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#DoTheMath: How Rooftop Solar Will Save Us Billions

Wednesday, Mar 23 2016

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By
Sean Gallagher
The U.S. solar energy market will double this year, but what you may not know is that reaching this mega-milestone has monetary benefits for us all.  
 
The obvious cost savings of the tremendous rise in solar, particularly the proliferation of rooftop solar panels, is that it puts system owners in control of their energy needs and wrangles in their energy bills. Alone, the economic incentive for consumer-sited solar is strong, but what may be less evident is the impact solar adoption has for us all.  
 
When savvy consumers install a solar system for their home or place of business, or buy into a community solar garden, they are increasing the supply of clean electricity generation and reducing the demand for dirty electricity generation.  
 
Since solar is becoming more accessible, more people are harnessing the sun and distributed generation (DG) is becoming more commonplace. So much so, grid managers who power the eastern portion of the country are planning to cut the amount of energy and capacity that they buy from traditional electricity generators, according to new analysis from ICF International, Inc.  
 
By 2019, the New England (ISO-New England), New York (NYISO) and the PJM Interconnection electric power markets will cut about 1,400 megawatts (MW) from wholesale electricity generators, which will  save them – and save customers in those states – a whopping $2 billion each year.  
 

When we do the math, the increase in electricity supply provided by distributed solar generation and its associated reduction in demand trickles down to all ratepayers, in at least two ways.  First, grid operators buy less power, reducing their costs.  Second, reduced net demand leads to a reduction in wholesale market prices, further reducing grid operators' costs.  Both streams of reduced costs are passed through to local utilities, which then result in reduced retail prices for ratepayers.

Remember this the next time your local utility tells you that your neighbor with solar is “shifting costs” onto the system. The fact is that the system is transforming, and that is good for us all.   

Like most good things, rooftop solar has both costs and benefits. But when the math is done correctly, the benefits to the entire electric system far outweighs the costs.  
 
Solar is driving America to a cleaner, more reliable and 21st century energy future. That’s good news for our environment and our wallets.