Renewable portfolio standards (RPS) and utility-scale renewable generation are not associated with higher residential electricity prices in the United States, while rooftop solar is associated with higher prices, according to researchers at the Massachusetts Institute of Technology (MIT). The conclusion comes from a working paper that examines how different forms of renewable deployment relate to what households pay for electricity across states and utilities.
The study was written by Fischer J. Espiritu Argosino and Christopher R. Knittel of the MIT Center for Energy and Environmental Policy Research (CEEPR). The authors built a state-utility panel covering 1998 to 2023 that links residential prices, RPS stringency, generation mixes and utility spending. The dataset draws on information from the US Energy Information Administration (EIA), the Federal Energy Regulatory Commission (FERC) and Lawrence Berkeley National Laboratory (LBNL).
By spanning more than two decades and pairing state-level policy with utility-level outcomes, the panel lets the researchers compare prices across jurisdictions and over time while accounting for broad trends. The analysis uses a two-way fixed effects regression model that controls for unobserved differences across years and between states.
What the model found
With those controls in place, the researchers reported that RPSs and utility-scale renewables are not associated with higher residential electricity prices. In their summary of the paper, they said RPSs have virtually zero impact on prices and that utility-scale renewables are modestly associated with lower prices, with utility-scale solar in particular strongly linked to lower prices.
The 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 rather than demonstrated causal effects. They said further work will apply "more rigorous econometric techniques to further strengthen the causal interpretation of these estimates."
Why the two forms of solar differ
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 costs, lower distribution costs and lower total operation and maintenance (O&M) costs.
For rooftop solar, the researchers pointed to tariff design as a possible part of the explanation. They suggested 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 attributed this in part to the fact that the distribution network was not designed for bidirectional power flows, which rooftop generation introduces.
CEEPR does not peer-review working papers before posting them, so the results have not passed through that review. The authors nonetheless framed the policy implication carefully, saying policymakers can secure an affordable energy future by improving the integration of low-cost renewables while implementing more equitable cost recovery strategies.
Consistency with earlier work and an ongoing dispute
The utility-scale conclusion is consistent with earlier research. A June 2025 LBNL study led by Ryan Wiser 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 solar finding, meanwhile, 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 than rooftop solar compensation.
The researchers described their findings in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.