Researchers at Lawrence Berkeley National Laboratory and The Brattle Group have assessed how eight factors may have influenced state-level electricity price changes from 2019 to 2024, averaged across residential, commercial, and industrial sectors.
Three of the eight factors considered relate to renewables policies and deployment. The statistical analysis covers the past, and does not seek to predict how these factors may affect future electricity prices.
Utility-scale renewables
For the three-quarters of utility-scale solar and wind deployment that occurred “outside” state renewable portfolio standard policies, the analysis found “some evidence of price reduction.”
This “market-based” deployment “may have reduced” retail prices by over 0.5 cents/kWh in “a couple states” and by under 0.5 cents/kWh in many other states.
A PDF presentation of the findings includes the graph below, showing that states with a wind-plus-solar share greater than 30 percent in 2024 had among the lowest retail electricity prices—about 10 cents/kWh. The graph presents a snapshot of prices, while the overall research focused on price changes over five years.
The graph also compares California and Texas, each having renewable generation of almost 30%, showing low prices in Texas and high prices in California.
Net energy metering
Net-energy metered (NEM) solar generation “has benefited adopters while often increasing retail prices, with effects most notable in a small number of states,” the analysis says.
While NEM solar generation reduces some utility costs, fixed costs “must be spread over a smaller sales base under many common rate structures, leading to higher average prices.”
Statistical analysis yielded “imprecise” results but “suggest” price increases due to NEM solar growth of less than 0.5 cents/kWh in 40 states, “but as high as 2 cents/kWh,” which is “consistent with some estimates for California.”
“Future impacts may differ” if NEM solar growth “is accompanied by, for example, rapid underlying load growth, co-adoption of storage, and advancements in rate design,” the analysis noted.
The study indicates a need, researchers said, for “better understanding of diverse NEM solar impacts across states and timeframes; and optimal designs of programs that minimize price increases and maximize societal cost reductions and benefits.”
State renewables standards
Renewable portfolio standard (RPS) programs in 29 states and the District of Columbia are intended to require more renewable energy than the competitive market would otherwise supply, with a goal of societal benefits, the analysis explains.
Many state RPS programs have increased retail electricity prices, “as expected given the intent of those policies,” the analysis says.
Available data showed the average increase in RPS compliance costs in the last five years of about 0.25 cents/kWh, ranging up to 1 cent/kWh. In three states the RPS compliance cost was lower.
RPS compliance cost data vary across states, the analysis says, and “may not account for the full suite of cost impacts, such as added integration costs or wholesale electricity price reductions.”
Case studies
The PDF presentation includes brief case studies of California, Maine, North Dakota, Florida, Virginia, and the PJM grid region.
Other factors
Of the other “drivers” of state-level retail electricity price changes that were considered, the study found that wildfires, storms, and natural gas exposure had the greatest effects.
Recovery and mitigation for extreme weather and wildfires had the largest maximum effect, reaching “as much as” 4 cents/kWh in California.
Natural gas price volatility caused “as much as over 2 cents/kWh” in price increases through 2022-2023, with a subsequent decrease.
State-level load growth “has tended to depress” retail electricity prices, by spreading fixed costs over greater load.
Replacement and hardening of aging distribution and transmission infrastructure increased retail rates “likely under 0.5 cents/kWh in the majority of states,” the analysis found.
The researchers provided links to several other resources, including a peer-reviewed article published in The Electricity Journal, a more concise PDF presentation, and a data visualization tool.
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