California utility rates are already the highest in the country, and electric bills will continue to rise. Private California utility companies keep fighting to raise their prices:
- Southern California Edison rates increase 20% this year, with more increases next year.
- PG&E is requesting an 18% increase in 2023.
- SDG&E residences experienced an 11% increase in 2019.
These utility rate increases are just too high, especially in our current economy. However, hope is available for those ready to stop price gouging from this state-wide energy extortion.
Solar energy offers you electric independence and financial stability as electricity costs continue to rise.
CPUC & Electricity Rates
Affordability is becoming a growing concern as California works toward a dynamic new power system to try and stop the climate crisis and extreme weather events. While these electricity rates rise faster than inflation, they are straining the budgets of vulnerable customers. New approaches that protect customers from high bills are urgently needed.
The California Public Utilities Commission has ensured that the state will not let skyrocketing electricity rates threaten reliability or policy goals. Protecting residents as California transitions to distributed energy resources will “Enable swift evolution of grid capabilities and operations to integrate solar, storage, electric vehicles and charging equipment,” according to a recent report released by the CPUC.
However, the transition is not going to be cheap, and the protection that the CPUC is providing for the residential ratepayers is negligible. While the CPUC did reject the Southern California Edison (SCE) 12% increase in 2021; however, they did allow an average electric bill increase of 8.9% per month. These SCE rate increases are supposed to help pay for infrastructure upgrades and wildfire prevention by replacing 4,500 miles of overhead wire with covered conductors.
“This proceeding created the opportunity for the CPUC to make strategic decisions on the future of Southern California Edison’s capital investments,” said CPUC Commissioner Genevieve Shiroma in a statement.
To the average resident and utility bill recipient, this doesn’t feel like protection. It feels like we are stuck paying for these utility companies to fight against the tide of renewable energy growth.
Utility Rates, Rules, & Corruption
The U.S. energy mix is rapidly changing. Renewables keep growing with no signs of stopping, and solar energy has been established as the cheapest and easiest form of electricity on the planet today.
Meanwhile, fossil fuels were struggling even before the COVID-19 pandemic precipitated a dramatic drop in oil prices and prompted the collapse of coal.
Because many of these utilities are losing money from renewable energy integration, they are using this position to turn to the California government for bailouts in the form of changing rules and rate increases, making customers pay for the changes.
While these rate increases are not necessarily problematic in and of themselves, they are being controlled by for-profit utility companies simply looking to increase profits. Often the justification they give for these increases is biased against the general public and downplays the negative financial and environmental consequences.
California residents have started to fight back! An L.A. county resident has filed a proposed initiative to abolish the California Public Utilities Commission by amending the state’s Constitution.
As part of the initiative, the resident cites catastrophic and deadly wildfires caused by utility companies, blackouts, and a corrupt, dysfunctional PUC pushing constantly increasing utility bills. While all of the charges are accurate, the answer to this problem is not to remove the People’s Commission created over a hundred years ago.
What we need to do is to reform the CPUC and eliminate the interference and corruption coming from politicians, special interest groups, and electrical utility monopolies.
Electric utilities have an integral role in energy generation and are the biggest stakeholders being affected by this transition. Many have resisted these technological trends powering the modernization of the U.S. electrical grid. Like Southern California Edison (SCE), others have had programs like NEM to help solar energy users and non-solar residents benefit from solar power.
These programs have slowly started to work against SCE’s bottom line, and they have been fighting to change the rules. They want to make them more favorable for the utility company while gutting the benefits for solar energy users.
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The Solar Cost-Shift
When utility customers take a look at their monthly bills, a big portion of it is associated with “fixed costs,” which cover things like wires, substations, maintenance, and upgrades.
Under the net energy metering, solar customers can offset these bills, so they pay the utilities next to nothing each month. As more residents install rooftop solar systems, utilities spread these “fixed costs” over fewer customers making the non-solar customers end up with higher bills. That means the cost has shifted to non-solar customers.
The California Solar and Storage Association has called out the cost-shift argument for what it is, a profit grab for the utility shareholders. These private utility companies, like Southern California Edison, have always pushed rate increases as infrastructure and operating costs. Even the CPUC has admitted in white papers that the current system guarantees a rate of return for these utilities. Through the CPUC, they “are inherently incentivized to make investments to drive an increase in their profitability.”
Changing The Rules For Solar Users
A new joint proposal submitted by the big three utilities in Southern California (SDG&E, PG&E, and Southern California Edison) calls for changes that may affect new solar customers but would make solar much less valuable to everyone on their grid!
