Electricity prices

Small-scale solar power, also known as rooftop or distributed solar, has grown considerably in the U.S. over the past decade. It provides electricity without emitting air pollutants or climate-warming greenhouse gases, and it meets local energy demand without requiring costly investments in transmission and distribution systems. However, its expansion is making it harder for electric utilities and power grid managers to design fair and efficient retail electricity rates – the prices that households pay. Under traditional electricity pricing, customers pay one charge per kilowatt-hour of electricity consumption that covers both the energy they use and the fixed costs of maintaining the grid. As more people adopt rooftop solar, they buy less energy from the grid. Fewer customers are left to shoulder utilities’ fixed costs, potentially making power more expensive for everyone. This trend can drive more customers to leave the system and raise prices further – a...

Americans want their electricity to be cheap, clean and reliable, but that trifecta is becoming more elusive, thanks to climate change. According to a 2021 report by the nonprofit research organization Climate Central, more than 80% of reported major outages across the U.S. from 2000 through 2021 were caused by weather extremes, such as heat waves, wildfires and tropical storms. We are an economist and an electrical engineer investigating how increased use of two-way smart meter technology can be used to reduce greenhouse gas emissions from the electricity sector and help the economy withstand climate-driven weather extremes. As we see it, adapting the power system to increasingly volatile weather will require a combination of user-friendly technologies and economic incentives. From January through September 2022, the U.S. experienced 15 weather and climate disaster events with losses exceeding $1 billion each. Some of these events caus...