MIT Study: Utility-Scale Renewables not Linked to Higher Power Prices, Rooftop Solar Tied to Increases – IndexBox

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Investigators at the Massachusetts Institute of Technology have determined that renewable portfolio standards and large-scale renewable generation are not linked to elevated household power rates in the United States, whereas rooftop solar is tied to steeper prices, as reported by pv magazine. The conclusions stem from a working paper authored by Fischer J. Espiritu Argosino and Christopher R. Knittel of the MIT Center for Energy and Environmental Policy Research.
The pair constructed a state-utility panel covering 1998 through 2023 that ties together residential rates, the severity of renewable portfolio standards, generation blends and utility expenditures, relying on information from the US Energy Information Administration, the Federal Energy Regulatory Commission and Lawrence Berkeley National Laboratory.
Applying a two-way fixed effects regression model that adjusts for unobserved variations across years and among states, the authors found that renewable portfolio standards exert essentially no influence on prices, while utility-scale renewables show a modest connection to cheaper prices. Utility-scale solar especially demonstrated a strong association with reduced prices.
According to the paper’s regression coefficients, which gauge generation shares against coal, a 10-percentage-point gain in utility-scale solar’s portion of generation corresponds to residential prices slightly more than 8% lower. A 5-percentage-point gain in rooftop solar’s portion corresponds to prices about 16% higher. The authors warned that these outcomes are correlations and indicated that subsequent research will employ more rigorous econometric methods to bolster the causal reading of the estimates.
The researchers proposed one rationale for the utility-scale finding: sizable solar installations might alleviate network congestion and exert downward pressure on overall generation expenses since they need no fuel inputs. A second model, which additionally adjusts for variations among utilities, revealed utility-scale solar strongly tied to reduced transmission, distribution and total operation and maintenance costs.
Regarding rooftop solar, the researchers proposed that tariff design might partially account for the result. They observed that existing rate structures in certain states transfer fixed costs connected to rooftop solar from system owners to other ratepayers, meaning those lacking rooftop solar frequently subsidize those who possess it via an extra volumetric rate.
Rooftop solar also showed a strong correlation with elevated distribution operation and maintenance costs. The researchers attributed this to the distribution network having been built without bidirectional power flows in mind.
CEEPR does not subject working papers to peer review before posting them. The researchers stated that policymakers can achieve an affordable energy future by enhancing the integration of low-cost renewables while adopting more equitable cost recovery approaches.
A June 2025 study from Lawrence Berkeley National Laboratory headed by Ryan Wiser arrived at a comparable conclusion regarding utility-scale renewables, discovering that the approximately 75% of US utility-scale wind and solar constructed outside renewable portfolio standard programs had no widely apparent upward impact on retail prices.
The rooftop solar result contributes to a longstanding conflict over cost-shifting in California. The California Public Utilities Commission’s Public Advocates Office has calculated 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 determined instead that rooftop solar produced a $1.5 billion net benefit for all California ratepayers. Solar proponents have likewise contended that growing transmission and distribution expenditures are a bigger factor behind rate hikes.
The researchers detailed their results in a paper titled Renewables and Electricity Affordability: Untangling Correlation from Causation, issued as MIT CEEPR Working Paper 2025-22.
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