What’s the rub?
Effective April 1st, 2018 (all jokes and pranks aside), National Grid will increase their customer’s electricity rates by 2.9%, that’s $2.22/month for the average household. But wait! There’s more. Under the current plan approved by the state, electricity consumers in National Grid territory will experience a hardy 3.8% increase in 2019 and a 3.9% increase in 2020, totaling an average of $8.50/month or an additional $102/year.
On the more laudable side, this plan isn’t all about concentrating wealth. Nope, in fact, this rate increase plan will help to accomplish a few of the state’s goals including but not limited to:
- Continued support of homeowners looking to improve their home’s energy efficiency
- Capital investments to build the grid of the future
- Extension of the low-income discount program
- Street lighting upgrades
Here’s what Ken Daly, National Grid’s NY President, had to say about the approved plan:
“After more than a decade of bill stability, we are pleased that our discussions with the PSC staff and other parties have resulted in a three-year agreement that will phase in the delivery price increases, while providing enhanced energy efficiency and bill management tools, and continuing our recently-increased support for those struggling to pay their bills.”
Interesting strategy: We’re going to increase support for those struggling to pay their bills BY increasing their bills… I digress.
Looking at the numbers:
An overpriced cup of coffee per month doesn’t sound like much but what does this look like over several years? Let us delve a little deeper…
So, say you’re paying an average of $100/month or $1,200/yr, under the old rates. If nothing were to change over the next 25 years your total energy cost would amount to $30,000 ($100x12x25). That’s simple math, but the reality is, that small $30k isn’t REALLY $30k. In fact, it’s actually more.
For all intents and purposes, consider that currency inflation will likely hover around the 1.5% annual increase that is typical of a non-recessed economy. In today’s money, that $30k is effectively $36k in year 2043.
Now, let’s apply the rate hikes. The electricity cost for the average CONsumer will amount to $1,235, $1,282, and $1,332 for 2018-2020, respectively. Now compound on inflation and cumulate 25 years worth of electricity expenses and, in the most conservative of estimates, you come to a grand total of $39,846! This, obviously, doesn’t take into account that over the next 25 years N-Grid rates could be hiked again, and again, I think you see where I’m going here.
Many of you are probably thinking that $40k could very easily buy you a new truck, a 10-20%+ down payment on a new custom built home, or a nice chunk of land near the high peaks region of the Adirondacks.
The problem is, as National Grid customers, we are powerless when it comes to the electricity rates we pay… Or are we?
Enter the PROsumer (Producer + consumer 😉)
With a solar electric system producing electricity for your home or business, in central New York, you CAN lock in your electricity rate. Again, let’s have a deeper look.
So, for consistency’s sake, let’s take that same $100/month electricity consumer. With today’s solar costs and incentives, an average CNY homeowner can replace 100% of their electricity costs for ~$8,200* to go solar in CNY for the next 25+ years.
*That is an up front cost but can easily be financed for around $75-$80/month for 15 years (yes, that’s $20-$25 lower per month!).
And, as a newly minted prosumer you’d save between $28,000 – $32,000 over the course of 25 years (see chart below for contrast).
The only question remains, would you rather remain a consumer or switch to solar and enter the era of the prosumer?
As always, feel free to subscribe to our blog for more free content or request a quote for information on how solar can help you lock in your electricity rate.
P.S. We have added an interactive comments feature to our blog below so feel free to send us questions or suggestions for future blog posts.