Technical Assistance

Why Your Utility Bill Is So High (And What to Do About It)

It’s wintertime, and let’s face it: Your utility bill is going to be high this time of year. Even so, you might still be frustrated with your utility company when you get a bill that’s three or four times higher than normal. But before you call up your provider and give them a piece of your mind, see if this scenario sounds familiar.

OK, so you just checked the thermostat. It’s 12 degrees outside. Twelve! Meanwhile, you’re freezing inside your house because you’ve lowered your thermostat all the way to 66. You’re covered with blankets. You’re doing your best to save energy and… your bill is still crazy high.

Right, we get it. Us too. First things first: No, your utility company hasn’t raised their rates very suddenly. But yes, you should still call them and raise some hell.

We’ll get to why later. In the meantime, let’s go over a few of the many reasons your bill is so insane right now.

Related: How to Read Your Utility Bill.

 

Baby It’s Cold Outside!

Duh. It’s cold. Very cold, even here in Alabama. But what does that mean for you?

All houses have leakage points. Some houses are worse than others. Some, especially older homes, leak LOTS of that precious warm air during the wintertime. That’s a bad thing.

If possible, try to add some insulation to your house. Here’s a handy guide from Energy.gov. While you’re at it, seal off any leaky ductwork. (Yeah, that will involve venturing into the crawl space. Yeah, it’s a bit creepy down there. The good news is, you can hire someone to do it!)

Anywhere you’re losing heated air to the outside, it’s costing you a lot of money. And the colder it is outside, the problem gets exponentially worse. So get it fixed. Fortunately, these are pretty cheap and easy jobs. You’ll make your money back quickly. (When we say quickly, we mean within 2 years.)

 

Auxiliary Heat Mode and Your Utility Bill

Pop quiz time. Do you know how your heating system works? Do you know what a heat pump is? Is it running on auxiliary mode?

If you said ‘no’ to any of those questions, we have good news and bad news. The good news is that you don’t have to know exactly how your system works. If you’re curious, there are loads of YouTube videos that can give you a crash course. The bad news is that, if your heat pump is running on auxiliary mode (or aux heat), that’s gonna cost you some serious dough.

When the temperature outside reaches a certain point (around the freezing point), your thermostat will automatically turn on auxiliary mode. This turns on electric heat strips for additional heat. It’s kinda like blasting your oven on high. All through your house.

That’s understandable when it’s really, really cold outside. You gotta stay warm. Just make sure the auxiliary heat (or emergency heat) setting isn’t always on. You also want your heat pump to keep working even while the auxiliary heat is on. To do this, have a professional come out twice a year to check that your HVAC is in working order.

If you’re not having regular maintenance completed by a certified technician, chances are your equipment may not be working as designed. And here’s the problem: You may not even know! Just because it’s warm inside your house doesn’t mean the system is really working the right way. Remember that high bill?

Unfortunately, this might be a somewhat pricey fix if something is wrong. But in the long run, fixing the problem is better than overpaying every single month.

So Can I Still Give Someone a Piece of My Mind?

Yes! It’s true that your utility company didn’t suddenly change your rates. However, their rate structure is set up in a way that penalizes you when things get rough.

Wouldn’t it be nice if your utility company offered a slightly lower rate at times when it’s especially hot or cold outside? That would obviously help lots of customers who feel the pinch this time of year. Then, when the temperature is milder, they could charge a higher rate to make up for it. We think everybody would benefit in this scenario. Your utility MAY offer budget billing and if so, you should check out that option.

Another option would be for utility companies to invest in energy efficiency programs that help real people. Wouldn’t it be nice if your provider offered a program to make your home more energy efficient so you could fix all the problems we listed above? We think so, too. Then you wouldn’t need special rates and billing processes.

They know these problems are out there. But these types of programs are few and far between in Alabama. So call your utility company, city council, the board of directors, and/or the Alabama Public Service Commission. Let them know how you feel. You might just make a difference for yourself and your community. 

So Who Exactly Do I Call?

That depends on where you live in Alabama.

North Alabama (serviced by TVA)

  • Call your local utility, who buys from TVA. This is usually a municipal utility, like Huntsville Utilities, or an electric cooperative, like Joe Wheeler EMC
  • If you have a municipal utility, call your city council and mayor. They ultimately control the utility.
  • If you have an electric cooperative, call your board of directors. This information can be found on their website.

Central Alabama (serviced by Alabama Power)

  • Call Alabama Power
    • 1-800-245-2244
  • Call the Alabama Public Service Commission
    • 1-800-392-8050

South Alabama (serviced by PowerSouth)

  • Call PowerSouth
    • 334-427-3000
  • If you have a municipal utility, call your city council and mayor. They ultimately control the utility.
  • If you have an electric cooperative, call your board of directors. This information can be found on their website.

 

 

Madison schools join the North Alabama Buildings Performance Challenge

MADISON, Ala. –  The Madison City Schools system is saving hundreds of thousands of dollars by being more conservative when it comes to energy use.

Now, they are going head to head with other businesses and organizations around Madison County to see just how much they can save on energy.

“It’s a voluntary effort where organizations and businesses from around north Alabama are committing to energy efficiency,” said Daniel Tait, CEO of Energy Alabama.

To continue reading the full article, please visit: http://whnt.com/2017/10/07/madison-schools-join-the-north-alabama-buildings-performance-challenge/

Solar Shingles, Are They Really Worth It?

Photo courtesy of Tesla

Tesla has done it again. The sexy, cutting-edge, tech company has come out with a product called Solar Tiles, also known as Solar Shingles. This revolutionary product will pave the way for sustainable energy to become the next home-design trend. The 8.65”x14” tiles currently come in two different styles, textured and smooth; the website also shows the two new designs being released next year. How does it work? Glad you asked… The solar tiles are strategically placed all over a home’s roof to maximize sun exposure. The light from the sun is converted into power that is then transported into a Powerwall, or assumedly any other battery system, where the surplus energy is stored. The energy is stored in the Powerwall to guarantee uninterrupted electricity even during bad weather.

Photo courtesy of Tesla

The nice thing about Tesla is that their website allows you to input your address, square-footage, and current electricity bill amount. They use all that information to calculate the percentage of solar tiles you would need, how much it will cost (whether you pay for it all upfront or you finance it), and how much it will save you per month and over the period of 30 years. Now, you may be wondering, “if I only need 40% of my roof covered in solar tiles won’t you be able to notice a difference in tiles?” Tesla has already thought of that. The roof will be made with the same style as whatever tile you select and the remaining 60% of the roof would be covered in tempered glass tiles. Now you’re also probably thinking, “glass tiles don’t sound like they have a long lifespan”. Once again, Tesla is one step ahead of us. These tiles come with a lifetime warranty, and they have proven to be 3 times stronger than standard glass tiles. Tesla’s website has a video of a 2-inch hailstone being thrown at the tiles at 100mph, the other tiles break instantly and the Solar Tile is completely unharmed.

Photo courtesy of Tesla

Now, as all Tesla products are pricey, this one is no different. I can use my home as an example. It’s 2 stories, 3,500 square feet, 5,000 roof square footage, and has an average electricity bill of $280. The overall price for my home would be $132,500, which includes 3 Powerwalls installed in my home and 50% of my roof covered in solar tiles. However, Tesla has it set up to where, not only do you receive a tax credit, but you can finance through your monthly home mortgage payment. For my house, I would receive a $36,900 tax credit and $490 monthly loan payment. If you’re depressed because of the sticker price, I’ll share with you the calculator’s savings estimation. I would save $259 a month over 30 years and $93,300 total for 30 years. Overall, I would most likely break even, considering the cost and the savings put together.

Compare that to a standard solar array, to completely offset my usage it would likely cost around $40,000 before tax incentives. Also keep in mind that because my usage is a little higher than average, I’m having to install a system that is a good bit larger than the average installation in North Alabama.

So, are Solar Tiles worth it? We’re voting no. But only for now. And only because of the price. If Tesla’s performance from the introduction of the Model S to the Model 3 is any indication, Solar Tiles could be a harbinger for much cheaper, mass market products.

The Importance of Reducing Solar Soft Costs

What are solar soft costs? Soft costs are any costs, fees, or taxes that are included with a product after material and labor. While solar energy is worthwhile, thanks to the long term savings and the benefits for the environment, many potential users are hesitant at first due to the initial cost. A significant portion of the heavy sticker price is the “extra” added when taking soft costs into account.

Solar is becoming more prevalent in America, and many users are beginning to see their investment come to fruition. Unfortunately, many potential users are halted before they get started; so let’s look at some of the soft costs and how they could be reduced.

Courtesy of U.S. Department of Energy

As the graph shows, a massive 64% of the cost of solar is due to soft costs. Costs like permitting fees, interconnection labor, installation labor, and installer profit are significant portions of the soft costs, but are also necessary. The solar system needs to be approved by the city (permitting fee), connected to the grid (interconnection labor), installed (installation labor), and the company selling it needs to make some profit to stay open and continue selling their product (installer profit). However, most of the other costs could be trimmed down so there isn’t as much of a cost for each one.

The other portions of soft cost: sales tax, transaction costs, supply chain costs, indirect corporate costs, and customer acquisition, CAN be reduced, sometimes to virtually nothing. Some states actually pay the solar user, through stipends or other incentives, to install rather than charge sales tax; therefore, sales tax could be done away with or reworked so the user gets that cost back. In fact, some states like Florida, do not charge sales tax on renewable energy, effectively eliminating this soft cost.

Transaction costs are costs that come from a third-party lender when the buyer needs a loan and could be reduced to a lower rate. We find that buyers need to be aware of the hidden fees and transactions costs that can quickly add significant cost to their installation. Some transaction costs are unavoidable and more than fair. After all, no one is going to loan you money at 0% interest. That being said, be aware of who is charging what fees and where they’re being charged in the process. Supply chain costs are from the transporting and housing of solar units from the company to the buyer. Better supply chain management and cooperative buying can help reduce this cost.

Lastly, and probably most interestingly, customer acquisition is the cost for the solar installer to reach out and connect its potential customers. This cost is effectively sales and marketing; and while it’s a necessary function, you can immediately see the issue. If hundreds of people contact their local solar installer only to be turned away because of bad site conditions, not being able to finance the system, or any number of reasons, the solar contractor has spent money on a customer that ultimately cannot buy its product. That means this cost must be charged to the next customer who CAN purchase the system. The U.S. Department of Energy and many startups around the country are developing tools explicitly designed to attack this problem. The more information at the fingertips of consumers and contractors helps reduce the amount of time spent on projects that just simply could never be built.

A good way to think of solar installation with lower soft costs is to merely look overseas. Germany is one example of solar installation working without high soft costs and their wide user base is proof it’s effective. By making solar more available (cheaper), Germany has a much bigger user base than the United States and they see more users every year. Although the process of buying solar is different in Germany, they immediately provide savings by getting rid of most soft costs from the start.

Let’s not handicap solar right out of the gate. By working to significantly reduce soft costs, we can make solar more affordable for everyday Alabamians. Quite literally, giving them the power back.

Perfect Utility Rate Design

The Ins and Outs of Electricity Rate Design

Electricity rate design has the power to completely alter the energy sector, for better or worse. The world of electricity rate design can be a confusing one, so before we get into which rate design would be most beneficial for you and the energy sector (that’s for a later blog post!), let us first define and explore three of the main types of rate designs.

Fixed Charges and Consumption Charges – The current system for billing electricity for most utilities across the country, this rate design charges fixed fees in tandem with a usage bill and is most common with residential consumers. Fixed charges never change from month to month (as the name implies), as they are there as a result of your connection to the grid. Recently, utility companies across the country have been advocating for significant fixed charge increases. In theory, a fixed charge is there to compensate the utility for the fixed portion of their costs as a result of having you as a customer (for instance, the cost to bill you and read your meter).

Related: Are fixed utility charges bad for consumers?

Time of Use – This system is decidedly more complicated than the previous one, and would require some work on the part of you, the consumer. The idea is simple: the cost of using electricity would change according to the time of day (for instance, customers would be charged higher rates for using electricity during specified peak demand times).

Figure 1: An example of a suggested TOU rate for summer months. Source: www.pge.com

The execution of Time of Use (TOU) rates (such as advocacy and ensuring customer understanding) is where the system becomes more complicated. States such as California and Massachusetts have already adopted a TOU rate design, and our own Tennessee Valley Authority has also proposed making the transition to TOU rates. Additionally, TOU rates are already available in most states on a voluntary basis. At its most basic, TOU rates provide price signals to customers to encourage them to use when rates are low and conserve when rates are high.

Related: 6 Reasons Why Time of Use Rates Are the Best Option

Peak Demand Charges – In many states and especially for commercial customers, electricity use is billed in two ways by the utility: based on consumption, that is, how much electricity you actually used in a given period, and peak demand, or the highest capacity required during that billing period. A simple way to think about this is with an analogy: the odometer in your car would represent the “consumption,” and the fastest speed you traveled during that period would be the “peak demand.” Your car needs to be able to last for a long time (high mileage) but also may need to go fast from time to time (of course, if you drive a Tesla Model S, that’s all the time! But we digress…). In the case of this electricity rate design, you would be charged for both consumption and peak demand, and oftentimes these two charges appear as one combined charge.

The main idea behind peak demand charges is that they provide customers with price signals to encourage them not to make large, instantaneous demands on the systems but instead to spread their usage out over the day more smoothly. Depending on the rate structure in a given area, and your habits, demand charges can constitute up to 30% of an electricity bill.

Related: Probing Residential Demand Charges