Letting neighbors trade solar power can actually make the local grid more likely to crash in the summer.
March 19, 2026
Original Paper
Who Pays for Community Energy? Peer-to-Peer Trading, Distribution Grid Headroom and the Supplier's Dilemma
SSRN · 6387539
The Takeaway
Peer-to-peer energy trading is usually seen as a way to increase grid flexibility, but it can backfire by synchronizing behavior. When neighbors all try to export their excess solar power at the same time to chase high prices, they create concentrated 'export spikes' that can overwhelm local transformers and erode grid safety margins.
From the abstract
Renewable Energy Communities (RECs) with peer-to-peer (P2P) trading can lower bills and unlock flexibility, but they also reshape supplier revenue and distribution-network headroom. We couple an agent-based REC market model to a Transformer Headroom Index (THI) to evaluate welfare and grid outcomes across seasons. A 20-household feeder in South-East England with PVs, EVs, and heat pumps is simulated with and without P2P under four retail tariffs: Flat, Economy-7, Agile, and a wholesale-linked Dy