Time-of-Use (TOU) rates
For Xcel Energy customers, understanding TOU rates and adopting solar energy can significantly impact their electricity bills. TOU rates encourage customers to shift their electricity usage away from peak hours, reducing strain on the grid and potentially lowering their overall energy costs. Although the off-peak hours are considerably lower at $0.12/kWh than the Residential opt-out at $0.13/kWh (Winter) and Residential opt-out at $0.14/kWh (Summer). The On-Peak is $0.19/kWh (Winter) which is 58% higher than the Residential opt-out at $0.13/kWh (Winter) and the On-Peak is $0.29/kWh (Summer) is 107% higher than Residential opt-out at $0.14/kWh (Summer)!
Solar Energy Is a Game-Changer when banking with Time-of-Use Rate
Solar power emerges as a compelling solution to mitigate the impact of TOU rates and lower electricity bills. By harnessing the sun's energy to generate electricity, homeowners can reduce their reliance on traditional grid-supplied electricity, particularly during peak hours. The key to understanding solar banking with Xcel Energy’s Time-of-Use Rate is that the credits are now banked at retail dollar amounts. When generating the electricity during off-peak the dollar amount is the retail rate for off-peak hours and that credit during off-peak hours can only be used to offset off-peak consumption hours. However, the credits banked during mid-peak and on-peak periods can be used to pay for mid-peak and off-peak! That lines up fairly well with the overall productivity of the solar energy system.
Continuous rollover vs waive decision to annual payout
Xcel Energy offers two options for net-metered solar customers to manage their excess solar energy:
Option A: Continuous Rollover Credits
Under this option, excess solar energy is credited to a virtual Solar Bank and monetized based on the time of generation according to the TOU rate. These credits can be used to offset electricity charges throughout the year. This option is ideal for customers who want to maximize their savings by utilizing solar energy during peak hours.
Option B: Waive Decision
With this option, excess solar energy is stored in the "net generation by customer" line of the bill and rolled over month to month and any excess is paid out at the end of the calendar year at the "average hourly incremental cost of energy" (AHIC) rate. Which fluctuates from $0.01/kWh to $0.03/kWh. The Levelized Cost of Solar during the warranty period is $0.06/kWh. So, this is a bad deal.
Go Green Electric & Solar strongly recommends Option A: Continuous Rollover Credits so you bank your energy at retail rates instead of the lower wholesale rates
Solar energy offers significant advantages for Xcel Energy customers:
Reduced Electricity Bills: Solar power can directly lower electricity bills by offsetting traditional grid-supplied electricity consumption.
Peak Shaving: Solar energy generation during peak hours helps reduce reliance on the grid, easing the strain on the system and potentially lowering overall energy costs.
Environmental Benefits: Solar energy is a clean and renewable source of electricity, contributing to a more sustainable energy future. As Xcel Energy continues to transition towards TOU pricing, solar energy becomes an increasingly attractive choice for homeowners seeking to manage their electricity costs and contribute to environmental sustainability. By harnessing the power of the sun, homeowners can take control of their energy consumption and enjoy the benefits of cleaner, more sustainable energy.
Contact our team at Go Green Electric today about how you can start to learn more about time-of-use (TOU) rates and how solar can benefit you. Call us for more information at (303) 731-5198 or Request a FREE quote