Rooftop solar could save utilities $100 to $120 per installed kilowatt

(credit: Lawrence Berkeley Labs)

When you install rooftop solar panels, the electricity you create cuts into the amount of electricity the utility must provide to meet your needs. Add up the reduced demand of all the homes with solar panels, and you've got a pretty sizable amount of electricity that's no longer needed.

Researchers from Carnegie Mellon and the National Renewable Energy Laboratory (NREL) quantified that reduced demand and found that solar panels installed between 2013 and 2015 in California saved utilities from having to purchase between $650 million and $730 million dollars' worth of electricity. Those avoided purchases create slack in demand, pushing wholesale prices lower.

Lower wholesale prices "should ultimately reduce consumers' costs through lower retail rates," the researchers write (although whether and how those savings get passed on to retail customers is not discussed in the paper).

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