This paper presents a methodology for estimating the net marginal societal value of distributed residential PV systems within the Australian National Electricity Market. It includes PV's potential direct marginal energy value including avoided losses, and marginal environmental value with respect to regional air pollutants and greenhouse gas emissions. This methodology is then applied for the example of 61 domestic rooftop PV systems located in Sydney. Results highlight that residential PV systems would seem to offer net societal benefits under reasonable assumptions of their energy and environmental values including the social cost of carbon, and given social discount rates. Much depends, however, on the assumed level of the social cost of carbon (SCC) and the system performance including issues of orientation, maintenance and shading. While such evaluations of societal value are challenging, they have an important policy role in better aligning private incentives for and against residential PV deployment with the societal benefits that such deployment can bring. (C) 2013 Elsevier Ltd. All rights reserved.