A working paper from the MIT Center for Energy and Environmental Policy Research (CEEPR) finds that renewable portfolio standards (RPS) and utility-scale renewables are not associated with higher US residential electricity prices, 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, using data from the US Energy Information Administration, the Federal Energy Regulatory Commission and Lawrence Berkeley National Laboratory (LBNL).
The authors applied a two-way fixed effects regression model that controls for unobserved differences across years and between states. In a summary of the paper, they stated 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.
Size of the estimated relationship
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. 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.
Why the two paths diverge
One explanation the researchers offer is 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, by contrast, was strongly correlated with higher distribution O&M costs. The researchers pointed to a distribution network that was not designed for bidirectional power flows. Tariff design may add to the effect: rate structures in some states shift fixed costs tied to rooftop solar from system owners onto other ratepayers, so that those without rooftop solar often fund those who have it through an additional volumetric rate.
Wider context
CEEPR notes that it does not peer-review working papers before posting them. The rooftop 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.
A June 2025 LBNL study led by Ryan Wiser reached a similar conclusion on utility-scale renewables, finding that roughly 75% of US utility-scale wind and solar built outside RPS programs had no broadly discernible upward effect on retail prices.
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. Their findings appear in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.