Foto: Tracy R. Olson
Do you know why people prefer getting mail from the IRS more than from their utility company? Because, at least there’s a chance that they will get a refund from the IRS. Today, mail from the utility company will more than likely announce another price increase than ever before.
Across the country, residential electricity is getting more expensive every year. If you live in a populated area, it’s likely your bills are going to go up too. In California utilities are asking for double-digit increases. My parents in Maryland saw their bills increase 50% last year alone.
Residential electricity prices will continue to rise in most places because they’ve been kept artificially low by local regulators. As these rate caps are removed, like they will be in Pennsylvania in 2010, prices will jump.
For decades we’ve invested in natural gas power plants assuming the price for gas would be affordable. However, that price has quintupled over the last decade. It’s going up because we’re importing it from overseas and using it in record quantities.
Keith Johnson in the Wall Street Journal last week would have you believe that renewable energy—say from solar—is more expensive than traditional sources. That may be true for utility companies burning coal, but it is no longer true for consumers.
Homeowners are cutting their electricity bills dramatically by going solar. Let’s say you’re an average consumer of electricity in California, living in Fresno, paying $240 per month to Pacific Gas & Electric. You can purchase solar electricity from solar power companies like SunRun for $120 per month, saving 50%.
Unlike your utility that must adjust your bill every year depending on the input costs of the natural resources they use to generate electricity, solar electricity companies can fix your bill for years to come. These Power Purchase Agreements are now available for consumers – imagine if you could have had locked your price for gasoline in 1990 at $1.35 per gallon. Through PPA’s you can do just that with solar energy.
2 comments
Nat,
Kudos on seeing the need to bring Solar Power affordably to the masses, and on what you and your team at SunRun have accomplished. Last week Mark Higgins wrote a note about how the lack of liquidity was affecting commercial PPAs (Credit Crunch 2008 – the Impact on Solar Finance); what has the affect of the credit crunch been for you? Are your finance partners different? Are your projects equally threatened?
I experienced a 30% jump in my electricity costs a couple of years ago, and accepted it happily, because it involved a switch from my regular supplier – which sourced electricity mainly from large scale hydro, coal, and nuclear power – to a green electricity supplier which sources all its electricity from microhydro and wind generation.
As the conventional electricity prices have continued to rise, the price difference between by green supplier and the ‘dirty’ sources has started to drop. But since part of the cost justification of switching over was that we would cut our electricity use, and we did manage to trim our electricity consumption by over 30%, we wound up spending less money on electricity even with the premium we pay our green electricity provider.
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