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.
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).
The paper is location-specific and draws on historical electricity prices to find how much money rooftop generation saved utilities. In California, there are three major utilities: Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and San Diego Gas and Electric (SDG&E). These utilities buy electricity through CAISO, or the California Independent System Operator, which aggregates wholesale prices from a diverse array of energy companies that run fossil fuel-burning generators and also manage solar, wind, and hydro plants.
Read full story here: Rooftop Solar Could Save Utilities $100 To $120 Per Installed Kilowatt | Ars Technica
