Are Your Solar Panels to Blame for D.C.’s High Electricity Bills?

Consider two not-so-hypothetical D.C. homes right next to each other.

One has solar panels on the roof. With 15 hours of sunlight on some summer days, the homeowners could be paying next to nothing every month for electricity — even as they run their air-conditioner frequently because of the heat.

Their neighbors, though, don’t have solar panels. Their monthly Pepco bill bites hard, especially since electricity prices have jumped 23% in D.C. over the last year — more than anywhere else in the country.

These two homes — and their respective electricity bills — are more closely connected than one might initially think. In fact, some in D.C. — including Mayor Muriel Bowser and Emile Thompson, chair of the D.C. Public Service Commission, which regulates utilities like Pepco — now say that residential solar panels are in part to blame for the rising electricity bills hitting everyone in the city.

The reasons they cite include D.C.’s ambitious goals to move toward renewable energy along with solar incentives that are vastly more lucrative than almost anywhere else in the country — creating rising costs that Pepco passes right back to ratepayers in the city.

“What D.C. has done is create a system that is a huge privilege to a small percentage of people in the city that have their own [solar] rooftop system,” says Greg Jaczko, a former federal nuclear regulator who now runs his own clean energy consultancy.

Sign up for our Metro Newsletter for essential coverage of the D.C. region.

Bowser has been considering changes to how D.C. rewards homeowners who install solar panels, potentially taking a whack at the generous credits that solar adopters get. “This is a way we can deliver relief to residents almost immediately,” Jenny Reed, Bowser’s budget director, told the D.C. Council earlier this month.

But proponents of solar power say any such move is merely distracting from broader issues with how Pepco operates in D.C., essentially scapegoating a renewable source of electricity that helps much more than it hurts. They also say that changes like the ones Bowser and Thompson have hinted at could decimate the homegrown industry that sells and installs solar systems to thousands of D.C. homeowners — hiring residents and paying taxes in the process.

“One of the concerns is you’re going to disincentivize a solar industry that has been very successful in getting more and more homes on solar and doing it in a way that’s fairly equitable,” says Ward 6 Council member Charles Allen, who chairs the transportation and environment committee. “That’s a risk you run.”

Prices and politics

D.C.’s rising electricity bills have become a potent political issue.

They factored heavily into Ward 4 Council member Janeese Lewis George’s successful campaign for the Democratic nomination for mayor, and have spurred lawmakers to introduce a number of bills to address the situation.

High electricity prices were a point of discussion during the District’s Democratic mayoral primary, which was won by Janeese Lewis George. Kainaz Amaria/NOTUS

But the reasons for the city’s growing electricity bills — from 2022 to 2025, they have jumped 56% — and the possible ways to bring them down are complex.

City officials say regional data center electricity demand is partly to blame, but so are the decreasing number of power plants that provide the electricity; the regional grid operator that sells it to Pepco; the infrastructure to get that electricity into and around the city; the rate increases that the PSC has granted Pepco; and local taxes and initiatives that are added to every monthly bill.

Although Bowser recently unveiled an “Energy Affordability Action Plan” with seven possible solutions, since earlier this year she has focused more heavily on what she says the city could address most quickly: local initiatives around renewable energy sources, primarily solar.

“I’m not saying [solar’s] not a laudable goal, but it has a cost. And we can’t ignore the cost,” she said during a news conference in April.

Her main focus has been on D.C.’s Renewable Portfolio Standard — which is, essentially, the target for the city’s sourcing of renewable energy. Under current law, 100% of the city’s electricity will have to come from renewable energy sources by 2032. On top of that, a bill the Council passed in 2022 requires that 15% of the electricity must come from local solar by 2041. (This is known as the solar carveout; before that bill passed, it was set at 10%.) Currently, roughly 4% of D.C.’s electricity is served by solar panels in the city.

To achieve these goals, Pepco and third-party electricity suppliers have to purchase renewable energy from the regional grid or within D.C. They often do this by buying Renewable Energy Credits. In the case of solar power, they purchase Solar Renewable Energy Credits (SRECs) — each representing 1,000 kilowatt hours of electricity generated — from homeowners and businesses that have solar panels.

Within D.C., many homeowners who have their own solar panels can sell their SRECs to Pepco — and what they can earn for those credits is higher than anywhere else in the Mid-Atlantic region. Currently, each SREC in D.C. sells for $375; in Maryland those same credits would get less than $50, while in Virginia it’s just over $20.

