THE ECONOMICS OF GRID DEFECTION

This executive summary analyzes the economic threat of 'grid defection' in the U.S., where solar-plus-battery systems allow customers to bypass utilities. The report finds that grid parity is already occurring in Hawaii and is imminent in California and New York, potentially stranding utility assets and rendering the traditional kWh-based cost recovery model obsolete.

• The combination of solar PV and battery storage allows customers to potentially bypass traditional utility services entirely, creating a "utility in a box" that can operate independently of the grid. This represents a more significant challenge to utilities than solar PV alone or energy efficiency, as it enables customers to "cut the cord to their utility entirely."
• Grid parity for solar-plus-battery systems is already present for some customers, specifically in Hawaii, and is expected for tens of millions of others in regions like California and New York by 2030, and potentially as early as 2020. The analysis indicates that commercial customers generally reach this parity sooner than residential customers.
• The arrival of grid parity is expected to occur within the 30-year economic lifespan of existing utility power plants and transmission infrastructure, which could lead to the stranding of these assets. This threatens the traditional utility business model based on kWh sales, potentially triggering a "utility death spiral" where falling sales lead to rising electricity prices, further incentivizing defection.
• In the U.S. Southwest (including AZ, CA, CO, NM, NV, and UT), a conservative base case suggests solar-plus-battery systems will undercut utility retail prices for the most expensive 20% of load by 2024. Under more aggressive assumptions, off-grid systems could be cheaper than all utility-sold electricity in that region within a decade of the report's timeframe.

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} }