U.S. Residential Solar Economic Outlook 2016-2020: Grid Parity, Rate Design and Net Metering Risk

by Cory Honeyman

As installation costs continue to decline and retail electricity rates climb, residential solar economics have become increasingly attractive across the United States. 20 U.S. states are currently at grid parity, and 42 states are expected to reach that milestone by 2020 under business-as-usual conditions.

Residential solar reaches grid parity when the levelized cost of solar energy falls below gross electricity bill savings in the first year of a solar PV system’s life. While traditional grid parity analyses rely on average retail electricity rates to calculate customer savings, we used utility and state-specific rate design, system production and installation costs to more accurately gauge solar’s attractiveness.

States at Grid Parity in 2016

This slide-based report explores how rate design and net metering reform risk complicate the residential solar economic outlook in ways that can either strengthen or weaken the rooftop solar savings that can be attained by a customer. It details what might happen under several net metering reform scenarios, provides case studies, outlines key market drivers and includes in-depth forecasting out to 2020.

The premium version of this report also comes with the complete, underlying dataset in Excel.

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Cory Honeyman Associate Director, U.S. Solar

Cory Honeyman is the Associate Director of U.S. Solar at GTM Research and manages GTM’s U.S. solar market analyst team. He is responsible for strategy and development of GTM Research’s coverage of the downstream U.S. solar market, including all reports, products, and custom engagements on trends in policy, market design and project development.

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