[bumby]

>1. If a large number of people are off-grid or effectively off-grid then the cost of consumer will have to decrease until it's comparable with the total cost (capital and maintenance) of private solar and battery.

I don't think this is how it works. As the OP said, costs is costs. If a fossil fuel fired plant cost $X to build and run, you can't just hand-wave those costs away in the vein of competition. The costs will be passed on to the consumer.

Those privileged enough to have the option to build solar/battery can extract themselves from that market, but there will still be some left on the grid who will have to bear that cost. For example, renters and those too poor to afford the costs of solar will likely be stuck paying increased costs as the consumer base shrinks.