With Electricity Prices Rising, Solar Brings Budget Stability

With Electricity Prices Rising, Solar Brings Budget Stability

A quick look at our electricity bill confirms what we're seeing in the news: monthly electricity prices are on the rise in Virginia. We wondered why and found that a recent official announcement from the Virginia State Corporation Commission (SCC) reflects what many Dominion customers have already seen on their bill — a double-digit price spike. 

The SCC, which regulates VA utility prices, says the pricing that began as an interim hike in July is now official — and will stay in place for many years to come. The SCC announcement said Dominion Energy residential customers could see their average monthly bill go up by an average of $14.93. That's concerning, since electric rates have already risen 20% in the past 12 months in VA. 

So why the higher prices? And what can a homeowner do about it? 

Rising fuel costs are a nationwide problem

The SCC says the increased rate — which covers fuel used to generate electricity and costs associated with power purchased by Dominion — was needed because of an expected rise in fuel costs between July 1, 2022, and June 30, 2023. This is on top of already rising prices statewide, according to recent data from the U.S. Energy Information Administration (EIA):

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Of course, these price hikes are not just confined to Virginia. Natural gas prices are on the rise globally, and this is affecting electricity prices throughout the US.

The EIA forecast in its latest Short Term Energy Outlook said the average price of electricity for residential consumers could reach $0.1524/kWh in 2023. That would represent about a 3.3% increase from this year — and EIA says prices are already 7.5% higher today than they were in 2021.

“Higher retail electricity prices largely reflect an increase in wholesale power prices driven by rising natural gas prices,” the agency said.

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What Can You Do to Combat High Electricity Bills? Go Solar!

So what's a homeowner to do? Our answer is predictable — just like your energy bill will be with solar.

Going solar means part or all of your utility bills will be eliminated, giving you a more stable monthly energy payment.  Depending on how you finance your solar project, you'll either have predictable monthly payments to pay off a loan — or if you pay up-front then you're waiting for your break-even day. Either way, the part of your energy that comes from solar will be a known cost for the next 30-plus years over the life of your system. 

The best part is that your known cost is usually less than what you'd pay the utility for fossil-fueled electricity. And once you do reach that magical day when you've paid off the loan or broken even with your upfront payment, your solar energy is free for the rest of the life of the system — which can often be over 40 years. It takes an average of 12 years to break even with solar in Virginia, so over the longterm there is no better way to insulate your home from the rising cost of electricity. 

Get in touch today!

Now that the federal tax incentive for solar is back up to 30%, it's a great time to explore solar. Give us a call now to learn how solar could work for your home!

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