Posts Tagged ‘alternative energy’

21st April
written by simplelight

I frequently meet with the executives of alternative energy companies. Unfortunately, in most cases, the price of the electricity they’re generating is too high or the payback period for the required capital investment is too long.

In the past two years (April 2007 to March 2009) my wife and I have used 13,226 kwh at an average price of 13.3 cents per kwh (including all the taxes, distribution costs etc.). The total cost was $1,761 which amounts to $2.42 per day. We are fairly efficient and only use about 18.2 kwh per day which, according to PG&E, is a lot lower than average.

Nevertheless, it is hard to contemplate spending $10-20k to install any type of edge electricity generation when we can so easily pull it off the grid.

California, though, has a tiered rate system. Similar to tax rates, the more electricity you consume the higher your rate per kwh. The following are the approximate rates in California as of today.

  • Baseline
  • Tier 2 (up to 130% of baseline) — 13 cents per kwh
  • Tier 3 (up to 200% of baseline) — 21 cents per kwh
  • Tier 4 (up to 300% of baseline) — 37 cents per kwh
  • Tier 5 (over 300% of baseline) — 44 cents per kwh

The baseline rate varies by geography and season but is priced around 11.5 cents per kwh and includes about 23 kwh per day currently.

If you are consuming enough electricity to be hitting tiers 4 and 5 then it begins to make sense to install solar panels or fuel cells such as those provided by ClearEdge Power.