January 26, 2017 | By RGR Marketing Blog

The Biggest Solar State Has News

In 2016, two of California’s largest utilities, Pacific Gas and Electric Co. and Southern California Edison Co., implemented the biggest electric rate hike in the state’s history with the largest energy consumers being hit the hardest. In California, those who use the most energy could be looking at rates 80 percent higher (an average increase of $85 per month) than what they were paying before.

The new rate hike, which took effect in June (but which is also retroactive back to March 27 when the rate hike was approved), affects roughly nine million customers, or about 19 percent of the two utility companies’ residential customers. Low-income families and those who practice energy conservation methods were not affected by the rate hike.

Further, the new rates aren’t only impacting residential users. Industrial customers have been handed a 50 percent rate hike, while commercial and agriculture customers have also seen smaller increases.

Solar Power Use Expected to Grow

With solar power becoming less expensive to adopt with each passing year, the recent rate hike has opened up a window of opportunity for residential and commercial energy customers to seek alternative energy sources. As a result, the California solar power industry is expected to experience significant growth over the next few years.

Also helping improve the attractiveness of solar power delivery is the fact that California utility regulators, which, while passing new rules that have increased the costs for rooftop solar system owners, prevented even higher fees being levied against solar users. California utility companies, Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric, had pressed the commission to charge heftier fees to solar owners and require them to pay an electricity transmission charge to ensure that they paid their fair share of the cost of maintaining the state’s electrical grid. The measure would eventually see the transmission charges being dropped from the new fee structure.

With California’s average solar customer having a monthly electric bill of about $82, the new fees, had they been passed, would have raised that amount to $91. A utility counterproposal would have increased it to $103. Currently, solar owners pay an average $6 monthly charge. With the transmission costs that were being pushed for by the energy companies, the average monthly charge could have as high as $18, essentially wiping out the savings they enjoyed from their solar systems.

How High Energy Users Can Benefit From Solar

Granted, for most high-energy consumers (i.e., those who have exceeded 400% of their baseline at least once this year), making the switch from their on-grid electricity to an off-grid solar power delivery system is not entirely realistic. As far as solar systems have come in recent years, most homes and businesses still require at least some amount of “dirty energy” to meet their daily demands, especially with how technologically dependent most households and companies are.

But, if your customers are getting at least some of their energy from a solar system, high-energy consumers may be able to drop their grid-delivered energy consumption down to a more manageable level, ideally below the threshold for the new rate hikes (or at the very least down to a Tier 2 usage allowance), which would still result in a higher rate, but not as high as the one charged to high usage customers.

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