If you pay a fixed price for the grid then your price per kWh goes down and it makes less sense to put solar panels on your roof because they need to beat the lower price per kWh unless you can get entirely off the grid.
But then you do have the incentive to get entirely off the grid if you can, because it gets you out of the grid attachment fee. So it justifies more in the way of batteries to avoid that cost.
In other words, it makes solar + grid attachment unprofitable, so your viable options become full grid or full independence. Then depending on which one has lower costs at scale, it either ends rooftop solar or ends the power grid.
And that could go either way. The power grid has economies of scale, but it also has transmission costs that don't exist for local generation, so which one wins?
It's residential users who usually don't have a split bill like that.
Doesn’t this contradict the oft repeated news that solar is so much cheaper than our predominantly oil generated power?
Even if the wholesale cost of energy drops to $0, you are only dropping about 10% of the total cost of energy.
Of course, this brings up another interesting question that has been a hot button issue; if power companies are supplying less and less power (since more and more people are getting their own power from solar), the economic model of paying for power infrastructure by paying a premium for kw/hours isn't going to work. The infrastructure cost is fixed, even if everyone is generating their own power (assuming people still want to be connected to the grid, and even people with solar generally want that). How do we pay for that infrastructure?
Power companies have tried to introduce surcharges for solar users, but that has gotten a lot of pushback because it seems to be punishing people doing the right thing. However, the alternative is to push more of the cost onto non-solar users, which doesn't seem fair either, especially since solar users still get the benefits of the grid.
It is not an easy question to answer.