Grid Value and Cost of Utility-Scale Wind and Solar: Potential Implications for Consumer Electricity Bills

Wind and solar cost declines and wholesale power price fluctuations have once again brought the “hedge value” of renewable energy to front of mind. Meanwhile, recent research has found that cost savings are the most persuasive driver of broad support for renewable energy. Yet whether consumers directly benefit from the price hedge that wind and solar can provide depends on various factors, most notably the contractual and market structures under which these generators operate. Drawing upon a vast amount of plant-level empirical data, we quantify the net market value (“net value”) of wind and solar over time and explore various factors that determine the extent to which consumers can capture and benefit from that value. The focus is on elements that may directly impact consumer electricity bills. 

A brief overview of this study can be found here.