Nice to see that hanrahan cannot be neatly categorized.
Short answer - yes.
I'm a little from the green/idealistic part of the spectrum, but I am a bit cautious about distributed power. I think that (at least in the short term) it is unlikely that small distributed power supply systems could go anywhere matching the cost effectiveness of large systems. The electrical distribution systems are not built to support much local power injection and the current solar panel systems (I think) are uncontrolled with the result that the end point voltage is uncontrolled (and can reach potentially dangerous levels for electronic equipment).
I do think that network stability is a soluble problem, but it will require better specification of behaviour of local power sources. Maybe there is a place for government?
I think there is something to be said for letting the market commercialize solutions for whatever the current problem is. Having said that, there is definitely a place for government to help in the area of research to give (neanderthal) industry a start.
Currently the consumer bares very little pain for using power at times when it is precious and costly. The theory is that moving to smart metering, with a corresponding change in rates, will provide a setting to allow distributed power systems to become viable. In practice people will not want to cook dinner at 3:00am just to save money, and in the short term net cost to the consumer will increase (which in due course will be a trigger to force a change).
However, if there was sufficient commercial incentive, then I'm sure some enterprising business will provide a local power solution. I find the electric car battery solution interesting. I would think that the battery charge/discharge cycling would not be an issue for such batteries. Even the miserly battery in my Prius is capable of supplying sufficient power for our peak usage at home, which is small compared to daily commuting requirements. However, human nature being what it is, I suspect that most people could not be bothered plugging and unplugging an electric car, which will be ironic because the battery is essentially free and that makes such a system economically viable. The battery replacement model seems much more likely to be accepted by the consumer.
You might be interested to know that the mob who want to do battery replacement are also in the market to to supply peak power back to power companies using their batteries that they keep ready for customers to use. So I guess they don't reckon the charge/discharge cycles is an issue. They reckon that power sourced from wind/solar is cheap enough to compete with power from petrol and will indeed be doing what you suggest. That is taking cheap off peak renewable power to charge their batteries, and then supplying peak power back to the network. In this case it is not a fully distributed system. There would be a relatively small number of middle sized businesses providing peaking power and the control problem of a fully distributed system is less.
The combined (heat/power/hot water) system from CFU has been mentioned in this thread and whilst it is still a fossil fuel energy source is so much more efficient that it may well provide a useful transition technology. It all depends on the price! And the price all depends on the demand! And maybe that's another place for the government to get it over the price tipping point.
