Does it feel like your electric bill gets higher every year? Does it feel like your electric bill changes every month and is unpredictable? You aren’t the only one! We talk to homeowners every day who are experiencing the same problem.
You wonder: Why do my electric bills increase? What can I do to stop them from increasing? Read on to learn about how solar provides a solution to fluctuating energy costs.
Energy Costs on the Rise
Residential solar energy systems are gaining momentum quickly. According to the Solar Energy Industries Association (SEIA), as of 2019, the United States has 2 million solar installations. This reflects major growth in the solar sector in the U.S., which just 3 years ago reached 1 million solar installations.
What is fueling the demand?
As you know, electricity prices have been on the rise over time. Each state has seen this increase with price rises that are felt by homeowners. Monthly, these prices rise and fall– which means that your utility bill is pretty unpredictable. Even if you use the same amount of electricity every month, you can’t predict what your electricity bill will be. When you add in seasonal variables that are also unpredictable (heat waves in the summer, cold spells in the winter), it’s almost impossible to predict what your energy consumption during these months will be.
Fluctuating energy prices and weather conditions can have a dramatic influence on monthly energy bills.
What is the cause of fluctuating energy rates? There are many factors but here are a couple:
- The Rise of Natural Gas – in recent years, natural gas has become the new go-to fossil fuel for energy production. Between changes in extraction methods to stored reserves and demand, natural Gas fluctuates in price more than coal and nuclear power.
- Coal & Nuclear Plants Closing – with the rise in natural gas production, coal and nuclear power are on the decline. This adds to the instability in the energy market and leads to higher and more unstable rates.
Budgeting for Stability
Solar helps you budget for stability by controlling a portion of the electric spend with known costs.
Solar can help by reducing this variability in pricing that you see month to month. If you choose to finance your solar system and pay it off over time, your monthly solar bill will be fixed. You’ll have your loan locked in at the same monthly payment. So your utility payments, more or less, will be at frozen rates for the next 5-20 years.
How will solar effect my monthly bill payments?
When you go solar, the number to kilowatt-hours you purchase monthly from the utility goes down. This is accounted for through a process called net metering. Every month you are only billed for the amount of energy you have used in excess of what your solar panels have produced. If you’ve over produced, you are credited for this excess generation. This credit will be applied to future bills in months when you use more energy then you have made.
Your energy charge- or killowat hours consumed- is often the largest part of your bill. Other line items on your bill, such as the “delivery service charge” which is the fee the utility charges of the use of their grid will also be impacted by how much solar you generate.
Lets imagine your home uses 1,000 kWh per month. If your solar system generates 800 kWh per month, you’ll be left with 200 kWh that you’re paying the utility for. So you will still see rate increases, but only on that 200 kWh that you’re still getting from the utility. The other 800 kWh are free, after the cost of the system itself. 10 years from now you’ll still be getting that 800 kWh for the fixed cost of your solar energy system, no rate hikes. You will certainly be paying more for that 200 kWh of utility power that you use, but again, paying an increased % on 200 is much better than the full 1,000 kWh. Additionally, the money you will have saved by avoiding these increases will have paid for the panels themselves… and then some.
What Can We Do?
All in all, you will be paying substantially higher rates for energy in the next ten years. The more control you have over your power supply, the more you control your electric bills.
Conservation is important: turn the lights off, keep the AC and furnace at a reasonable temperature, run full loads of laundry. We talk with customer who are taking these steps but not seeing results. Why? Because of the described fluctuations in electric rates. Utility rates will continue to rise and at home energy conservation measures won’t be enough to keep your bill steady.
Solar energy is a solution to unpredictable and rising energy rates.
Give us a call today to talk to a knowledgeable Solar Consultant. They’ll explain how much you pay for energy now and how much you’ll be paying for energy in the future- if you do and if you don’t go solar. Fill out your information here to speak with a Solar Consultant.