If you pay an electric bill, you’ve noticed. Energy prices nationwide have been rising at roughly twice the rate of inflation, and household electricity prices in many states have outpaced inflation over the past 25 years. Families feel it. Small businesses feel it.
So it’s natural that people want to know why. One explanation that has gained a lot of traction is that renewable energy, particularly utility-scale wind and solar, is driving prices up. That belief has contributed to the rollback of incentives and policies that helped renewables account for more than 80 percent of new generating capacity added in the United States in 2024.
It’s a fair question to ask. Now we have a rigorous answer.
Researchers at the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research set out to untangle a simple problem: electricity prices have gone up during the same years renewables have grown. But happening at the same time is not the same as one causing the other.
Fischer Argosino, a graduate researcher at the center, and Professor Christopher Knittel, who directs the center and is the George P. Shultz Professor of Energy Economics at MIT, built a dataset of utility information from 1998 through 2023, drawing on the Energy Information Administration, the Federal Energy Regulatory Commission, and Lawrence Berkeley National Laboratory. They used a statistical approach that controls for differences between states and for changes affecting the whole country in a given year. In plain terms, it is designed to isolate what renewables themselves do to prices from everything else going on.
Here’s what they found. State renewable portfolio standards, which require utilities to get a share of their power from renewable sources, had virtually no effect on residential electricity prices.
Utility-scale renewables were associated with modestly lower prices.
Utility-scale solar stood out. It was strongly linked to lower residential electricity prices.
The researchers offer an explanation: large solar plants need no fuel, which can put downward pressure on generation costs, and they may help reduce congestion on the grid. When the team tested that by looking at what utilities actually spend, utility-scale solar was strongly associated with lower transmission costs, lower distribution costs, and lower total operations and maintenance costs. Those savings may be passed through to customers as lower retail prices.
The study draws one important line. Rooftop solar showed a significant link to higher prices. The researchers point to rate structures in some states that shift costs from rooftop solar owners onto other customers, and to added costs on local distribution systems that were not designed for power flowing in both directions.
That is largely a question of rate design and grid planning, and the authors say so. It also underscores why the large, efficiently integrated, utility-scale projects our members build matter for affordability.
The authors note that utilities are investing heavily in grid upgrades to handle extreme weather such as heat waves and wildfires, along with record new demand from large loads and industrial growth. Those are real pressures on every customer’s bill, and they deserve a serious, fact-based conversation.
The authors are careful economists. They describe their results as plausibly causal, acknowledge that other factors may remain, and are continuing to test their findings with additional methods. But they conclude that the evidence is robust: neither renewable portfolio standards nor utility-scale wind and solar are responsible for rising residential electricity prices.
Meeting the demands on today’s grid will take every resource we have. This study makes clear that utility-scale solar is part of keeping power affordable. In the authors’ view, the path forward is to integrate low-cost renewables well and recover grid costs fairly. That’s a goal everyone who cares about electric bills can share.
You can read the full MIT working paper here: MIT CEEPR Working Paper 2025-22
Jeff Clark is President and Chief Executive Officer of the Advanced Power Alliance.