Had a look at your PG&E bill lately?
Look a little closer if you are suprised.
There is a page on each bill that looks like this:
As you exceed the baseline quantities assigned to your area the rate increases. Notice how the Tier 5 rate is 3 times as high as the baseline rate. This is where your money is going. If you are into tiers 4 & 5 solar is a feasable option for you. Eliminating the higher tiers will pay for the cost of solar quickly and save the anguish of opening your bill every month.
The costs of energy have leveled since this graph was done. But, notice how the cost from 2004 to 2006 increased. This can happen at any time. There are bills going through our State Assembly that will increase the cost for electricity.
It is a good practice to size solar systems to eliminate Tiers 4 & 5 and make a dent into Tier 3 if possible. Tier 3 is almost twice the baseline cost, but still not a lot of money. It is Tiers 4 & 5 that will pay for your system. Sizing systems to “eliminate your bill” as advertised by some companies is more of an emotional response than a logical one.
Here is a spreadsheet for comparing PG&E costs vs Solar system costs over the life of the system (25 years). All calculations are at current rates and billing structure. It is important to accumulate 12 months of bills to input to include all seasons and usage to average over the year. When a grid tie system is installed PG&E changes your bills to a yearly rather than monthly billing. This allows the solar credits to average themselves out over the year.
There are many variables in a solar installation that will have an effect on the power it produces. This spreadsheet gives a starting point. If the numbers look good then a site visit from a solar installer will determine the cost to produce the necessary KW to offset your bill. A site visit will reveal the best location for your system as well as any obstacles in the way (trees, etc.)