Researchers at the Massachusetts Institute of Technology's Center for Energy and Environmental Policy Research (CEEPR) 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 built a state-utility panel covering 1998 to 2023. It 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.
What the regressions show
Using a two-way fixed effects regression model that controls for unobserved differences across years and between states, the researchers found that RPSs and utility-scale renewables are not associated with higher residential electricity prices. In a summary of the paper, they said RPSs have virtually zero impact on prices, utility-scale renewables are modestly associated with lower prices, and utility-scale solar in particular is strongly linked with lower prices.
The paper's regression coefficients measure generation shares relative to coal. On that basis, a 10-percentage-point rise in utility-scale solar's share of generation is associated with residential prices just over 8% lower. By contrast, 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. They said further work will apply more rigorous econometric techniques to strengthen the causal interpretation of the estimates.
Two different mechanisms
One explanation offered for the utility-scale result 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.
For rooftop solar, the researchers suggested that tariff design may partly explain the result. They said one possible reason is that current rate structures in some states shift fixed costs associated with rooftop solar from the owners onto other ratepayers. In effect, this means that those without rooftop solar often fund those who do through an additional volumetric rate.
Rooftop solar was also strongly correlated with higher distribution O&M costs. The researchers said one reason is that the distribution network was not designed for bidirectional power flows. That points to a physical as well as an economic constraint: distributed generation changes how the grid must be operated and maintained, and those costs surface in the same accounting categories the study examines.
Caveats, prior work and a California dispute
CEEPR does not peer-review working papers before posting them, a limitation the authors acknowledge by describing the findings as correlational. 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 conclusion on utility-scale renewables echoes a June 2025 LBNL study led by Ryan Wiser. That work 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 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.
Those competing estimates help explain why the MIT authors frame their numbers carefully. The study separates RPS policy effects from those of utility-scale and rooftop generation, and it isolates cost categories, but the paper's own language treats the relationships as associations rather than proven causes. The California dispute also shows that the boundary chosen for the accounting—whether a technology's benefits are credited against its costs—can reverse the sign of the result.
The researchers described their findings in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.