THE ECONOMICS OF LOAD DEFECTION

This executive summary by the Rocky Mountain Institute (RMI) and HOMER Energy analyzes the economic transition of residential and commercial customers from grid-only electricity to grid-connected solar-plus-battery systems. The report argues that while total grid defection is possible, the more likely scenario is a gradual shift where customers use the grid as a backup, potentially leading to significant revenue loss for utilities and stranded assets for central generation owners unless new regulatory and pricing models are adopted.

• The optimal electricity configuration for customers will evolve from grid-only to grid-plus-solar, and eventually to grid-plus-solar-plus-batteries. Solar-only systems are already economic in three of the five studied geographies and will be in all within ten years, while solar-plus-battery systems will be most economic in three geographies within 10–15 years.
• Over time, solar-plus-battery systems are expected to supply the majority of customer electricity, reducing the grid's role to backup only. In Westchester County, NY, the grid's contribution to commercial customer load is projected to drop from 100% today to approximately 25% by 2030 and less than 5% by 2050.
• Significant load defection could threaten the recovery of estimated $2 trillion in grid investments needed between 2010 and 2030. In the Northeast U.S. by 2030, potential annual residential kWh sales erosion could reach ~58 million MWh (50% of sales) and ~$15 billion in revenue, while commercial erosion could reach ~83 million MWh (60% of sales) and ~$19 billion in revenue.
• Policy measures such as eliminating net energy metering (NEM) or introducing fixed charges may delay but will not prevent significant load loss. Such measures might instead lead customers to eventually 'jump' directly to off-grid solar-plus-battery systems once a tipping point is reached.
• Adopting solar-plus-battery systems can cap a customer's electricity costs at a 'peak price' regardless of rising retail grid prices. This peak per-kWh price is estimated to stabilize between $0.10–$0.30 for commercial customers and $0.20–$0.35 for residential customers across the studied geographies.
• The transition creates divergent impacts for stakeholders: distribution grid operators may benefit from upgrade deferrals and congestion relief, while owners of central generation and transmission face a high risk of stranded assets as sales decline and peak price spikes are reduced.

APA

Bronski, P., Creyts, J., Crowdis, M., Doig, S., Glassmire, J., Guccione, L., Lilienthal, P., Mandel, J., Rader, B., Seif, D., Tocco, H., & Touati, H. (2015). THE ECONOMICS OF LOAD DEFECTION. RMI. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-06_RMI-TheEconomicsOfLoadDefection-ExecSummary.pdf

Chicago

Bronski, Peter, Jon Creyts, Mark Crowdis, Stephen Doig, John Glassmire, Leia Guccione, Peter Lilienthal, et al. THE ECONOMICS OF LOAD DEFECTION. RMI, 2015. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-06_RMI-TheEconomicsOfLoadDefection-ExecSummary.pdf.

Wikipedia

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BibTeX

@techreport{bronski2015economics, author = {Bronski, Peter and Creyts, Jon and Crowdis, Mark and Doig, Stephen and Glassmire, John and Guccione, Leia and Lilienthal, Peter and Mandel, James and Rader, Bodhi and Seif, Dan and Tocco, Helen and Touati, Hervé}, title = {{THE ECONOMICS OF LOAD DEFECTION}}, institution = {RMI}, year = {2015}, month = apr, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_2015-06_RMI-TheEconomicsOfLoadDefection-ExecSummary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }