Renewable portfolio standards (RPS) and utility-scale renewable generation are not associated with higher US residential electricity prices, while rooftop solar is associated with higher prices, according to new research from the Massachusetts Institute of Technology (MIT). The finding, from the university's Center for Energy and Environmental Policy Research (CEEPR), challenges the common assumption that clean-energy mandates and renewable generation broadly drive up household power bills.
The authors, Fischer J. Espiritu Argosino and Christopher R. Knittel, built a state-utility panel covering 1998 to 2023. The dataset links residential prices, RPS stringency, generation mixes and utility spending, drawing on data from the US Energy Information Administration (EIA), the Federal Energy Regulatory Commission (FERC) and Lawrence Berkeley National Laboratory (LBNL). The panel structure allows the study to compare states and years while accounting for differences that are not directly observed.
What the analysis found
Using a two-way fixed effects regression model that controls for unobserved differences across years and between states, the researchers report that RPSs and utility-scale renewables are not associated with higher residential prices.
"Instead, RPSs have virtually zero impact on prices and utility scale renewables are modestly associated with lower prices; in particular, utility-scale solar is strongly linked with lower prices," the researchers said in a summary of the paper.
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. A 5-percentage-point rise in rooftop solar's share, by contrast, is associated with prices roughly 16% higher. The magnitudes therefore differ both in direction and in scale between the two segments of the solar market.
Because the coefficients express generation shares relative to coal, the results describe price differences tied to the composition of a state's electricity mix rather than to an isolated change in a single technology.
The authors cautioned that the results are correlations, not proof of cause and effect, and said further work will apply "more rigorous econometric techniques to further strengthen the causal interpretation of these estimates."
Why the two segments diverge
The researchers offer a physical explanation for the utility-scale result. "One explanation is that large solar plants may reduce network congestion and place downward pressure on overall generation costs because they do not require fuel inputs," they said.
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. That result suggests the price relationship may run through the cost structure of the grid rather than through generation charges alone.
Together, the two models separate the effect that utility-scale solar has on generation costs from its effect on network and utility expenses, both of which the study links to lower costs rather than higher ones.
For rooftop solar, the researchers pointed to tariff design as a possible factor. "One possible reason for this is that current rate structures in some states shift fixed costs associated with rooftop solar from the owners onto other ratepayers," they said. "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. "One reason for this is that the distribution network was not designed for bidirectional power flows," the researchers said. In other words, the parts of the system that host distributed generation were not originally built for two-way electricity movement, which the study links to higher operating costs.
Context and the California dispute
CEEPR does not peer-review working papers before posting them, a boundary the authors acknowledge by describing the results as correlations pending further causal testing. The authors set out their findings in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.
The utility-scale conclusion 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 than residential solar.
The researchers framed the policy implication in terms of both integration and cost recovery: "Policymakers can secure an affordable energy future by improving the integration of low-cost renewables while implementing more equitable cost recovery strategies," they said. The study's central caveat remains that its estimates are associations drawn from historical data, and that the rooftop solar and utility-scale results are not symmetric in either size or direction.