THE ECONOMICS OF LOAD DEFECTION

The analysis finds that grid-connected solar-plus-battery systems will rapidly become cost-effective, potentially leading to significant load defection that could undermine utility revenues and create stranded assets. The report argues that the electricity system is at a 'fork in the road,' where current regulatory and pricing models will either lead to fragmented grid defection or an integrated grid where distributed energy resources (DERs) provide value back to the system.

• The economically optimal system configuration for customers evolves from grid-only in the near term, to grid-plus-solar, and eventually to grid-plus-solar-plus-batteries in the longer term.
• Grid-connected solar-plus-battery systems reach economic parity faster than off-grid systems, with new customers in three of the five studied geographies expected to find them most economic within 10–15 years.
• Over time, solar-plus-battery systems are projected to supply the majority of customer electricity, reducing the grid's role to backup only. In Westchester County, NY, the grid's contribution for commercial customers is projected to shrink from 100% today to approximately 25% by 2030 and less than 5% by 2050.
• Significant load defection could threaten the recovery of an estimated $2 trillion in grid investments required between 2010 and 2030, as current business models rely on volumetric energy sales for revenue.
• In the Northeast U.S., maximum possible annual kWh sales erosion by 2030 could reach approximately 58 million MWh (50%) for residential customers and 83 million MWh (60%) for commercial customers.
• Eliminating net energy metering (NEM) only delays significant load loss rather than preventing it, as grid-connected solar-plus-battery systems eventually cause near-total load loss regardless of NEM.
• The introduction of residential fixed charges is unlikely to stop the ultimate outcome of load defection, though it may delay the economics of adoption or encourage customers to jump directly to off-grid systems.
• Investing in solar-plus-battery systems can cap a customer's electricity costs at a 'peak price,' insulating them from future retail price increases. This peak price is estimated at $0.10–$0.30/kWh for commercial and $0.20–$0.35/kWh for residential customers.
• The report identifies a 'fork in the road' for the grid: one path leads to an 'Integrated Grid' where DERs are valued and coordinated, and the other leads to 'Grid Defection' characterized by stranded assets and an upward price spiral for remaining grid-dependent customers.
• To avoid the grid defection trajectory, the industry must evolve pricing to be locational, temporal, and attribute-based, while adopting new regulatory models that monetize the benefits of DERs.

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_2015-05_RMI-TheEconomicsOfLoadDefection-FullReport.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_2015-05_RMI-TheEconomicsOfLoadDefection-FullReport.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_2015-05_RMI-TheEconomicsOfLoadDefection-FullReport.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }