Blog

Electricity rates on the rise

Electricity Rates On the Rise

July 26, 2022 By In News No Comments

Electricity rates have been on the rise across the globe for the past several years – China has experienced power outages to a point they couldn’t harvest their primary crops like soybeans; Europe has never-before-seen energy rates and rolling brown outs – all before the pandemic began.

Then the pandemic hit, and the issues with globalism stemming from manufacturing slowdowns, major shipping congestion, and constrained resources causing inflation, and further increasing electricity.

The demand for electricity is also increasing – at a rate not seen since the Industrial Revolution. Cars, semis, trains, and planes will soon be powered by electricity.

Electricity that is generated in centralized locations then traveling hundreds of miles, distributed on an energy grid that was built for uses in a more arcadia era. For all these reasons, electricity costs will continue to climb.

Natural Gas Futures are the strongest indicator of electricity rates because natural gas remains the generation source of electricity.

 

Rates have increased by 4.3% which marks the highest annual growth rate since 2008. The three primary causes for the increase in demand are: retiring coal plants, the conflict overseas and increased demand.

Less than 10 years ago 40% of electricity was produced through coal generation plants. Since then the country has begun to steadily retire these plants leaving that number at just 23% with more currently planned to retire.

Russia invading Ukraine further impacted the supply and demand of natural gas. Behind only the United States, Russia is the second largest natural gas producer in the world, coupled with the being the largest natural gas exporter and holding the highest number of natural gas reserves. As Europe shifts away from their dependence on Russia, US export prices for energy products like coal and natural gas increase.

 

Below are the current winter 2023 costs. Energy companies are buying power now to prepare for winter are buying for 30 cents per kwh in New England.

ISO-NE (ISO-New England) is the electric transmission source for the six New England states (Maine, Massachusetts, Connecticut, New Hampshire, Rhode Island and Vermont). ISO-NE prices have settled at through June 2022 and what prices are currently trading at for July 2022 and beyond. Below you can see the expected spikes seeing significantly higher rates than we have seen in previous years.

 

The next chart shows the future ISO-NE’s winter prices for 2023. The blue line-charting on the left axis- is the U.S. Natural Gas benchmark price (Henry Hub); the orange/white lines-charting on the right axis is Jan/Feb 2023 ISONE prices. These markets are heavily tied together, but even with the recent drop (relatively speaking) in Henry Hub prices, ISONE Winter 23 Prices have not only stayed flat, but they have still moved up despite the fall in Natural Gas.

 

PJM handles all of the electricity movement throughout all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Washington DC. Historical pricing here has also shown significant increases in pricing over the last several years.

 

The rate increases in the electricity industry are evident and undoubtedly on the rise. The best way to avoid these rate increases is by going solar. Going solar allows you to lock in a fixed rate for your electricity anticipating and counteracting the increase we will see for the foreseeable future. Reach out to us here at Genie Solar Energy today to go Solar

Recent Posts

Categories

Archives

Genie Energy Ltd., (NYSE: GNE, GNEPRA) is a global energy solutions company. We supply customers in the US and Europe with electricity, including electricity generated from renewable resources and with natural gas. Through Genie Solar Energy and Prism Solar, we design, construct and install commercial solar energy solutions. We provide commercial and industrial clients with energy brokerage and consultative services through our Diversegy brand.

Case Studies

  • Commercial Solar Case Study Property Management Company
    Wiley Property Management Case Study

    The installation of the solar array on the roof of storage facility is leveraging a limited regulation called “Group Hosting”. Group hosting is a method where a group of businesses or individuals share the installation and use of a larger solar array on a single property.

  • Bake Crafters Commercial Solar Case Study
    Bake Crafters Food Company

    Bake Crafters’ commercial solar array is a remarkable example of sustainability in action. With an output capacity of 800 kW and predictions of offsetting 770 metric tons of CO2 emissions.

  • Integra Commercial Solar Case Study
    Integra Biosciences

    Integra Biosciences’ Commercial Solar project achieves 22% IRR and aligns with the company’s global sustainability goals and commitments. The two installations total 572-kW and generate enough power to offset 844,000 kWh.

  • Commercial Solar Case Study - Kraft Power
    Commercial Solar Case Study – Kraft Power Power

    Kraft Power utilized American made solar panels to install a 57.5 kW system on their roof. The new rooftop solar system, will help Kraft Power offset 100% of the electricity usage every year.

Latest Posts

Testimonials

Convinced to go solar by the New Jersey incentives, PCS Wireless looked at several solar companies to provide the best overall value. Genie Solar was able to design a unique system to offset the largest portion of their electricity usage. Additionally, we combine it with an exclusive financial product which minimized the cash out of pocket and maximized the return on investment. The 494 kW system was constructed in minimal time, with no impact on the businesses operations.
PCS Wireless
A provider of engine-generator systems, Kraft Power was a pioneer of “Total Energy” (Combined Heat and Power). After seeing the financial and green benefits of solar at their headquarters in Massachusetts, Kraft wanted to capitalize on the lucrative state incentives in New Jersey at a distribution center. By installing a 57.5 kW system on the roof they were able to offset 100% of their electricity usage, take advantage of the Investment Tax Credit, accelerated depreciation, and collect revenue from the New Jersey SREC program. Genie Solar made it a smooth process and limited the need for internal resources to manage the project.
Kraft Power
A premier provider of water treatment in the New York and New Jersey area, Tower wanted to go solar to save money and generate clean energy. Upon reviewing the financial benefits available in New Jersey with the SREC program and the federal Investment Tax Credit, they wanted to safe harbor the project in 2019 and construct in 2020. Buying American Made panels was an important component of the project, and by utilizing their white roof, Genie Solar was able to leverage Prism Solar’s bifacial panels to minimize the square footage needed and maximize the electricity generated. Genie Solar helped them achieve all of their goals in an efficient manner with a 44.6 kW system.
Tower Water
Cardoza had both a showroom and a distribution center with exorbitant electricity costs in New Hampshire. As a legacy business, it was important to reduce costs and protect the business from increasing expenses prior to passing it on to the owner’s children. The show room’s roof and location made it a less than ideal location for solar; but the vast roof and direct sunlight on the distribution center could generate enough solar to power both facilities, plus the owner’s house. Leveraging New Hampshire’s group host program, Genie Solar built one 99.7 kW solar array to power all three locations. The owner is now considering converting more equipment to solar and building a second array.
Cardoza Flooring
A destination nursery in rural New Hampshire, HBTSR was a long standing customer of Genie Solar’s sister company, Diversegy. After helping the business reduce electricity expenses for the past number of years, HBTSR turned to Genie Solar to reduce their rising electricity expenses over the long run. “Between the federal and NH state incentives, I was paid $8,000 to install my solar array. On top of getting money back, I am going to realize over $300,000 in savings during the 25 year warranty period of the solar array.”
House By The Side of the Road