MIT researchers 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.
The findings come from Fischer J. Espiritu Argosino and Christopher R. Knittel of the MIT Center for Energy and Environmental Policy Research (CEEPR). The two built a state-utility panel covering 1998 to 2023 that links residential prices, RPS stringency, generation mixes, and utility spending, drawing on data from the US Energy Information Administration, the Federal Energy Regulatory Commission, and Lawrence Berkeley National Laboratory.
Using a two-way fixed effects regression model that controls for unobserved differences across years and between states, the researchers concluded that RPSs have essentially no effect on prices, while utility-scale renewables are modestly associated with lower prices. Utility-scale solar in particular, they said, is strongly linked with lower prices.
Solar's generation share and residential rates
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 utility-scale solar may cut costs
One explanation the researchers offered 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 controlled 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 researchers suggested that tariff design may partly explain the result. They noted that current rate structures in some states shift fixed costs associated with rooftop solar from system owners onto other ratepayers, meaning that households 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. The researchers attributed this in part to the distribution network not having been designed for bidirectional power flows.
CEEPR does not peer-review working papers before posting them. 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.
Earlier evidence and an ongoing cost dispute
The utility-scale conclusion echoes a June 2025 Lawrence Berkeley National Laboratory study led by Ryan Wiser, which found that the roughly 75% of US utility-scale wind and solar built outside RPS programs had no broadly discernible upward effect on retail prices.
The rooftop finding 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 found instead 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.