The Truth About Utility Company Connection Fees

The Truth About Connection Fees

 
At Shine Solar, we like to take an educational approach with everything we do.  We do this for two reasons: because we prefer telling the truth, and because solar is still a pretty new concept in the Midwest. People don’t realize how affordable solar energy has become. Most don’t know how much money they can save month to month. And we get that! When you haven’t heard much about solar, it can sound too good to be true. It makes sense to hear about instant savings and react with disbelief. People want proof of savings that large. This is why we regularly post videos showing actual electric bills from our customers, or focusing on the affordability of solar. The response to these videos, though, isn’t always positive. “Stop lying! That’s not true!” is a frequent comment on our Facebook page. But here’s the thing: it does us no good to lie to people at any point in the solar education process. The truth is great enough. Untruths have no place in our company. Case in point: our video displaying three consecutive $15 electric bills, sent in by one of our customers. The reason this customer’s bill is a flat $15 per month is because that is the utility company’s “connection fee.”

The Truth About Connection Fees

Customers who choose to go solar usually remain connected to the utility provider’s grid. To go off-grid entails a battery backup, which is just not cost-effective. Through a process called net metering, the utility companies monitor what you’re producing in addition to what you’re pulling from the grid. Credits are generated at wholesale rates and applied to your account. You can build up credits from your panel production to offset your regular bill.  Regardless of credits, though, your utility company will still continue to charge you a monthly fee to remain tied to the grid. The grid acts as a cost-effective battery backup. The truth is, all utilities don’t charge the same connection fee, because each company has different fixed costs in place based on its expenses. Unfortunately, those connection fees (or price per kWh, or seasonal adjustments, or fuel surcharges) can be increased at any time if the utility’s expenses increase. Co-op customers generally have the highest connection fees, so those customers often see $25 or $30 per month connection fees…or higher. And it is this very price uncertainty that has led millions of people to choose solar power. The sun continues to provide a free source of energy. Solar panels continue to drop in price (80% since 2008!). And, the best news of all, solar payments don’t randomly increase. Solar payments remain the same price.  Once energy storage options become more and more available, separating from the utility grid will make far more sense financially. Why deal with the uncertainty? Call us for a free solar analysis today!  

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