Every year we see our electric rates continue to rise. New York State Electric & Gas (NYSEG) stated electric delivery rates will increase by 23.7% as early as May 2020. Articles of similar nature are being published in cities all over the country. We all see electric rates increasing in Florida, as legislation is being passed to make the electric grid more hurricane resilient. The increasing energy costs lead to homeowners all over the country asking the same two questions:
- Why is my electric bill rising?
- How can I save money on electricity?
There are several factors that affect electric rates. The largest cost of electric companies face is generating electricity. The maintenance and operations costs for operating a power plant continues to increase, and with that electric rates go up as well. The price of fuel is one of the driving forces that lead to increased costs to generate electricity. During periods of high demand for fuel electric rates go up due to the increased prices the electric companies have to pay to produce energy.
We also see increased electric rates when the demand for electricity goes up. The demand for electricity goes up in the summer when people are running their air conditioners, and in the winter when people put up their holiday lights. This leads to higher electric bills for consumers and more money for electric companies.
Weather conditions also play a huge role in the cost of electricity. Major storms can cause damage to powerlines and transformers. The cost of fixing these damages lead to higher costs for the consumer. Finally, regulations can affect the consumer’s electric bill. Some states regulate electric rates so they are consistent statewide, while others allow customers to choose an electricity provider. States such as California, Delaware, and New York are some examples of states that are deregulated. Both regulated, and deregulated states face increased electric rates year after year. As there is no end in sight for these rising electric rates, consumers are looking for ways to save money on electricity.
Saving money on electricity in 2020 may seem like an impossible task. Alternative energy may seem out of reach for many families financially. In reality, these are myths! It is a fact that solar energy can save consumers money long term.
New York, along with several other states have passed legislation to incentivize alternative energy. For example, in New York City, the green new deal has been passed to help make New York City carbon neutral by 2050. Another example of this is California passing a law that requires solar to be put on all new construction homes starting in 2020. Laws like this increase the amount of clean energy being put into the grid. Thus, lowering electric rates due to decreased cost for electric companies. Solar is one of the most easily accessible alternative energy sources for consumers. Laws implementing clean energy, and tax credits decrease the barriers to entry for solar. California has incentive programs to decrease barriers for low-income families to go solar. You can also check out our solar learning center cost-benefit page to learn more about tax credits.
Another solution is energy management. There are several simple steps you can take to reduce your energy consumption, including replacing incandescent light bulbs for LED alternatives.