Utility companies have historically raised their rates by 6.2% over the past 20 years. This is extremely troubling considering the rate hike is more than double the rate of inflation in the U.S., which is currently 2%. In recent years, utility companies have increased their rates as much as 5-8 % in 2016 and even up to 14% in 2017. This drastic increase is largely due to consumers shifting their electricity needs from traditional utility companies to their own individual solar systems.
Figure 1 - Solar Savings over Time
One of the best features of solar is that you start saving instantly. However, it turns out that the least amount of savings will be seen in year one (see left). As time progresses your savings will be constantly compounding, meanwhile the utility company (whom you are only paying pennies) continue to raise their rates. In contrast, your new solar bill will remain the same every month, every year, until the end of the agreement.
The figure below illustrates solar's 20 year savings versus a traditional utility company. As stated before, utility companies have historically raised their rates 6.2% annually. To give a more conservative estimate we lowered utility's annual increase to 5% in the illustration for the sake of a more modest estimate. If a homeowner is paying a $200 monthly rate this year, they can expect to be paying a $507 monthly rate 20 years from now. Quite a substantial jump especially when considering what the total cost of electricity will be over 20 years, which we can see calculated to $79,572.
Now take a look at what that same person could expect to be paying with solar. First, their utility bill is almost entirely eliminated, and then their monthly solar payments are even lower than what they were paying with the utility company. In addition, the payments will remain the same every month, every year, until the end of the agreement. Thus adding stability to your finances, dramatically lowering electricity costs, all while adding value to the overall price of your home. The total solar costs for this particular individual over 20 years was $42,000, which comes to a total savings of $37,572. This could mean a new car, a down payment for a house, your son or daughter's college tuition, or additional retirement funds. Regardless of that decision, Custom Home Services is your avenue to financial well being.