THE ECONOMICS OF LOAD DEFECTION

The analysis finds that grid-connected solar-plus-battery systems will become the lowest-cost option for many customers within 10-15 years, potentially causing massive revenue losses for utilities. In the Northeast U.S. alone, potential residential and commercial kWh sales erosion by 2030 could reach 58 million MWh and 83 million MWh respectively. The report argues that eliminating net metering or adding fixed charges only delays this outcome. To avoid a future of stranded assets and high costs for non-adopters, the authors advocate for an 'integrated grid' featuring locational and temporal pricing, performance-based regulation, and the monetization of distributed energy resource (DER) values.

• The optimal electricity configuration for customers will transition 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 solar-plus-battery configurations are expected to be the most economic for new customers 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 threatens the recovery of an estimated $2 trillion in grid investments needed between 2010 and 2030. In the Northeast U.S. by 2030, potential annual kWh sales erosion could reach ~58 million MWh (50% of sales) and ~$15 billion in revenue for residential customers, and ~83 million MWh (60% of sales) and ~$19 billion in revenue for commercial customers.
• Policy measures such as eliminating net energy metering (NEM) or implementing fixed charges are unlikely to prevent long-term load defection; they may only delay the process or push customers toward complete off-grid defection once a tipping point is reached.
• Adopting solar-plus-battery systems can cap a customer's electricity costs at a 'peak price' regardless of future retail rate increases. This peak per-kWh price is estimated at $0.10–$0.30 for commercial customers and $0.20–$0.35 for residential customers across the studied geographies.
• The transition creates a risk of stranded assets for owners of central generation and transmission, as solar-plus-battery systems reduce sales and encroach on ancillary services markets. Conversely, distribution grid operators could benefit from DERs through congestion relief and upgrade deferrals if new business models are adopted.

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} }