New research shows rooftop solar and electric vehicles can shift electricity costs in opposite directions
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As rooftop solar panels and electric vehicles become more common across the United States, they are widely celebrated for helping reduce greenhouse gas emissions. But new research from the University of Maryland suggests these technologies also have broader, and often overlooked, effects on electricity prices that reach far beyond the households that adopt them.
A new working paper coauthored by Joshua Linn, professor in the Department of Agricultural and Resource Economics and senior fellow at Resources for the Future, and graduate student Zeyang Dong examines how residential clean-energy technologies affect average electricity prices and the welfare of households that do not adopt them.
Their study found that rooftop solar panels, which allow households to generate their own electricity, reduce the amount of power purchased from utilities. Over roughly three years, this leads to higher average electricity prices because fixed costs are spread over fewer kilowatt-hours. Electric vehicles, by contrast, increase electricity demand, resulting in lower average prices over the short term.
The implications are especially important for households that do not adopt these technologies, a group that still represents roughly 90 to 95 percent of U.S. households. Using household survey data, the researchers find that higher electricity prices associated with rooftop solar adoption disproportionately harm low-income non-adopting households, which spend a larger share of their income on electricity. In contrast, lower electricity prices associated with electric vehicle adoption disproportionately benefit low-income non-adopters.
These findings complicate common narratives about the equity impacts of clean-energy subsidies. While rooftop solar and EV incentives are often criticized as favoring higher-income households, the study shows that electricity price changes can either exacerbate or offset those distributional concerns, depending on whether the technology decreases or increases electricity demand.
Importantly, the authors emphasize that their analysis focuses on short-run effects, before utilities can fully adjust infrastructure and rate structures. The research does not argue against clean-energy adoption, nor does it weigh electricity price effects against environmental benefits. Instead, it provides policymakers with clearer evidence about indirect impacts that are often excluded from policy evaluations.
For Linn, the work reflects AREC’s broader mission to bring economic rigor to complex environmental and energy challenges. As states revisit net-metering rules, EV incentives, and electricity rate design, understanding how clean-energy adoption affects the entire system, not just adopters, will be critical to designing policies that are both effective and equitable.
Theworking paper, "How Do Residential Greenhouse Gas Mitigation Technologies Affect Electricity Prices and Consumer Welfare?” is currently under review and contributes to a growing national conversation about how to manage the clean energy transition in ways that work for all households.
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Collaborators on this study include researchers from Princeton University and the University of Maryland School of Public Policy.
Want to learn more? This research also connects to ongoing national conversations about transportation and energy policy. On January 30, 2026, Linn and colleagues will convene the 2026 Transportation Engineering, Economics, and Policy Workshop, a free, one-day, hybrid event that brings together economists, engineers, and policymakers to explore emerging research on electric vehicles, transportation systems, and policy design. Registration is free and open to the public, learn more and get ticketshere.
