Researchers at the Massachusetts Institute of Technology's Center for Energy and Environmental Policy Research (CEEPR) have found that renewable portfolio standards (RPS) and utility-scale renewable generation are not associated with higher residential electricity prices in the United States, while rooftop solar is linked to higher ones.
Fischer J. Espiritu Argosino and Christopher R. Knittel built a state-utility panel covering 1998 to 2023 that links residential prices, RPS stringency, generation mixes and utility spending. The dataset draws on the US Energy Information Administration (EIA), the Federal Energy Regulatory Commission (FERC) and Lawrence Berkeley National Laboratory (LBNL).
Using a two-way fixed effects regression model that controls for unobserved differences across years and between states, the authors reported that RPSs and utility-scale renewables are not associated with higher residential prices. RPSs had virtually zero impact, they said, while utility-scale renewables were modestly associated with lower prices and utility-scale solar in particular was strongly linked with lower prices.
Regression estimates
Based on the paper's regression coefficients, which measure generation shares relative to coal, the study estimates that:
- A 10-percentage-point rise in utility-scale solar's share of generation is associated with residential prices just over 8% lower.
- A 5-percentage-point rise in rooftop solar's share is associated with prices roughly 16% higher.
The authors cautioned that the results are correlations and said further work would apply "more rigorous econometric techniques" to strengthen the causal interpretation of the estimates.
Why the results diverge
The researchers suggested that large solar plants may reduce network congestion and place downward pressure on overall generation costs because they do not require fuel inputs. A second model, which also controlled for differences between utilities, found utility-scale solar strongly associated with lower transmission, distribution and total operation and maintenance (O&M) costs.
For rooftop solar, the authors pointed to tariff design as a possible partial explanation. "Current rate structures in some states shift fixed costs associated with rooftop solar from the owners onto other ratepayers," they said, noting that households without rooftop solar may fund those with it through an additional volumetric rate.
Rooftop solar was also strongly correlated with higher distribution O&M costs. One reason, the researchers said, is that the distribution network was not designed for bidirectional power flows.
CEEPR does not peer-review working papers before posting them. The researchers concluded that policymakers can secure an affordable energy future by improving the integration of low-cost renewables while implementing more equitable cost recovery strategies.
Wider debate
The rooftop solar finding echoes a June 2025 LBNL study led by Ryan Wiser, which found that roughly 75% of US utility-scale wind and solar built outside RPS programs had no broadly discernible upward effect on retail prices.
The rooftop result also feeds into a long-running dispute over cost-shifting in California. The California Public Utilities Commission's Public Advocates Office has estimated an $8.5 billion cost shift from rooftop solar customers to other ratepayers. A 2025 report by M.Cubed Consulting and the California Solar and Storage Association, by contrast, found that rooftop solar delivered a $1.5 billion net benefit to all California ratepayers. Solar advocates have also argued that rising transmission and distribution spending is a larger driver of rate increases.
The findings appear in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.