Among the suggestions they proposed, the customers would continue to be allowed to “bank” the credits they get from producing excess electricity. The difference with new customers is that they would be stuck to monthly “true-up” bills instead of yearly. In addition, the credits themselves could only be used roughly the same time as the day the energy was actually generated.
Another item that is being heavily discussed is the new proposed Distributed Generation Successor Tariff, which would work out to around $24 a month. This could potentially raise bills for solar users up to $90 a month just to be a solar customer.
Final decisions have not yet been made, but the future of residential solar power could be much less lucrative than it is today.
Understanding Your Utility Bill | NEM & Time-Of-Use
Solar energy is still the best alternative to utility control. However, utilities are wise to this technology and still try to trap users. Solar companies can help you avoid utility traps by sizing your system accurately based on your electrical usage, down to every hour of the day for the last year.
We will also inform you of the best Time-Of-Use Rate Plan to keep you ahead of the utility companies’ continued fight for your wallet. It is also the best time to get on the solar train with NEM 3 approach.
Net energy metering, or NEM, is an agreement with your utility company that they will track your energy consumption and solar production, store your extra energy in the grid, and credit you for electricity pushed to the grid but not used. They install a net meter that allows for a bidirectional flow of power from your panel to the grid. So, if you overproduce, your energy will be stored at the grid and available for usage when your panels aren’t producing.
Depending on the utility company’s agreement, there is a yearly or monthly “true-up,” at which time you will receive credits for your overproduction or a bill for under-producing and using electricity from the grid at the time-of-use rates. You can read about the current state of NEM here. (Hint: it’s not getting better).
Our company goes the extra mile to calculate users’ energy demand hourly, not just yearly, to nullify any time-of-use or other utility traps. What you get is a system that out-produces and out-earns what other companies offer.
Solar Energy Avoids Increasing Electric Bills
The average solar PV system costs about $25,000. That investment will result in immediate independence and savings, not to mention the 26% solar investment tax credit (ITC) you can claim on your taxes. Financing is an excellent option for those not able to pay everything upfront. The ROI for solar panels is available to all homeowners in California.
Solar panel systems will generate electricity for more than 25 years. When you calculate the savings from a solar panel system, you need to consider how much you’ll save for the next 25 years.
You can avoid electricity rate increases and inflation for many years to come with solar power, which is one of the most important factors in solar savings. With rates rising over 10% every year, the savings you will experience today will be quite small when compared to savings in your 25th year with solar.
The cost of residential electricity has increased 30% over the past 10 years, with California bearing the brunt of rising utility rates. As electricity rates continue to rise, the avoided costs associated with solar savings will rise right along with it. When you generate your own electricity with solar panels, you’re essentially locking in the price of your electricity and protecting yourself from unpredictable future rate increases.
Financing a solar system will remove your dependence on utility companies and shine some light at the end of the tunnel. After paying off your system, you are indebted to no one and no longer tied to the company’s rising utility rates, achieving energy independence. Financing offers you a fixed payment compared to fluctuating rates from utilities, and the 26% solar investment tax credit can be applied to your loan to reduce or maintain a low monthly payment.
Avoid PPA and Leasing Pitfalls
You want to own your system, not someone else. Involving yourself with a company that offers PPA or lease agreements changes who you pay. Instead of utilities getting your money, now your solar company does. This company reaps the profits and federal incentives you could get and only offers you a slightly lower bill you continue to pay for years. Additionally, when your agreement is over, or if not renewed, the equipment is uninstalled, and you are back at the mercy of current utility rates. You want to be free and independent, not back to square one.
Freedom Comes with Option One
People all over the country are taking advantage of solar savings, especially while NEM 2.0 is still in effect. Here in California, we have the perfect environment for solar and some of the highest electricity rates in the country. That also means residents have the most to save by going solar in California.
Here in Southern California, we are blessed with lots of sunlight. Our weather is ideal, and many typical models and builds of solar panels can thrive and produce the most electricity. This is why we are called the Golden State and why so many huge solar installations are built right near our home in the Mojave Desert.
However, the biggest and best reason to go solar is freedom from electricity rate increases!
That is what Option One Solar offers to its customers. You get energy independence; your solar cost is low; you own your system and all its rewards, and backed by a company with excellent warranties and customer support. No more uncertainty with your energy!
With over 50 years of experience, thousands of customers, and hundreds of 5-star reviews, we have built a reputation of excellence and always look out for our customers’ best interests. We install every solar panel ourselves and back up our work with the industry’s best 25-year full-coverage warranty.
Getting a free energy assessment from Option One Solar is as easy as giving us a call. No intrusive home consultations are necessary with experts like us. In minutes, we can gather information remotely and give more accurate quotes than our competitors.
Give us a call to get started: