California Electricity Prices are Soaring – How to Lock in Your Rates with Solar Plus Storage


Electricity prices for PG&E customers have increased by double digits this year, and the utility is proposing another major spike. Here’s what you can do to control surging costs.

From groceries to gasoline, so many things cost more in California. Residents throughout the Golden State are used to high utility prices, but customers in PG&E’s service territory are facing a series of increases that warrant more than a wince.  

As the ball dropped at midnight, PG&E customers began paying more to keep the lights on as they cleaned up empty champagne glasses and celebrated the kickoff to 2022. The first electricity spike, averaging 8%, took effect on January 1, followed by another 9%+ increase on March 1.* That’s nearly a 20% bump in electricity bills in the first three months of the year. Ouch. 

It’s not getting any cheaper to live in California. So, what can be done to ease the financial stress of PG&E price increases? Many homeowners are turning to rooftop solar to find relief.

Why is Electricity so Expensive in California?

Before we shed light on how residential solar in California can help you lock in your energy costs, it’s important to understand why electricity is so expensive in California. In truth, there’s no single factor to blame. It’s a mix of many circumstances, such as pressure to achieve the state’s climate action goals, rising commodity prices, increasing wildfire mitigation costs, investments for transmission and distribution and — more recently — the escalating price of natural gas.  

Together, these factors are forcing Californians to pay two-to-three times more for electricity than it costs to provide it, leaving PG&E customers to pay about 80% more for electricity than the national average.* Let that sink in. Although electricity costs are escalating across the U.S., California ratepayers are feeling the pinch more than those in other states because their prices are so high initially.    


What to Expect with PG&E’s Price Increases in 2022

As if two rate increases before the spring equinox weren’t enough, PG&E’s 19 million ratepayers are now facing another, more significant spike. If approved, the rate hike — one of the biggest in PG&E’s history — would increase the cost of gas and electricity by 18% over the next four years. But that’s not all. The proposed spike doesn’t take into account what some are calling the utility’s “moonshot” proposal to bury at least 10% of its 27,000 miles of above-ground lines in an effort to reduce wildfire danger — a move that would cost billions and billions of dollars.*

The Colorado Public Utilities Commission recognizes that these relentless rate increases make it tough for many families to survive. In fact, the CPUC has been holding meetings to brainstorm solutions, and is considering every idea from reducing utility investor profits to leveraging private investment to changing the rate structure entirely.*

But homeowners can only control what happens in their home — and solar electric systems offer a solution.  


How to Lock in Your California Electricity Prices with Solar

With electricity prices expected to continue their upward trajectory for years to come, the best way to protect yourself is to reduce the number of kilowatt-hours (kWh) you draw from the power grid. When you install residential solar in California, you’re harnessing the sun’s energy and converting it into power you can use at home. Therefore, the costs you avoid are actually the costs of grid-tied electricity that your solar panels replace.  

When you invest in a rooftop solar system, you’ll still get a bill from your utility for things like service charges and taxes. You’ll pay for any electricity you draw from the grid, but this should be significantly lower, and will depend on how much of your energy consumption you choose to offset. As a homeowner, you can reduce the amount of electricity you pull from the grid by adding battery backup. A solar battery lets you store and use the excess energy your panels produce at night or when the grid is down.    

You’ll also receive a bill from your solar service provider to pay for your California solar panels. If you’re a Sunnova solar customer, for instance, you’ll receive a monthly bill that covers your solar lease, loan or financing agreement, or power purchase agreement (PPA). This amount will be agreed upon before your system is installed, so you’ll know exactly what you’ll be paying — for 25 years.  

Therefore, as California electricity prices continue to increase, you can secure a predictable bill each month with solar, and forget about the array of factors that contribute to PG&E price increases.  

Sunnova Customer Stories

Hear Sunnova reviews from customers, in their own words, about their experience with Sunnova SunSafe® home solar and battery storage. For more information on Sunnova and the home energy services we offer click here.


How Much Can I Save with Residential Solar in California?

You might be wondering exactly how much you can save with residential solar in California. While the answer varies for each household, depending on electricity use, system size, and consumption habits, the Sunnova team sheds light on what the average customer in PG&E could save with solar, and solar plus storage.*

Without solar, the average PG&E customer can expect to pay between $150 and $350 per month, depending on usage. As the price of electricity increases, PG&E ratepayers could wind up paying more than $166,300 for electricity over the course of 25 years, according to industry estimates.* By going solar with Sunnova, you can take control over your energy costs by locking in your price of electricity through a fixed solar rate. Depending on what financing option you choose, you can pay the same monthly payment each year or opt for an escalator. Either way, you won’t have to worry about skyrocketing PG&E rates.   

A Sunnova solar customer who installs the average 7kW system can save between 30% and 35% on PG&E electricity in the first year alone. The cost of electricity from the grid in California’s largest utility territory is expected to increase 150% over the course of 25 years. By installing solar panels, even with the escalator, our customers are projected to save about 24% over the cost of PG&E electricity over 25 years.   

Homeowners who choose to store the energy their panels produce with solar battery backup may also save on their utility bills. While their monthly payment will be higher (as it accounts for the solar battery), the projected savings are more gradual – but they’ll likely result in a greater return. For instance, the average Sunnova customer who installs solar PV + storage can save an estimated 18.7% over their PG&E bill in the first year, and almost 30% in the first decade. At the 25-year mark, Sunnova customers may save more than 42% over their PG&E bill.


Is Solar Worth it in California?

A report by the CPUC in May of 2021 revealed that PG&E rates have gone up 37% since 2013 – faster than if they followed inflation.* By 2030, PG&E staff anticipate that their residential electricity rates will be 40% higher than if they had followed inflation. So, is solar worth it in California? If locking in your monthly energy costs over the next 25 years sounds like a better option than wincing each time you open your PG&E bill, California solar panels are absolutely worth the investment.  

And, if you buy your system outright or finance your solar panels with a loan, you can take advantage of the 26% federal tax credit, plus any applicable state and local solar rebates.  

By opting for solar today, you can protect yourself from PG&E price increases tomorrow — and for the foreseeable future. Click here to get started.  

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