How Solar Protects Against Utility Rate Hikes
Feel like your electricity rate is set at the whim of the utility? Solar is your answer for avoiding rate hikes and electric bill fluctuations.
It’s that dreaded moment when your electric bill comes in—how much is it going to be this time? “I hear all the time: ‘I’m tired of paying the utility company. I don’t even know why my rates went up,’” says Alan Gauntt, CEO of Granite State Solar.
The good news is that solar can be your solution. “Historically rates go up, and they're only going to continue to go up,” says Eric Kilens, Senior Solar Advisor at Granite State Solar. “So, you might be spending a little bit more now on solar, but there's a much more long-term game.”
Here’s how this smart investment works.
Do Solar Panels Really Save You Money?
Yes! “When someone takes out a loan through our partner bank VSECU, what they're essentially doing is they are locking in their monthly electric costs,” says Eric.
Eric says that people who heat their homes with oil or propane may already be familiar with this idea. “When they’re predicting a really harsh winter coming, that's a signal that maybe propane and oil costs are going to be on the rise,” he says. “A lot of people contact their local provider and try and lock in their heating fuel costs knowing that costs are only going to go up. Essentially, that's what solar customers are doing too, except they're not just doing it for one season. They're doing it for the next 25 plus years.”
Is Solar Cheaper than Electricity?
While our lending partner, VSECU, tries to get loan payments to be about the cost of your electric bill, it may come in a little higher. But this fails to take future rate changes into account.
For instance, say there’s a rate hike and your $100 electric bill goes up to $115—not because you’re using more electricity, but simply because the cost of electricity has gone up. If your loan payment comes in at $110, yes, your costs start out higher than your electric bill, but you’re protected against future rate hikes. And then you’re set with free electricity once your loan is paid off.
Eric explains it another way: “Look at it this way: you might be spending a little more a month to have your solar panels, but you just made a $30,000 investment to your property for essentially only $50 a month. Yeah. And when you look at it that way, it's actually a really smart investment.”
What If I’m Not Financing?
You’re still seeing a financial benefit.
“When you're purchasing your solar system outright, in essence, what you're doing is you're pre-buying your electric costs for the next 25 plus years,” explains Eric. “So, we can do the math.” Take your average monthly electric bill and multiply it by 12 to get your average cost for the year. Then multiply that by 30 to 35 years, which is the lifespan of a solar system. That’s how much you’d spend if you choose not to go solar—and that assumes that electricity rates stay the same. (Which, spoiler alert, they won’t!)
Then compare that cost to your solar investment. “You'll quickly find out that you're going to be much better off, in the long run, going solar,” Eric says.
By Julia Westbrook
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