Electric Bills on the Rise Again in Ohio
Inflation is on our minds. As we see inflation creep into all corners of our lives – from prices at the grocery store to new car costs – we wonder how increased costs will affect our energy prices at home.
We can tell you one thing we have known here in the solar industry for a long time: Energy rates will continue to rise.
According to the latest data from the U.S. Energy Information Administration, electric power is up 8% nationwide from 2021 and 6% in Ohio. This rise is far beyond the 3% inflation rate we have historically modeled for our customers to help them understand how electricity rates impact their solar savings.
In this article, we will explain why electric costs are rising in Ohio and what you can do to insulate your family or your business from ongoing energy inflation.
Why are Electric Bills on the Rise in Ohio?
Several factors are driving this upward curve.
The most immediate reason for the price jump in electricity rates is the war in Ukraine. Natural gas (which is burned to make electricity) accounts for 40% of the electricity supply in the U.S. Due to disrupted supply patterns between Russia and Western countries, costs are up worldwide.
Costly upgrades by electricity suppliers are needed to modernize the electrical grid. Hardening the electrical grid for natural disasters in the face of climate change is part of that modernization that is becoming increasingly difficult to put off.
The winter storm in Texas in 2021 that left many without power for weeks, is an example of the vulnerabilities that utility grids across the nation will face in the future.
As natural disasters become more common, utility providers must improve their infrastructure.
Add in increased supply chain costs that we’re all facing, and we know that these improvements will be costly for utility companies. The cost of utility grid upgrades inevitably trickles back to ratepayers in the form of rate increases.
According to the New York Times: “U.S. utilities could spend hundreds of billions of dollars in the coming years to repair and upgrade grids.” (https://www.nytimes.com/2021/10/28/business/energy-environment/electric-grid-overload-solar-ev.html)
You may remember when, at the beginning of 2020, oil production came to a screeching halt when nationwide stay-at-home orders took effect. Oil production has yet to return to pre-pandemic levels of production.
Following this disruption, some refineries opted not to re-open. The lack of supply is driving fuel prices for electricity up further.
All these factors add up to energy bills going up.
As a result of the increases, we see a strain on our budgets. We see that strain at the pump, in grocery stores, and our monthly energy statements.
What fuel source makes up my energy mix?
The E.I.A. is required to report on the utility makeup and prices for homes, businesses, and organizations across the nation. Our government uses these reports to help them make decisions about energy policy. You can track which energy is being produced and used in your state here: https://www.eia.gov/state/?sid=US
The Future is Clean Energy
Saving potential with solar will climb! When we look into the future, we know that conventional electricity will only become more costly to consumers due to supply shortages, grid upgrades, and natural disasters.
You have the option to take control of your own power at home and/or your business through solar.
Why wouldn’t you choose solar when you have the power to make your own energy and lock in your rates?