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Reasons Why Time-Of-Use Pricing Method Will Increase Your Electricity Dues

Decades ago, electricity bills were easier to interpret. This was done by obtaining the magnitude of current used, multiplied by the prevailing cost per kilowatt-hour (kWh), in addition to other non-specific charges stress-free.

Recently, power companies like PG&E have made moves on changing the method of payment for electricity.  The costs of electricity production are higher when demand is high compared to times when demand is low. Take for instance, when most people leave their houses for work, there is low usage and electricity is cheaper than when they come back from work and switch on electrical gadgets. At these times, there is pressure on PG&E to produce more electricity thereby leading to increased energy costs.

This pattern has been seen repeatedly in California. Last year, the U.S. Energy Information Administration wrote an article stating how California’s energy costs have been on the rise yearly during times of increased demand per day.

An Hourly Breakdown of California’s Energy Price

The cost of electricity from 8 PM in 2016 per megawatt-hour was $35which increased to $60 in the subsequent year partly due to the high reliance of its energy companies on redeemable sources of energy like solar power. Of course, there was an obvious decrease in its production cost during times of low demand.

The major concern now is the mode of transformation of the energy market since putting more energy to use as at the time needed is costlier, thereby resulting in rapid increase in prices at both the early and late hours of the day; except for institutions who remit a constant price for electricity since there’s no way electricity providers can recover the costs incurred in rendering electrical services in times of very high demand excluding the general cost of electricity.

Hence, the reason core California power companies are currently introducing a new pricing method for electricity named “Time-of-Use”.

Energy Prices – Time-of-Use Pricing

Time-of-Use Pricing simply means you are charged according to when you utilize power either at home or for business.

Time-Of-Use (TOU) pricing segments hours of the day, with each time frame differing according to dead periods. As of April 2018, PG&E mapped out its plan (applying E-TOU-A) thus:

This may look easy but for the fact that there is a slight change of plan from June to September, with a reduced rate of $0.32 and a high rate of $0.40, while between October and May, the reduced rate is $0.27 when the inflated rate is $0.28. So, seasonal variations also determine prices PG&E customers pay.

The majority of energy users are often faced with the sudden inflated bills of the time-of-use pricing method.

High costs of TOU pricing compared to the traditional or basic method is the main concern. Looking at the basic plan, for instance, the normal prevailing price is $0.21 per kWh, which is lesser than the lowest pricing TOU rate by 6 cents and summertime high rates by 11 cents.

Energy users should be ready for a costlier and flexible pricing system as the time-of-use method is now the standard being set (by PG&E as from 2020).

PG&E is now using TOU instead of the traditional rate. Just like every other working class individual, the house owner is absent from home during early bright hours of the day and comes home every evening except for weekends. This means 70% or 700kWh of energy consumed in May during zenith costs periods (3am-8pm on workdays) and 30% or 300kWh during idle days.

Considering this, their bill would amount to $377 this May which reflects an increase of 78% more than the amount usually paid using the previous pricing system. This should show you a glimpse of what residents in California will experience when TOU is standardized.

The news is that these high costs are just going to increase. House owners have overlooked the fact that the difference between the zenith and off-zenith costs has been on the increase in the last ten years. As PG&E is implementing the TOU pricing in recent years, analyses of PG&E pricing rates have shown that there is an increasing gap between zenith and off-zenith costs. Between June and July 2013 during summer, commercial zenith and off-zenith costs recorded a difference of 3 cents; during the same time in 2014, it became 3.5 cents. Recently, the difference is over 5 cents.

The pattern is very obvious. With the passage of time, the probability of an increase in the difference between zenith and off-zenith costs is high. Energy will become more unaffordable as at the times itis most needed.

California residents and the entire United States will now have to adjust their ways of life to a larger extent so as to put up with this experience. The way you use your electrical equipment at home will be greatly reduced so as to conserve energy. Otherwise, you would have no choice than to pay up the charges.

Increasing Energy Prices – Is There Another Way Out?

A rising proportion of California house owners have started installing solar power systems on their rooftops so as to relinquish dependence on local power utilities. Following the uncontrollable increase in energy prices, the period at which the calculated cost of obtaining a system will be at par with current electrical charges is rapidly approaching.

It is currently calculated that a typical house owner can save enough money (meant for electrical bills) to buy a solar power system between 5 to 7 years, determined by usage and normal charges. Energy prices are on the high side and increasing daily. Therefore, the above stipulated time frame is expected to decrease. This is why we advise house owners to consider installing solar power. This way, you are exempted from financial pains.

Lastly, we suggest storage batteries for a more dynamic and efficient system for both new and old methods which in turn increases your savings.

What is The Difference Between Micro-Inverters and String Inverters?

  • What is a Micro-Inverter – a micro-inverter can also be referred to as a solar micro inverter. It is a piece of electronic equipment used in PV cells for changing the waveform of current i.e. changing Direct current (DC) to Alternating current (AC).
  • What is a String Inverter? – String inverters can also be referred to as centralized inverters. It also converts Direct current (DC) to Alternating current (AC) but here the inverter is connected to a string of solar panels.

When a micro-inverter is better than string inverters

  • Easy to install and use
  1. You don’t need an expert to install it for you. Micro-inverters can be easily set-up by you thereby saving you the cost of paying experts to do it for you.
  2. It does not require any additional hardware or manual configuration. It is Plug-and-play for the most part.
  3. Micro-inverters are connected to an AC source carrying normal household voltages. Whereas, central inverters demands connecting multiple strings of thick DC wires from the solar panels to the central inverter through a tunnel.
  4. The installations of central-inverters demand 4-8 categories of high voltage DC wires which need to be connected correctly to the inverter.
  5. In the installations of string-inverters, the installer has to calculate line losses to determine the size of the wire that will be required to connect it to the panels. Also, the panels, central inverters, and the racking all require different grounding system.
  6. Even for the loading of the string-inverters, it requires that the person installing it design the system to be able to load balance each strand of panels.
  7. In a central-inverter, when a panel malfunctions, it is going to be hard to determine which panel exactly in the system is malfunctioning without testing each one of them with a micrometer.
  • Effectiveness
  1. Micro-inverters make the best use of the power output of each individual panel resulting in an additional power of 15% per panel.
  2. Central inverters will not function as it should if there is any shading whereas a micro inverter system will function optimally.
  3. If a panel malfunction in a micro-inverter system, it will not affect the whole system and the exact panel that is malfunctioning can be easily determined.
  • Safety
  1. Micro-inverters are safe to use, unlike string-inverters which expose the person installing it to hundreds of volts of unsafe DC power while micro-inverters do not.
  2. Micro-inverters are safe to handle as they do not produce power when they are not connected to your solar panels. On the other hand, a string inverter needs to be handled safely because they produce power as soon the panels are exposed to light.
  3. A string inverter can be wired incorrectly in a lot of ways which could lead to severe damage or even kill the installer.
  4. There is no way a micro inverter can be wired incorrectly because it is plug-and-play.
  • Durability and Cost Effectiveness.
  1. Micro-inverters last for a very long time having an average lifespan of about 32 years and also a longer warranty of 25 years whereas central inverters have a shorter lifespan and a shorter warranty period of 10-12 years.
  2. The cost of maintenance for a string inverter can be more as it will need replacement in 10-15 years.