Most solar installers assume a 6.7% annual increase in Dominion electric rates over time. Go Simple Energy uses 5.0%. Here’s Why.
Over the past 10 years, annual Dominion electric rate increase has tapered from the traditionally accepted 6.7% annual rise. Using documented Dominion data available to the public, Go Simple Energy determined the percent increase of rates in each tier over the past 10 years. This increase has been most prevalent in the higher cost Tier 3 and Tier 4 rates. Because most Go Simple Energy clients incur most of their excessive charges from these higher rates, we have calculated a weighted average annual rate increase of 5.0%.
How does this affect your proposal?
We use this accurate, relevant information in our proposal process because the percent rate increase is a crucial element in determining long-term savings and other financial return information for your project. Using a decreased number slightly lengthens proposed payback period and minutely decreases the Investment Rate of Return (IRR) associated with your project, among other things. While other solar installers are inflating your expected returns, Go Simple Energy strives to provide the most accurate, honest, up to date information in all aspects of our business so that you are satisfied with the long term results of your solar installation.
Looking into the Future
In late 2008, the Virginia State Corporation Commission approved rate hikes, the most significant jump in the region’s electricity bills in more than a decade. Dominion raised its fuel rate to 3.893 cents per kilowatt-hour, up from 2.232 cents. For residential customers using 1,000 kilowatt-hours of electricity per month, bills will rose by $16.61, or about 18 percent . Some commercial customers began paying more than 40 percent more.
Nearly all ratepayers are currently paying greater than 50% more for the same amount of electricity in 2016 compared to 2008. This rate of increase is expected to continue into the future and is visualized by the chart below. This “Cost of Doing Nothing” chart is generated in our proposal with information corresponding to your specific project.