Distributed Generation (DG) is a sustainable alternative energy paradigm that allows flexible customer-participated demand response management, however when coupled with battery storage in a carbon costed policy setting true reduction of greenhouse gas emissions may not necessarily be rewarded. This paper examines the role of policy settings using an established multi-agent simulation framework that captures emerging complex responses that originate from individual household energy use behaviors. Case studies demonstrate with uninformed policy settings being chosen, undesirable over-generation may cause technical issues with unwanted energy profile responses as well as undesirable over-investment in the wrong electricity assets may cause increased electricity costs for households.