A new working paper from the Massachusetts Institute of Technology finds that 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 ones. The result, from MIT's Center for Energy and Environmental Policy Research (CEEPR), separates two routes for adding solar to the grid that are often discussed as if they carried identical price effects.
Authors Fischer J. Espiritu Argosino and Christopher R. Knittel built a state-utility panel spanning 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). That breadth matters because RPS programs, utility-scale procurement and rooftop adoption expanded on different timelines and in different states, making it hard to read price trends off any single market.
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 tied to higher residential prices. In their summary they state that RPSs had "virtually zero impact" on prices, that utility-scale renewables were modestly associated with lower prices, and that utility-scale solar in particular was strongly linked with lower prices.
Reading the coefficients
The paper's regression coefficients measure generation shares relative to coal, giving the associations a concrete scale. A 10-percentage-point increase in utility-scale solar's share of generation is associated with residential prices just over 8% lower. A 5-percentage-point increase in rooftop solar's share is associated with prices roughly 16% higher.
Because the coefficients are measured against coal as a reference, they describe how shifting the generation mix away from coal and toward a given technology tracks with residential prices, holding the other controls in the model constant. On that basis, the two headline numbers point in opposite directions for what is, physically, the same resource: sunlight.
The authors were nevertheless explicit about what those numbers mean. They cautioned that the results are correlations, and said further work will apply "more rigorous econometric techniques to further strengthen the causal interpretation of these estimates."
Two mechanisms
The paper offers explanations rather than proof. For utility-scale solar, one explanation is that large 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 point to tariff design. They suggest current rate structures in some states shift fixed costs associated with rooftop solar from the owners onto other ratepayers. In effect, they said, those without rooftop solar often fund those who do through an additional volumetric rate. A second factor works through the wires: rooftop solar was strongly correlated with higher distribution O&M costs, which the authors attribute in part to the fact that the distribution network was not designed for bidirectional power flows.
What the paper does and does not settle
Two boundaries frame the findings. First, CEEPR does not peer-review working papers before posting them, so the estimates should be read as preliminary. Second, the authors repeatedly frame their results as associations rather than established causes, a distinction that matters because electricity pricing is shaped by many forces at once.
The utility-scale conclusion is not isolated. A June 2025 LBNL study led by Ryan Wiser reached a similar conclusion, finding 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 result, meanwhile, lands inside 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 the opposite, concluding 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. The CEEPR paper does not resolve that dispute, but its tariff-design explanation points directly at the cost-allocation question at its center.
The researchers close with a policy prescription that pairs the two sides of their findings. "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 framing suggests large plants and distributed generation may require different policy tools: better grid integration on one side, more equitable cost recovery on the other.
The work appears in "Renewables and Electricity Affordability: Untangling Correlation from Causation," published as MIT CEEPR Working Paper 2025-22.