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Thought I'd throw this together to show that electric rates in my area are actually decreasing.
Here are the variable amounts from my Bill for some prior months going back to 02/2011.
02/08/11 (reading date)
Generation Charges 1,283 kWh X $0.09070 116.37
Alt. Energy Portfolio Standard 1,283 kWh X 0.00120 1.54
Transmission Charges 1,283 kWh X 0.00730 9.37
Distribution Charges 1,283 kWh X 0.05960 76.47
0.1588/kWh
09/08/11 - higher summer rates
Generation Charges 500 kWh X $0.09550 47.75
Generation Charges 1,595 kWh X 0.10820 172.58
Alt. Energy Portfolio Standard 2,095 kWh X 0.00140 2.93
Transmission Charges 2,095 kWh X 0.00730 15.29
Distribution Charges 2,095 kWh X 0.05960 124.86
0.1734/kWh
01/09/12
Generation Charges 1,404 kWh X $0.09180 128.89
Transmission Charges 1,404 kWh X 0.00740 10.39
Distribution Charges 1,404 kWh X 0.06000 84.24
0.1592/kWh
09/05/12 - higher summer rates
Generation Charges 500 kWh X $0.07830 39.15
Generation Charges 1,831 kWh X 0.08360 153.07
Alt. Energy Portfolio Standard 2,331 kWh X 0.00070 1.63
Transmission Charges 2,331 kWh X 0.00740 17.25
Distribution Charges 2,331 kWh X 0.06000 139.86
0.1505/kWh - far cheaper than prior year
I commissioned our Solar PV array on 12/15/12
(a lot of clouds since this date)
The real benefit will begin next month with a full month of
production, no impact by the two test dates where I produced
75 kWh and got billed for it in this bill.
01/08/13
Generation Charges 1,134 kWh X $0.07660 86.86
Alt. Energy Portfolio Standard 1,134 kWh X 0.00070 0.79
Transmission Charges 1,134 kWh X 0.00960 10.89
Distribution Charges 1,134 kWh X 0.06190 70.19
0.1488/kWh
The .1488 is the cheapest I've paid for electricity in years. I have a graph going back to 2007 which showed rates as high as .176/kWh. Back then, into 2009/2010, there was a lot of incentive by the PA Sunshine Program to incite Solar PV installations. And SRECs were "higher" then at $300/ea. So, a variety of solar installers popped up back then.
PA has Generator competition now and the big issue is that the competition lowers their comparable Generation Charges.
What our PECO electric POCO does is lowers the Generation charges and then increases Distribution Charges. They charge Dist. for
the competitive Generators and as such, they'll recoup customer loss who shopped-around by charging an ever-increasing Dist. charge for controlling the wires.
Generation charges dropping is due to increased use of Natural Gas at a cheaper rate. It is also synthetic due to the increased Distribution charges.
Conclusion - cheaper rates now in January, 2013 than 2012 and 2011.
I don't know if other states where Solar PV installs are being done more (CA, NJ, LA, AZ, NM, etc.) but in PA, the future of solar installations really lies in large commercial installs and not much in terms of homeowners. Our rates from PECO are higher than nearby counties (as much as 50% more than Lancaster County with PP&L). This could reverse but takes a lot of effort on the part of the electric POCOs to request rate increases through the state energy commissions. Solar installs in PA will wane for residential arrays due to no more state incentive available. The only way to really sell solar to residential owners in PA will be to find those with the personal incentive to do a project. There may be more and more DIY installs going on out there where people buy product themselves and use an electrician to do the installation. Seems to me that if someone is considering purchase of a system and would be even taking out a HELOC or other type of loan to do it - really think about doing a lease program rather than purchase. At least you don't have to pay interest on a loan to pay for the system that would have a long payback period like here in PA.
Example of how to look at this economically. If you put in an $8KW system for $35K and pay cash, your ROI is about 12 years in PA (not including inverter replacement). If you instead put $35K into a High Yield corporate bond fund that has an annual return of 10%, you are up to $38.5K after one year. Do that for 10 years, with an average return of 7%, you will have $68K. After 12 years when solar has finally reached ROI, you then are saving perhaps $4K per year on the electric bill. But you will be making $6K on the investment. We don't know how the economy will be doing in 10 years - and what the power costs will be then. But we are pretty sure in PA that electric rates won't double in 12 years unless laws and legislation are enacted to increase costs. Returns on investments are also of some risk. Yes, the negative to the investing is you pay taxes on your gains. Fine - we all know that is to be accounted for. Let's say you make a net 5% per year on the investment. After 12 years, you have $62K. Investing has a compounding factor if you re-invest dividends while you don't get compounding with solar PV, you get .5% lower production per year.
Solar PV usually won't save you money - you can do far better in the stock market with proper investing. There is risk in doing either and of course, living efficiently and conservation are even cheaper to perform and payback is immediate. Why did I install a Solar PV array? For the life experience, because I'm interested in the technology, for the slight chance electric prices go up some day. I don't have plans to do any batteries or any kind of "prepping". But I think it's cool technology. I wouldn't have done it without the federal tax credit. We don't expect to see any SREC incentives of any value available for years, either.
With lower electric prices now from the POCO(s) and with flat or perhaps ever-increasing gasoline prices, this is a good time to consider electric cars going forward. With leases such as the new 2013 Nissan Leaf at $199/mo, commuters have an opportunity to save dollars switching to electricity for their auto fuel and that can save more per year than a Solar PV system would. Do both if you can afford it and could take advantage of the tax credits that are avaiable to you (not for leasing an EV, just for purchase). If you believe in this political banter about "North American Energy Independence by <some random year>" then this is one way to participate.
