Now is the time to switch to solar

June 7, 2012

Linda Tolliver Terry, Manager at Solar Works

In two weeks, most PG&E customers in California can expect to see a 10% increase in their gas and electricity bills. PG&E rates have increased an estimated 5% annually for the last ten years, so this latest increase is almost double the historical average.  PG&E uses a complex electrical rate plan with four tiers of billing. The plan charges progressively higher rates for each tier. Effective June 20th, PG&E will reduce rates for high-usage Tier 4 customers by 17.6%. For a typical customer in our area, the more electricity you use, the higher the rate you pay. A recent ruling by the California Public Utilities Commission (CPUC) seeks to narrow the gap between the low-usage and high-usage customers. To offset the reduction for the high-usage users, PG&E will be raising rates on most customers by roughly 10%.

Following the upcoming rate hike for most customers, PG&E will also be increasing rates by about 30% for their low-income users enrolled in the California Alternate Rates for Energy (CARE) program. PG&E will implement the rate increase on their low-income customers by creating a third Tier in the CARE program. According to PG&E’s website, rate increases for residents enrolled in the CARE program will not go into effect until November 1st. This increase is expected to upset many ratepayer and senior advocates.

“Many people at this point are choosing between paying for food, or paying for medicine. Any increase, even just a little bit, could be very harmful,” said Laurence Steinberg of the Berkeley Center for Independent Living. According to Katie Worth of the SF Examiner, many ratepayers and customer advocates have characterized the approved rate changes as effectively stealing from the poor to give to the rich. “We are supposed to be encouraging people to use less energy. We are supposed to be encouraging people to cut carbon emissions. You don’t do that by raising their rates for using less. You do that by rewarding them for using less,” said TURN Executive Director Mark Toney.

News of PG&E’s increase comes on the heels of the Federal Commerce Department’s recent proposal to levy a 30% tariff on Chinese made solar modules.  Over the past year and a half, module pricing hit record lows, driven by a flood of panels being shipped from China at rock bottom prices.  The practice spurred the US Commerce Department to accuse the Chinese of selling panels below production costs.  A small tariff was imposed in February, but the 30% tariff, to be ratified in the fall, is almost certain to cause the cost of all solar modules to increase.  After over a year of record low pricing on most modules, Solar Works has seen module prices begin to creep back up over the last month.  Additionally, we are anticipating a product shortage by 4th quarter of 2012 as contractors grab up modules in advance of pricing increases, the expiration of the federal bonus tax depreciation for businesses, and possibly the expiration of the CSI rebates.  The rebates, part of the California Solar Initiative that started in 2007 are in their final step and expected to expire by the end of the year.

In short, solar waters are choppy right now.  Solar Works is encouraging homeowners and business owners who are thinking about solar to move forward quickly in advance of the price increases and before the CSI rebate ends and federal tax incentives are reduced.  The good news is that right now, module pricing is still much lower than it was just 18 months ago and we’ve had an explosion in finance options in that same time frame.  Residential homeowners are able to take advantage of numerous attractive leases and Sonoma County residents and businesses can utilize the County’s ground breaking finance program SCEIP to finance their projects.  Solar Works is even able to offer leases to non-profit organizations for a short time.  There has simply never been a better time to switch to solar than right now.