THE ECONOMICS OF GRID DEFECTION

The report examines the economic viability of 'grid defection'—where customers use solar PV and battery storage to operate independently of the electric grid. It analyzes five U.S. geographies to determine when the levelized cost of electricity (LCOE) for these systems undercuts retail utility prices. The findings suggest that grid parity is already present in Hawaii and is imminent for millions of other U.S. customers, threatening to strand utility assets and trigger a 'utility death spiral' of rising prices and falling sales.

• Grid parity for solar-plus-battery systems has already been achieved for some customer segments in Hawaii and is expected for tens of millions of other commercial and residential customers in regions like New York and California by 2030, and potentially as early as 2020.
• Commercial customers generally reach grid parity sooner than residential customers. The timeline for parity is further accelerated by aggressive technology cost declines or investments in demand-side improvements such as energy efficiency and load flexibility.
• The arrival of grid parity within the 30-year economic life of power plants and transmission infrastructure threatens to strand utility assets and render the traditional kWh-based cost recovery model obsolete.
• In the U.S. Southwest, a conservative base case indicates that by 2024, solar-plus-battery systems will undercut retail prices for the most expensive 20% of load served; under more aggressive scenarios, off-grid systems could be cheaper than all utility-sold electricity in the region within a decade of the report's analysis.
• Early adoption of solar-plus-battery systems, driven by desires for reliability and low-carbon energy, can trigger a 'utility death spiral' where falling sales lead to upward pressure on electricity rates, further incentivizing grid defection.

APA

RMI (n.d.). THE ECONOMICS OF GRID DEFECTION. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMI_GridDefection-4pager_2014-06.pdf

Chicago

RMI. THE ECONOMICS OF GRID DEFECTION. n.d. https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMI_GridDefection-4pager_2014-06.pdf.

Wikipedia

{{cite report |author=RMI |title=THE ECONOMICS OF GRID DEFECTION |url=https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMI_GridDefection-4pager_2014-06.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmindeconomics, author = {{RMI}}, title = {{THE ECONOMICS OF GRID DEFECTION}}, institution = {RMI}, url = {https://rmi.org/app/uploads/2017/05/RMI_Document_Repository_Public-Reprts_RMI_GridDefection-4pager_2014-06.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }