Ratemaking for the mid-transition: an example of the social construction of electric system prices from community shared solar

Abstract Electric utility rates are usually presented to consumers as reflecting costs or market efficiency. But we argue that utility rates and prices are more than they seem: they are socially constructed, formed from deeply held institutional logics. Working with 104 community shared solar (CSS) subscription contracts across 33 utility programs in Minnesota, we examine the rhetoric over cross-subsidy and ‘paying a fair share,’ showing the construction of utility costs, benefits, and values of these programs. We develop a financial model, apply archival research, and use ethnographic methods to analyze how these electricity system prices of CSS are constructed. We use a framework of embedded, short-run incremental, and long-run incremental institutional logics, demonstrating that if advocates and energy transition researchers are to take clean energy deployment, innovation, and equity seriously, they need more education, transparency, and communication around these logics and their effect on prices. We argue that with a better shared understanding of how electricity prices form, we can take responsibility for our imagined constraints and create electricity prices that can navigate the transition’s phase-in and phase-out activities toward collective, long-term benefit.