Are electric rates increasing? According to the data, electricity prices from PG&E, SCE, and SDG&E have steadily risen for the last half decade. The rate of increase is double that of the Consumer Price Index of Wage Earners (CPI-W). (FRED) In fact the increase in rates is higher than most loans.
Sherry Listgarten from PleasontonWeekly.com compiled an exceptional article discussing how electricity prices in California are rising at astronomical rates. Electricity rates are increasing rapidly, making it too expensive to keep purchasing electricity from power companies.
Source: Jennifer Dowdell of TURN (The Utility Reform Network) at the California Public Utilities Commission (CPUC), 2022
Sherry’s article also discusses the projections for electricity prices in the future. Continuing to outpace the consumer price index. Do I think electricity rates are going to go down? No. If anything, electricity prices are going to continue to rise. As the transition from Net Energy Meetering (NEM) 2.0 to NEM 3.0 happened on April 15. This is a fairly drastic change for residential customers taking the average payback of solar installations going from 7 years, to about 8 1/2 years. With every new edition of NEM, it has made alternate energy sources, particularly solar more expensive for the consumer. It now takes more solar power generation to offset the lower time of use rates.
What do electricity rates have to do with solar? Consider this, our average customer spends $700-$1200 a month for their electric bill. Thats at current rates throughout July. Over the next 4-5 years, your lowest monthly bill is expected to increase to around $1,000. This amount is 35%-45% higher than the current number.
However, what solar does provide is the consumer with a predictable monthly solar loan payment. Solar loan payments vary from $250-$400 based on system size and loan term duration.
Assume that you have that for 20 years. You now have 20 years of consistent payments. This is best for retired people, those with fixed income, or those who like knowing their monthly payments in advance.
If you are interested in having solar installed, or added on to your already existing system to offset your bills. Give us a call, email, or use the contact form.
Author: William Zink
(1) FRED CPI Index data series available at: https://fred.stlouisfed.org/series/CWUR0000SA0
(2) Jennifer Dowdell of TURN (The Utility Reform Network) at the California Public Utilities Commission (CPUC), 2022
(3) Sherry Listgarten of PleasontonWeekly.com; Is it true that electricity rates will be going down?; March 6, 2022; https://www.pleasantonweekly.com/blogs/p/2022/03/06/when-will-our-electricity-rates-go-down