Assessing the Value of Distributed Solar Energy Generation

Solar energy has recently become the subject of heated policy debate across the United States, particularly at the state level. Proponents note that it provides a variety of environmental, public health, and economic development benefits for society and argue that it can help support electric grid operations. Many electric utilities, however, contend that the growth of customer-owned, distributed solar energy systems will create costs that the utilities must pass on to ratepayers. This debate has led to a wide range of technical reports seeking to quantify the costs and benefits of solar energy to electric utilities, ratepayers, and society at large. We review these studies, discuss the different perspectives that they represent, and identify the key variables that have shaped this value-of-solar debate. We conclude by discussing future research opportunities that could help to maximize the benefits of solar energy use while minimizing its potential negative impacts.