Many of the most problematic obstacles facing those who wish to invest in DE are regulatory or policy related rather than technical. In other words, technology and engineering are not the limiting factors preventing faster DE uptake. Outdated or obsolete policy landscapes are the main barriers. The power sector regulation in particular is an historical artifact. Although the very first power plants were DE the physical infrastructure subsequently evolved to large central power plants shipping power over long distances using high voltage transmission networks. The legal and regulatory landscapes naturally evolved to reflect the large scales which had become the norm. Since the late 1970s however, when the average size of generating plants peaked, both utility and non-utility owned plants have been getting smaller and smaller. Smaller does not necessarily mean more decentralized but there is a strong correlation. The policy landscape has not yet adapted to reflect these changes and therefore regulation is still a major impediment to increased decentralized energy investment.

There are many areas where policy can be improved but the most important obstacles can be broken down into the following main categories: