The Definitive Guide on Electric Utility Bill Inflation in California over the Last Decade
Utilizing representative utility bill cost inflation data is critical for determining the economics of a behind-the-meter (BTM) solar + storage project. The annualized ‘utility rate inflation’ input is one of the most influential assumptions in the financial model when determining the lifetime economics of a project. Given that rate inflation compounds over time and financial models are typically run over a 25+ year period, the input will materially influence the payback period, return on investment, and net present value. The solar industry lacks standardization when it comes to this critical input. It is not uncommon for a homeowner soliciting solar proposals from several installation companies to receive widely varying assumptions on the inflation rate.