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Electricity Price Increases and Your Utility Bill

by | March 21, 2023 | Economics

You’ve likely noticed that your monthly electricity bill seems to be getting higher and higher. And you’re right, prices have increased dramatically in recent years. But by how much? For residents of Northern Illinois with ComEd, it’s quite a bit. Let’s take a deeper dive.

Understanding your ComEd utility bill

There are many line-items on a ComEd bill that impact the price you pay for electricity each month. The unavoidable charges, made up of the Customer Charge and Standard Metering Charge, are required whether you have solar or not, and combined are typically around $14. Most of the other charges are based on your monthly electricity consumption in kilowatt-hours (kWh). There are a few taxes, too.  We call the sum of everything avoidable the avoidable cost of energy (“ACE”). This is what you can avoid paying with solar.

 

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Of course, the higher the ACE, the higher the incentive to avoid paying it. Because of this, going solar has never made so much sense to ComEd customers.

The rising cost of electricity

ComEd’s utility prices have skyrocketed over the past few years.  Based on our analysis of prices over the past five years, the price per kWh has risen an average of 5.8% a year, with most of that increase taking place in 2022 and 2023.

So what caused energy prices to soar? There were various factors, including Russia’s invasion of Ukraine in early 2022 and supply constraints resulting from COVID19. As a result, ComEd’s supply rates rose by 50% in the first half of 2022 alone.

But customers saw some relief. The Climate and Equitable Jobs Act offered a credit program meant to protect customers from high energy prices. Customers began to see a line item on their bills called the Carbon-Free Energy Resource Adjustment (CFRA) starting in June 2022. This meant that customers did not feel the full impact of ComEd’s increased costs over the previous year. However, the CFRA was designed to decrease substantially over time, and between May 2022 and March 2023, the credit was reduced from 4.3 cents/kWh to basically nothing. Customers’ bills increased around 24% during that time period.

On top of that, ComEd filed for an historic rate hike over four years beginning in 2024 to pay for investments in the grid. This means customers will see an additional increase of 18% by 2028.

Solar is a great hedge against increasing electricity prices

Solar has made financial sense for many homeowners in Illinois since the introduction of the state’s solar incentive program. And now, investing in solar just got a lot more compelling for ComEd customers. Let’s say we build a system that produces 10,000kWh/year on your roof. In February of 2023, that system would save you $1,394 per year in avoided electricity costs. Just one month later, your annual savings jumped to $1,592!. By 2028, that number will be over $1,800. Amid rising inflation and continued utility price increases, going solar – and stabilizing your electricity costs – is an easy choice.

Are you curious about how much you can save by going solar? Contact us using our form below to speak with one of our expert consultants.

This post was written by Marni Berliner.
Marni is Certasun's Director of Sales.

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