Electricity is an energy source that we use every day in our lives. We are required to have an electricity supply as a necessity for living. There are some places where electricity is not available for lack of a roof solar panel or wind turbine. These locations are known as off-grid or grid-based.
The amount of electricity you need will depend on what you need it for: people who use internet, DVD players, LCD televisions, and large appliances like washing machines and fridges can all benefit from a generator.
This article will go over some important reasons why electricity is expensive and how to reduce your bill by identifying need and cost properly.
What Are the Hidden Costs of Electricity?heimlyndo: When looking into how much money you spend on electricity alone, there are two significant questions that should be asked: 1) What’s the demand? 2) What’s the cost? When answering these questions accurately, you will find the cost of your power consumption to be high.
The cost of producing electricity
If we were to look at the cost of producing electricity from other sources, we would see a very different story. For example, solar power is pretty cheap per unit of energy.
The California Department of Oil and Gas Statistics shows that a non-solar home will cost you approximately $8 per day in electricity costs after you purchase your gas and electricity. This equals out to approximately $140 a month!
However, with the sale of a non-solar home in July 2017, you could have paid as little as $4 per day in electricity costs! That is $12 per month savings on your monthly bill.
Plus, with the emergence of non-solar homes being cheaper than standard home models being, the more expensive model market has been growing. Between 2016 and 2017, the number of models sold grew by roughly 30%.
Low-demand periods for generating power
Another factor that contributes to high electricity bills is the length of time it takes for electricity to be generated and distributed.
When the power company buys electricity from a solar or wind farm, for example, it has to wait for the energy to be processed and then distributed. This process can take several hours todays average internet connection speed!
While this delay is not always an issue during daytime hours, when there is no demand for power there are times when waiting can be a problem.
Many times this problem lies with periods of low demand. When there is no demand, the power company can sit back and wait for nothing to use before them. This can cost them more money in either overcharges or undercharges.
High-demand periods for generating power
There are several important periods in the life of an electronics user when electricity cost can be the biggest threat to financial well-being.
The first time you buy a new device or computer, it’s new so you have to install the latest software or update software and hardware. This software and hardware update cost money and usually requires a company promotional code.
The second time you purchase a device or computer, it’s new enough that people are reporting on how it works. Have you ever seen someone use one of these new devices? They look cute but who feels like they really understand what they’re doing with them?
These devices are expensive to start out because there are now companies that offer tutorials on how to use them.
While electricity is a long way away, the most important cost element for businesses looking to reduce your carbon footprint is in distributed energy resources (DER).
DER refers to all the various forms of power that are distributed throughout our community, such as plug-in carts at grocery store and retail stores, charging stations for cars at parking garages and public spots, and solar panels on homes.
Many of these DERs are expensive, either through direct funding or utility support. For example, installing a plug-in cart system requires both a hardware supply chain and utility support, typically through grants.
However, energy consumption estimates suggest that a few hundred plug-in carts could save around 6kWh per year in electricity consumption! That’s an annual savings of $6k worth of electricity.
As mentioned earlier, electricity is generally cheaper when used in large loads. This is due to larger electrical companies charging higher fees foropping off of promotion and premium services.
When you use a ton of electricity, the power companies have to charge you more! Unfortunately, this can be very expensive.
Another cost associated with electricity is the distribution cost. These are typically around 3–5 cents per kilowatt hour, depending on where you buy your energy. Many regions have them quite high due to local conditions or low generation.
Taxes make up a small portion of your electricity bill
While there are several factors that make electricity expensive, the main factors are large fossil fuel companies charging high fees for their products and large power companies restricting access to electricity by charging high fees for renewable energy or overall power purchase agreements.
Power purchasing agreements limit how much renewable energy a power plant can supply, making it costlier for smaller solar farms to be utilized. Similarly, restrictions on how much wind energy a power plant can have reduce the amount of wind energy available to the grid.
These restrictions also affect who has access to the grid. When large residential users cannot consume a lot of electricity, they reduce demand which reduces costs. When commercial users cannot use too much electricity, they don’t oversupply which reduces costs.
Rate increases are common but modest
In general, rate hikes are not very common. Most places experience steady growth in customer volumes and revenue so they can afford to raise rates.
In the U.S., residential electricity rates are about average year-round. The best time to buy electric is during summer months when outdoor water use is high due to seasonality of water use and season of usage.
Summer is a good time to buy electricity because most people use lights and appliances a few times a day, so there is little need for daily power consumption. This makes buying energy during summer months cheap as there is little movement of data or power consumed, both factors that can be expensive!
However, as we discuss in this article, price fluctuates with supply and demand which affects you as an individual buyer.
Save money by using less energy
There are several ways to save money by not using as much energy. For example, you can turn off lights when not in use and leave them on low so they do not power up.
You can also use less-expensive fans or open a window instead of a door. You can also lower the temperature of your room’s air by closing the windows or keeping them open for awhile before sleeping.
You can lower the thermostat in your home or avoid heating if you do not need heat. You can even reduce how much furniture you need in your home to accommodate for reduced heat consumption.
All of these things are great ways to save money! Try one or all of them out and see what effects they have on your budget.
Saving money does not have to come with energy bills, though.