Understanding California’s utility rate increases, and how to avoid them.

The unknown can be exciting, leading to adventure and discovery. Or, in the case of energy bills, annoying. Nobody wants to have a surprisingly large bill come through, which is exactly what can happen when relying on older, traditional means of powering your home. Combine this with an unreliable service giving you unexpected, or even planned, power outages, and that unknown can be downright infuriating.

Unfortunately, we’re not talking in generalities here, as you may be aware. These are concrete, yet avoidable, issues facing many people right now.

PG&E announced a rate hike for all customers in California

If you're a PG&E customer, your rates will rise by about 4% starting in March of 2021. A rate hike won’t be shocking for PG&E customers, as small price increases have become somewhat common. But over time, even spikes in price by a small percentage adds up.

As the gap between your utility and solar energy rates widen, you save even more. Here’s what total annual savings could have looked like for many PG&E customers if they’d gone solar in 2016. (Note: This assumes solar production of 8,450 kWh in 2016 with 0.5% annual degradation. Average solar rate is assumed to be $0.185/kWh and escalate annually at 2.9%.)

And who wants to sacrifice even an extra 4% on their bill for something you’ve already been paying for? Because, unfortunately, the rate hike doesn’t come with any announcement of upgraded features or declining blackouts and brownouts.

But it’s not all bad news. We’re focused on solutions—and solar energy has the capability of being just that.

When we talk about the sustainability of solar, we’re not only talking about the environment. Going solar is a good investment now but it just keeps getting better. (Note: This assumes solar production of 8,450 kWh in year 1 with 0.5% annual degradation. Average solar rate is assumed to be $0.185/kWh and escalate annually at 2.9%. Current avoided costs of power is 0.28/kWh. Utility escalator of 4% annually.

Lock into a fixed rate

You don’t have to rely on the grid for all your power. Solar energy actually puts power back in your hands, letting you generate your own source of energy for your own home. An added bonus to this that you may not be aware of is that it can actually lock you into a specific rate. This means you won’t have to worry about a surprise rate hike for your solar power too.

The details can vary depending on the type of solar agreement you decide to choose, but at a high level it means you’ll be paying the same price every month, regardless of usage, for the entire term length. That’s power you can rely on, with rate options you can afford.

So what happens if your solar panels generate more power than you use? That’s the beauty of Net Energy Metering, or NEM.

What is net energy metering?

To start, let’s look at how a traditional home energy system works. It operates off a grid controlled by a company in your area, like PG&E. When you need to use electricity, your house pulls it from said grid. There are many sources various energy providers use to generate this energy. Some may be renewable, but in many instances it comes from oil, coal, natural gas, or nuclear sources.

Net energy metering is a way of flipping the script on that. When you have solar, you’re generating your own electricity and using that to power your home. And, if you generate more than you use, you can send the excess to the grid without having to lift a finger. Depending on your utility provider, you’ll get a credit for the energy you send to the grid (PG&E does have a net energy metering program) so it can also offset some of your traditional energy costs.

The amount you get paid fluctuates depending on where you live and when you install solar, but as a general rule of thumb it pays off to be an early adopter. Utilities offer NEM because it helps relieve the burden on an increasingly outdated grid infrastructure. The more people there are in your area that are self-reliant with energy, the less strain on the grid. Thus, less of an incentive for the company (in this case PG&E) to pay a higher rate to use the clean energy your system sends to them. Oftentimes the earlier you lock in the rate, the higher it will be.

Each year, the cost of power increases to your utility. This means you get charged more. With solar, your rate increases more predictably and gradually. This estimate would mean a cumulative savings of around $1,400 over just the last five years. (Note: This assumes solar production of 8,450 kWh in 2016 with 0.5% annual degradation. Average solar rate is assumed to be $0.185/kWh and escalate annually at 2.9%.)

The added bonus? Well, if you’re a PG&E customer, you’re likely all too aware of the problem with blackouts. It’s a common, and understandable, misconception that solar panels can’t reliably provide energy. People assume that because weather can be unpredictable, an energy source impacted by weather would be too. But one of the most exciting energy innovations in recent years is a solution to exactly this.

How solar can help you avoid blackouts.

Most of us are at least familiar with the concept of a generator. Generators can be a hassle to get up and running and, even once they are, they tend to be noisy (and sometimes pretty smelly). It’s something you never want to use, but are super glad you have in the event you need it. Our integrated home energy systems take this same approach, but eliminate all the inconveniences by automatically using the clean power your solar panels have produced to run appliances in your home.

A home battery stores excess energy at times when your panels are generating more power than you’re using. This is an automated process that gives you a power reserve without you having to do anything. In the event of a blackout, your home will still have access to energy so your food can stay cold and your lights can stay on.

Keeping all this in mind, it’s easy to see why solar has become an extremely attractive and viable alternative to old reliance on traditional energy companies for power. You can avoid rate hikes (like the latest from PG&E). You can sell excess energy to the grid to make your power more affordable. And you can prepare yourself in the event of blackouts in your area. All of that comes with the added bonus of doing your part to repay the planet we all love. If this sounds intriguing to you, reach out to us today to get a free consultation. Our consultations are a quick and obligation-free way to get a custom estimate on what solar would cost you, how much environmental benefit panels could achieve from your roof, and even a design proposal so you can see what they’d look like on your home.