Solar Power Driving Down Prices for All Rate Payers

The Institute for Energy Economics and Financial Analysis points to a recent study of the California electrical system that demonstrates clearly that as solar power expands, the price of electricity falls.

The truth is this: Rooftop solar provides substantial benefits for everyone, regardless of who installs it. It helps power the homes and shops that adopt it, to be sure, but it has far-reaching benefits for other customers as well. If Jane Doe in Anywhere, USA, puts a solar panel on her roof, every other electricity ratepayer within the footprint of whatever regional grid Jane Doe is tied into will benefit as well.

Honest purveyors of utility-industry fact know this, of course, and say it quite often. So, more and more, does Wall Street. No less a titan than Sanford Burstein & Co., one of the perennially best-rated firms in Institutional Investor’s annual rankings of investment researchers, has studied the issue deeply over the past couple of years and comes away with an unequivocal take on the issue: Rooftop solar, aka photovoltaic solar, means lower peak-hour energy prices for all.

Bernstein lays out the supporting research in a reported published last month that found that the rapid increase in the amount of solar PV available on the electricity grid in California—a seven-fold expansion in only four years, from 0.7 gigawatts in 2010 to 4.8 GW in 2014— had helped reduce system loads so much that peak prices were put off until later in the day, when demand was lower. Lower demand means lower prices.

Load shifting to reduce peak prices is only one of the many ways in which the expansion of solar power helps everyone.

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