned systems into wholesale bids. Others may focus on hosting third-party aggregators while concentrating on grid operations and member services. Still others may resist rapid change, worried that unmanaged injections of rooftop solar and batteries could strain aging distribution infrastructure.
What is clear is that the status quo, buying nearly all power from large generators and passing costs through to members, is becoming harder to defend as federal policy and market rules evolve. Members who see neighbors earning revenues from their batteries or paying lower bills thanks to solar will pressure boards to adapt. At the same time, co-ops remain responsible for reliability in territories where outages can be life-threatening and where alternative service providers are scarce.
The next few years will likely determine whether distributed solar and storage become core tools for rural resilience or remain niche projects layered on top of an unchanged centralized system. FERC Order 2222 has opened wholesale markets, USDA has put substantial capital on the table, and EIA has begun to track the shift in detail. The remaining work, aligning state regulations, co-op governance, community expectations, and on-the-ground engineering, will decide whether rural America can turn these opportunities into lasting, locally controlled energy systems.
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*This article was researched with the help of AI, with human editors creating the final content.