Here are the variable amounts from my Bill for some prior months going back to 02/2011.
02/08/11 (reading date)
Generation Charges 1,283 kWh X $0.09070 116.37
Alt. Energy Portfolio Standard 1,283 kWh X 0.00120 1.54
Transmission Charges 1,283 kWh X 0.00730 9.37
Distribution Charges 1,283 kWh X 0.05960 76.47
0.1588/kWh
09/08/11 - higher summer rates
Generation Charges 500 kWh X $0.09550 47.75
Generation Charges 1,595 kWh X 0.10820 172.58
Alt. Energy Portfolio Standard 2,095 kWh X 0.00140 2.93
Transmission Charges 2,095 kWh X 0.00730 15.29
Distribution Charges 2,095 kWh X 0.05960 124.86
0.1734/kWh
01/09/12
Generation Charges 1,404 kWh X $0.09180 128.89
Transmission Charges 1,404 kWh X 0.00740 10.39
Distribution Charges 1,404 kWh X 0.06000 84.24
0.1592/kWh
09/05/12 - higher summer rates
Generation Charges 500 kWh X $0.07830 39.15
Generation Charges 1,831 kWh X 0.08360 153.07
Alt. Energy Portfolio Standard 2,331 kWh X 0.00070 1.63
Transmission Charges 2,331 kWh X 0.00740 17.25
Distribution Charges 2,331 kWh X 0.06000 139.86
0.1505/kWh - far cheaper than prior year
I commissioned our Solar PV array on 12/15/12
(a lot of clouds since this date)
The real benefit will begin next month with a full month of
production, no impact by the two test dates where I produced
75 kWh and got billed for it in this bill.
01/08/13
Generation Charges 1,134 kWh X $0.07660 86.86
Alt. Energy Portfolio Standard 1,134 kWh X 0.00070 0.79
Transmission Charges 1,134 kWh X 0.00960 10.89
Distribution Charges 1,134 kWh X 0.06190 70.19
0.1488/kWh
The .1488 is the cheapest I've paid for electricity in years. I have a graph going back to 2007 which showed rates as high as .176/kWh. Back then, into 2009/2010, there was a lot of incentive by the PA Sunshine Program to incite Solar PV installations. And SRECs were "higher" then at $300/ea. So, a variety of solar installers popped up back then.
PA has Generator competition now and the big issue is that the competition lowers their comparable Generation Charges.
What our PECO electric POCO does is lowers the Generation charges and then increases Distribution Charges. They charge Dist. for
the competitive Generators and as such, they'll recoup customer loss who shopped-around by charging an ever-increasing Dist. charge for controlling the wires.
Generation charges dropping is due to increased use of Natural Gas at a cheaper rate. It is also synthetic due to the increased Distribution charges.
Conclusion - cheaper rates now in January, 2013 than 2012 and 2011.
I don't know if other states where Solar PV installs are being done more (CA, NJ, LA, AZ, NM, etc.) but in PA, the future of solar installations really lies in large commercial installs and not much in terms of homeowners. Our rates from PECO are higher than nearby counties (as much as 50% more than Lancaster County with PP&L). This could reverse but takes a lot of effort on the part of the electric POCOs to request rate increases through the state energy commissions. Solar installs in PA will wane for residential arrays due to no more state incentive available. The only way to really sell solar to residential owners in PA will be to find those with the personal incentive to do a project. There may be more and more DIY installs going on out there where people buy product themselves and use an electrician to do the installation. Seems to me that if someone is considering purchase of a system and would be even taking out a HELOC or other type of loan to do it - really think about doing a lease program rather than purchase. At least you don't have to pay interest on a loan to pay for the system that would have a long payback period like here in PA.
Example of how to look at this economically. If you put in an $8KW system for $35K and pay cash, your ROI is about 12 years in PA (not including inverter replacement). If you instead put $35K into a High Yield corporate bond fund that has an annual return of 10%, you are up to $38.5K after one year. Do that for 10 years, with an average return of 7%, you will have $68K. After 12 years when solar has finally reached ROI, you then are saving perhaps $4K per year on the electric bill. But you will be making $6K on the investment. We don't know how the economy will be doing in 10 years - and what the power costs will be then. But we are pretty sure in PA that electric rates won't double in 12 years unless laws and legislation are enacted to increase costs. Returns on investments are also of some risk. Yes, the negative to the investing is you pay taxes on your gains. Fine - we all know that is to be accounted for. Let's say you make a net 5% per year on the investment. After 12 years, you have $62K. Investing has a compounding factor if you re-invest dividends while you don't get compounding with solar PV, you get .5% lower production per year.
Solar PV usually won't save you money - you can do far better in the stock market with proper investing. There is risk in doing either and of course, living efficiently and conservation are even cheaper to perform and payback is immediate. Why did I install a Solar PV array? For the life experience, because I'm interested in the technology, for the slight chance electric prices go up some day. I don't have plans to do any batteries or any kind of "prepping". But I think it's cool technology. I wouldn't have done it without the federal tax credit. We don't expect to see any SREC incentives of any value available for years, either.
With lower electric prices now from the POCO(s) and with flat or perhaps ever-increasing gasoline prices, this is a good time to consider electric cars going forward. With leases such as the new 2013 Nissan Leaf at $199/mo, commuters have an opportunity to save dollars switching to electricity for their auto fuel and that can save more per year than a Solar PV system would. Do both if you can afford it and could take advantage of the tax credits that are avaiable to you (not for leasing an EV, just for purchase). If you believe in this political banter about "North American Energy Independence by <some random year>" then this is one way to participate.
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