Potential effects of distributed solar on retail electricity prices

Concerns about the potential impacts of net-metered PV on retail electricity prices have led to an array of proposals to reform rate structures and net metering rules for solar customers. These proposals have typically been met with a great deal of contention and often absorb substantial time and administrative resources, potentially at the expense of other issues that may ultimately have greater impact on utility ratepayers.

Given those tradeoffs, this paper seeks to help regulators, utilities, and other stakeholders gauge how much attention ought to be given to evaluating and addressing the possible effects of distributed solar on retail electricity prices.

Drawing on a combination of back-of-the-envelope style analyses and literature review, we characterize the potential effects of distributed solar on retail electricity prices, at both current and projected future penetration levels, and compare these estimates to a number of other important drivers for future retail electricity prices. The objective is neither to dismiss concerns nor to raise alarm, but rather to provide metrics and benchmarks that may help to set priorities. Download report


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The Global Smart Energy Federation (GSEF) is a global stakeholder organization committed to creating smarter, cleaner electrical systems around the world.

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Talking in workshop on Digital Technologies for efficient management and grid integration of Distribution Solar PV Systems pic.twitter.com/r5Jfk9EK0c — Raj Pratap Singh (@RajPratapSingh) July 26, 2023

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The Global Smart Energy Federation (GSEF) is a global stakeholder organization committed to creating smarter, cleaner electrical systems around the world. GSEF is comprised of national smart grid organizations from fifteen countries and the European Union..

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