solar-savings-meter1editors-blog-entry3There are a lot of reasons I’m glad we’re going solar in June of this year.

Here’s yet another one: Xcel Energy, our utility, recently announced it is pushing for an 8 percent rate hike to kick in April 1. Chances are the Colorado Public Utility Commission will approve this rate hike, which Xcel says a rise in natural gas prices and a colder-than-normal winter along Colorado’s Front Range have necessitated.

The increase means average Xcel customers — using 632 kWh of electricity per month — will shell out an extra $5.18 per month, or around $60 more per year than they are paying now.

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Historically, in the U.S., utility rates have risen between 5 and 8 percent annually. So, this year’s Xcel rate hike is quite average.

Most folks don’t pay attention to utility rate hikes. They just accept them as a fact of life. Either that, or many find it boring to dive into the intricacies of electric power and kilowatt hour rates and prefer to live in the (expensive) convenience of the moment.

That’s their choice.

However, they’re choosing to lose money — and to line the pockets of their local electric utility.

In contrast, we’ll be saving money every year as electric rates, and, of course, the cost of gasoline, go up, and up, and up (‘Solar payback comes early for solar-charged driver’).

The typical home solar system in the U.S. reaches payback — the point at which the total cost of the system equals the cost a homeowner would pay a utility to produce the same amount of electricity — at about seven or eight years. After that, the electricity produced by one’s home solar system is free. (You will have to replace the central inverter sometime between years 12 and 15).

Along the way to payback, you will have avoided substantial rate increase costs. So, for example, if your electric bill is $1,000 per year right now and you put up a solar system that covers 100 percent of your home electric use and assume that electric rates increase 8 percent each year for the next 10 years, you will have avoided paying $1,000 in rate hikes to your utility a decade from now — plus, of course, you will not end up paying your utility the “original” $1,000 in any of those years.

Who’s saner? The homeowner who saves money, or the homeowner who elects not to save money because he or she thinks — incorrectly — that solar is more expensive than covering the 8-percent rate hike your electric utility foists on you every year?

Some of neighbors will probably question our sanity when we plunk down $8,500 for a 5.5 kW solar system in June (actually, we’ll be putting down $11,500, then be waiting a year for our 30-pecent Federal Tax Credit to bring our total out-of-pocket cost to around $8,500).

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But who’s saner? The homeowner who saves money, or the homeowner who elects not to save money because he or she thinks — incorrectly — that solar is more expensive than covering the 8-percent rate hike your electric utility foists on you every year?

Yes, it’s difficult to put together the cash to pay for decades of electricity up front (‘High short-term costs a barrier to long-term savings’). It’s also more effort than having your electric utility automatically deduct money from your checking account every month. But, for the vast majority of homeowners, the extra effort pays off.

In the end, we’re very excited to be getting on the solar savings express soon — almost, but not quite, in time to completely beat yet another electric rate utility hike — and to be leaving those inevitable annual increases behind forever.

Hopefully, some of you will do the math and consider joining us!

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