Many Californians are angry about skyrocketing electricity bills, particularly PG&E customers, as PG&E has hiked their electricity prices three times in the past year. While the Sacramento Bee reported that the combined electricity and natural gas rate increase for PG&E customers was 21%, many customers are reporting much higher cost increases. As quoted in the story, one customer paid $72 in November of last year, only to get hit with a $466 bill the next month.
According to PG&E, this is due to their recent reworking of their pricing structure, with significant rate increases for particularly heavy users. But rate comparisons indicate that PG&E’s prices are much higher than many comparable energy suppliers.
PG&E charges much more than other California utility companies.
The Sacramento Municipal Utility District (SMUD) website features a comparison of the average monthly electricity cost for households serviced by various utility companies indicates that PG&E charges significantly more than every other major Northern California utility company.
According to SMUD’s figures, PG&E charges a household that uses 750 kWh of electricity 26.3% more than their next closest competitor, Modesto Irrigation District, and nearly 40% more than SMUD. And this significantly higher cost can’t necessarily be attributed to PG&E’s claims that the higher costs are largely due to excess use. The consumption rate that SMUD chose for their comparison, 750 kWh per month, is 25.7% higher than the average California household’s monthly consumption of 557 kWh in 2015 (as reported by the US EIA). But, it’s 16.8% below the national average of 901 kWh per month.
It seems unlikely that this pricing discrepancy reflects PG&E’s high usage surcharge, but rather, it appears that PG&E simply charges significantly more than its competitors.
So, what can homeowners do to combat ever-increasing electricity costs?
Tax incentives make this a great time to invest in a home solar system.
Fortunately, the time has never been better to purchase a home solar energy system.
Back in 2005, the Energy Policy Act created a Solar Investment Tax Credit (ITC) for homeowners and businesses that purchased solar systems. This credit allowed solar system buyers to deduct 30% of their costs from their taxes. However, for several years this tax credit was capped at $2,000. This meant that costs over approximately $6,700—far less than the retail cost of such a system—didn’t count towards the credit.
However, this cap was repealed in 2009, and now there is no upper limit. For every dollar you spend on your system, you can reduce your tax payment by 30 cents. In addition, if the credit exceeds your total tax liability for the year, the remaining credit can be carried over to subsequent year(s).
But it should be noted that this tax credit won’t exist for ever. Under the terms of the 2015 extension of the ITC, the credit will drop to 26% of total costs in 2020, 22% in 2021, and 0% after that.
Californian homeowners are especially fortunate, as they can take advantage of NEM 2.0.
While the entire country can take advantage of the solar tax credit, Californians can save more on their electricity bills than most solar system users. This is due to the California Public Utilities Commission’s net energy metering program, the current iteration of which is known as NEM 2.0.
Under NEM 2.0, home solar system owners can transfer any unused electricity generated by their systems to the local electrical grid in exchange for an energy credit that is deducted from their electrical bill. When you aren’t home during the day, your system will generate electricity and pump it into the grid, essentially running your electric meter backwards. At night when your solar system isn’t generating electricity, you’ll effectively be using the electricity that you ‘banked’ during the day.
If it wasn’t for NEM 2.0, you would have to choose between installing and maintaining an expensive battery system to store your unused electricity, or allowing that generation capacity go to waste.
If you’re ready to cut your electricity costs and take full advantage of federal tax credits and California’s NEM 2.0 system, call the solar experts at Gilmore. We offer free consultations, and work with the best solar system installation companies in California.
Stop getting fleeced by PG&E, and start saving!