U.S. power prices fall with utility-scale solar, rise with rooftop

A new MIT study looking at electricity data from 1998 to 2023 found that big, utility-scale solar and wind farms are linked to lower residential power prices, not higher ones. State rules requiring utilities to use more renewable energy (called renewable portfolio standards) showed almost no effect on prices either way. The researchers think large solar plants help because they don't need fuel and may ease strain on the power grid.

Rooftop solar told a different story: a 5-percentage-point rise in rooftop solar's share of generation was linked to electricity prices roughly 16% higher. The researchers point to two likely reasons. First, rate structures in some states shift fixed grid costs away from solar panel owners and onto other customers, meaning people without rooftop solar end up covering some of those costs. Second, the power grid was built for electricity flowing one way, from power plants to homes, and rooftop solar sends power back the other way too, which can raise maintenance costs for utilities.

If you're weighing solar for your own roof, this doesn't mean rooftop solar is a bad investment for your household bill, but it does help explain why some states and utilities are rethinking how they charge solar and non-solar customers alike. This fits into a broader fight, especially in California, over how much rooftop solar costs or saves other ratepayers, with competing studies landing on very different numbers. If you're considering solar, it's worth checking how your state and utility structure rates for solar customers, since that can affect your actual savings.