A working paper from the Massachusetts Institute of Technology's Center for Energy and Environmental Policy Research (CEEPR) concludes that US renewable portfolio standards (RPS) and utility-scale renewable generation are not linked to higher residential electricity prices, while rooftop solar is associated with higher ones. The study was produced by Fischer J. Espiritu Argosino and Christopher R. Knittel and released as MIT CEEPR Working Paper 2025-22, titled "Renewables and Electricity Affordability: Untangling Correlation from Causation."
The authors describe their estimates as correlations rather than proof of causation.
What the analysis covered
The researchers built a state-utility panel covering 1998 to 2023, combining residential prices, RPS stringency, generation mixes and utility spending. The dataset draws on the US Energy Information Administration (EIA), the Federal Energy Regulatory Commission (FERC) and Lawrence Berkeley National Laboratory (LBNL). Their primary model is a two-way fixed effects regression intended to control for unobserved differences across years and between states.
Utility-scale solar and lower prices
In the researchers' summary, RPS requirements had virtually zero impact on residential prices, and utility-scale renewables were modestly associated with lower prices, with utility-scale solar showing the strongest relationship in that direction. Based on the paper's regression coefficients, which measure generation shares relative to coal, a 10-percentage-point increase in utility-scale solar's share of generation corresponds to residential prices just over 8% lower.
Why large solar plants may cut costs
One explanation offered by the authors 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 controlled for differences between utilities, found utility-scale solar strongly associated with lower transmission, distribution, and total operation and maintenance (O&M) costs.
Rooftop solar and rate design
The picture changes for rooftop solar. According to the paper's coefficients, a 5-percentage-point rise in rooftop solar's share is linked to residential prices roughly 16% higher. Rooftop solar was also strongly correlated with higher distribution O&M costs.
The authors point to two possible factors. On costs, they note that the distribution network was not designed for bidirectional power flows. On prices, they suggest current rate structures in some states shift the fixed costs associated with rooftop solar from system owners onto other ratepayers; in effect, customers without rooftop solar often fund those who have it through an additional volumetric rate.
Caveats and related evidence
The authors caution that their results are correlations and say further work will apply more rigorous econometric techniques to strengthen the causal interpretation of the estimates. CEEPR does not peer-review working papers before posting them. The findings echo a June 2025 LBNL study led by Ryan Wiser, which found that roughly 75% of US utility-scale wind and solar built outside RPS programs had no broadly discernible upward effect on retail prices.
A contested question in California
The rooftop solar result 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 reached the opposite conclusion, finding 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.
Policy implications
The researchers conclude that policymakers can secure an affordable energy future by improving the integration of low-cost renewables while implementing more equitable cost recovery strategies. Their framing suggests the affordability debate turns less on renewable generation overall than on how its costs are allocated among ratepayers and how the grid is adapted to two-way power flows.