Researchers at the Massachusetts Institute of Technology (MIT) have found that renewable portfolio standards (RPS) and utility-scale renewables are not associated with higher residential electricity prices in the United States, while rooftop solar is associated with higher prices.
Fischer J. Espiritu Argosino and Christopher R. Knittel of the MIT Center for Energy and Environmental Policy Research (CEEPR) built a state-utility panel covering 1998 to 2023. The panel links residential prices, RPS stringency, generation mixes and utility spending, drawing on data from 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 report that RPSs have virtually zero impact on prices and that utility-scale renewables are modestly associated with lower prices, with utility-scale solar strongly linked to lower prices. Based on the paper's regression coefficients, which measure generation shares relative to coal, 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.
Possible mechanisms
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 controls for differences between utilities, found utility-scale solar strongly associated with lower transmission, distribution and total operation and maintenance (O&M) costs.
Rooftop solar and cost shifting
For rooftop solar, the authors pointed to tariff design as a possible partial explanation. They said current rate structures in some states may shift fixed costs associated with rooftop solar from owners onto other ratepayers, meaning those without rooftop solar often fund those who have it through an additional volumetric rate. Rooftop solar was also strongly correlated with higher distribution O&M costs, which the researchers attributed in part to a distribution network that was not designed for bidirectional power flows.
The authors cautioned that the results are correlations and said further work will apply more rigorous econometric techniques to strengthen the causal interpretation of the estimates. CEEPR does not peer-review working papers before posting them.
Wider debate
The findings echo 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 solar result 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, while a 2025 report by M.Cubed Consulting and the California Solar and Storage Association 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 researchers said policymakers can secure an affordable energy future by improving the integration of low-cost renewables while implementing more equitable cost recovery strategies. They described their findings in “Renewables and Electricity Affordability: Untangling Correlation from Causation,” published as MIT CEEPR Working Paper 2025-22.