Calculating Future Utility Costs with Seasonal Electricity Rates


| Reading time 1 minute

Genability has added forecasted seasonal rates to our Solar Savings calculations.  Not to be confused with utility rate inflation (we’ve got some upgrades coming in this area soon), forecasted seasonal rates allow you to use the most recent version of the tariff and maintain the seasonality embedded in frequently changing rates like Fuel Cost Adjustments.

To see how this affects savings calculations, let’s look at first year utility bills using three different methodologies for a typical residential solar customer in Boston:

TTM - Trailing 12 Months FTM - Forward 12 Month, no forecasts Switch FTM w/ forecasted rates
July 2013 $2,368 $2,521 $2,513
November 2013 $2,430 $2,507 $2,543
February 2014 $2,419 $2,758 $2,557

The TTM approach comes with the lowest costs of the three approaches, hardly a surprise considering it uses older versions of the rates.  The FTM approach better reflects what the customer will pay, unless you run you quote when there is a spike in prices (fuel costs were especially high this February).

The Switch method uses forecasts of frequently changing rates, so your forecasted utility costs mirror the rise and fall of prices throughout the year.  Thus, the Switch method incorporates the most recent information, but does not see every price spike as a trend.

This new method is the product of several months of analysis in which we reviewed over 100,000 rate changes over the past three years, and thousands more from historical EIA data.  Our research gives us confidence in using our rate forecasts to predict savings not just for the first year, but for the entire lifetime of the solar system.

When you present your customer savings for a 20-year lease or PPA, what you use to calculate the first year’s utility bill really matters.  A small difference in the 1st year assumptions can grow into a big discrepancy over the lifetime of the system.  By using forecasted rates, the Switch methodology is a clear upgrade on previous methods of calculating first year and lifetime savings.

Also in Products

Better Solar Enery Savings Estimates Using Hawaiian SunZones

By John Tucker | Mar 4, 2014

Solar is an attractive proposition in Hawaii, with great solar irradiance and high utility rates. 1 out of 4 homes in Hawaii has gone solar.  A home in Honolulu that uses 1,000 kWh/month and installs a 5...

Genability Releases Solar Savings Tools For PV Developers And Installers

By Eric Danziger | Jun 8, 2013

We are proud to release our Solar Savings product, Genability Switch into the universe. Genability Switch helps residential and commercial solar providers deliver precise Solar Avoided Cost Calculations to their customers.  This includes tools to analyze leads,...

Typical Electricity Usage Profiles for When You Do not Have Customer Usage Data

By Eric Danziger | Jun 7, 2013

We’ve released a new set of typical electricity usage profile data called Typicals.  If you’re working with customers to calculate energy savings and you “typically” ask for their usage data, Genability Typicals will be of some use...

Genablity Extends Electricity Rate Coverage to The Long Tail

By John Tucker | Apr 2, 2013

When we first started collecting electricity rates we went after the utilities and states with the most customers (California, New York, Florida, etc.).  To date, Genability has collected electricity rates that represent 88% of Residential customers and...