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Working Paper | Retail Pricing to Support Cost-Effective Distributed Generation Investment

Frank Wolak

The retail price a household pays for the last unit of grid-supplied electricity consumed is an important driver of the decision to install a rooftop solar photovoltaic (PV) system. This price is the cost a household avoids by consuming a kilowatt-hour (KWh) from their rooftop solar system. Consequently, if the levelized cost of a KWh from a rooftop solar system is less than this retail price, the household saves money by installing a rooftop solar system.