“The positive impacts probably exceed the negative impacts, but the overall magnitude is likely less than 0.4 cents per kWh.
What does this mean for California’s rooftop solar mandate? Like most energy economists including my colleagues Severin Borenstein and Jim Bushnell, I’m disappointed and perplexed by the policy. We know that residential rooftop solar is much more expensive than grid-scale renewables. At least 4 times more expensive, according to Lazard estimates.
Distribution system impacts don’t begin to close the gap. The Lazard estimate for the levelized cost of residential rooftop solar (midpoint) is 25.3 cents per kWh. If the distribution system benefits are 0.4 cents, this still leaves 24.9 cents per kWh. Compare this to 5.0 cents per kWh (or less) for grid-scale solar, and 3.0 to 6.0 cents for wind. It is not even close. The distribution system benefits are way too small to be used as an argument to prefer rooftop solar over grid-scale renewables.”
Click here to read more from Energy Institute at HAAS.