According to a 2026 RPS report published by the Public Service Commission, the cumulative cost of buying renewable energy credits in D.C. has jumped in recent years, from $65 million in 2020 to $272.5 million last year. And since Pepco is often the buyer, it passes those costs back to ratepayers across the city — costs that show up on monthly electricity bills. Bowser’s office says that while RPS compliance costs amounted to 10% of a ratepayer’s bill in 2022, it was 15% last year — and will rise to 17% by 2035.

“It’s a massive cash giveaway to people who can afford these systems,” says Jaczko, who notes that homeowners with solar panels can often make $3,000 to $4,000 a year selling their SRECs to Pepco.

The possibility of SREC prices pushing up electricity bills for all ratepayers was a concern raised even by environmentalists and solar advocates in 2022, when the Council passed the bill increasing the solar carveout. (Lewis George was the only vote against it.) And the impacts of those higher bills would be felt more by D.C.’s Black and low-income residents, according to an analysis conducted by the Council’s Office of Racial Equity.

“Black, Indigenous, and Latinx households are more likely to be renters and are overrepresented in low and moderate income groups,” it said, “so they proportionally pay the most for D.C.’s solar policies — yet benefit the least from them.”

Solar panels and scapegoating

Advocates of solar power, though, say the arguments around SRECs and rising electricity bills only considers the costs to residents, and not the broader benefits to the city.

“The solar program in D.C. is lucrative, but in exchange we have to and have delivered on a number of benefits to the city,” said Zach Axelrod, CEO of Redball Energy, which was founded in D.C. and installs residential solar systems across the city. “There’s job creation, and there’s social equity. By virtue of SRECs being rather lucrative, the D.C. solar industry has built up in a much more equitable way than anywhere else in America.”

Axelrod says that D.C.’s high SREC values allow companies like his to install residential solar systems at no cost to a homeowner, taking as payment the right to then sell the solar credits those systems produce.

The numbers and locations of the solar systems in D.C. seem to bear out the success of the model. Of the roughly 20,000 systems across D.C., data from the PSC shows that the highest penetration has been in wards 4, 5, 7 and 8 — traditionally the areas of the city with the highest proportion of Black and low-income residents.

“We’re creating a much more equitable system where lower-income households are getting solar when they otherwise wouldn’t, and they’re lowering their utility bills down to zero in many cases,” says Allen, the Ward 6 Council member.

Matthias Paustian with the D.C. chapter of the Sierra Club says that more homes on solar additionally minimizes local demand for electricity at peak times — like during a heatwave — and thus puts less strain on Pepco’s electricity distribution infrastructure in the city.

“If you don’t have solar, in many areas you’re going to run into insufficient local distribution infrastructure, and Pepco would say, ‘With all this demand we have to upgrade this substation,’” he says. “We’re talking about a lot of money. Solar produces exactly at the time that these substations hit peak demand.”

Solar advocates also say that because D.C. is a fully urbanized jurisdiction, incentives for solar simply have to be more generous than in places where solar developers can cheaply build out an entire solar farm on otherwise empty land. And Allen adds that D.C. decreasing its own incentives could harm the industry and lead to fewer people opting to install systems on their homes.

A path forward?

Speaking to D.C. lawmakers earlier this month, Thompson, the embattled chair of the Public Service Commission, acknowledged that the rising electricity bills had become a “political firestorm.” But he also argued that politics alone wouldn’t help bring them down.

“Utility ratemaking is not simply a political matter. It is a complex matter of economics, engineering and accounting,” he said.

In an interview with NOTUS, Thompson said he hasn’t yet settled on a way to balance the city’s solar goals with the downstream effects on electricity bills. But he notes that New Jersey and Maryland had both tackled their own SREC-related challenges in recent years.

“I don’t think this is a blame game or a deflecting game,” he says. “This is, ‘Costs are high across the board and we need to be looking at everything.’”

Bowser hasn’t yet formally proposed any possible changes to the Council, but senior aides told lawmakers last week that bringing down SREC prices is under consideration. City Administrator Kevin Donahue emphasized that it wouldn’t mean D.C. was walking away from solar, and that the city actually wants to make it faster to connect solar systems to the grid.

But Allen cautions that bringing down the value of credits would have to be done thoughtfully.

“We have a lot of people who made economic decisions based on a certain set of assumptions in law,” he said. “Is it fair to say, ‘I’m going to pull the rug out from underneath you?’”