How to lock in your energy costs for future generations
by Betsy Surver, Solar Energy Consultant
Energy costs are rising and analysts agree that trend will continue for the foreseeable future. But you can’t simply use less energy in the world we live in today – that would mean going without a lot of necessities like cooking, air conditioning, watching TV, and having that little nightlight on all night. How are you going to charge your car to get to work, or air fry your bacon in the morning? The point is, energy is a necessity, and you will keep using it no matter what the price is. But you don’t have to be completely dependent on your energy company’s whims for how much they want to charge you per kilowatt hour (kWh). If you produce your own energy, you can take back that power from the energy company and EARN the same rate that others pay for energy, on anything that you overproduce. This means you can flip the narrative in your favor so that rising energy prices are a good thing for you – because you’ll make more off of your extra energy.
You have two choices: continue to rent power from the energy company in your area (they have a monopoly over your power supply), OR you can produce your own power and lock in your energy costs for life. If you can get your solar system to produce at least as much energy as you use, you may never have to pay an energy bill to your energy company again.
If your power costs $180 per month, in 8 years that bill will increase about $250 per month at a 5% increase in energy costs per year. If energy costs rise at 10% per year, it only takes 4.5 years to get to $250 per month in bills. What if you get solar financed using the panels as collateral? You start out paying slightly higher bills, about $250 per month before incentives, but after a few years, this looks like a better and better deal as energy costs rise and your cost stays the same. After 8 years with 5% annual increase in energy costs, you would be paying less for energy than you were before. After 20 years, you would be paying the same amount ($250 per month) while energy costs will increase to a staggering $1,051 per month if costs rose by 10%, or $440 if costs only increased by 5% per year. After 30 years, the results are even more shocking – you would have no bill (assuming you chose a 25-year financing option). Without solar, you will pay $711 on energy per month (at a 5% annual energy cost increase).
Graph 1: Energy costs rising at 5% per year
Graph 2: Energy costs rising at 10% per year
If you could go back in time and pre-buy some of the commodities that we have seen increase at crazy rates, wouldn’t you? In 2002, gas prices were $1.32 per gallon ($2.19 in today’s dollars). Just 20 years later in 2022, the average gas prices in the US were $4.90. If you could have prebought gas at 2010’s rate in 2002, it would have still made sense, knowing what we know now about what gas prices have done. Essentially what you are doing when you install solar on your home is you are pre-buying your energy for the next 30+ years, all at once if you pay cash, or over the course of 25 (or less) years if you finance.
Do yourself and your family a favor and buy your energy before prices go through the roof, and let your roof make you some money by oversizing the system and producing more electricity than you use!
Betsy Surver is an Energy Consultant at iSolar. A graduate of NDSU in Industrial Engineering and Management, she is passionate about the environment and saving money. At home, Betsy enjoys spending time with her many cats and watching dystopian shows and movies.