We hope you enjoy Part 2 of our "Solar Series". To view
Part 1: Decoding the Calculations, click here.
One of the most frequently asked questions regarding solar is: how do I determine the utility offset cost? The answer is simple: the generation rate (commodity price) plus a very specific portion of transmission and distribution (“poles and wires") costs found on the regulated side of a typical Eversource Rate 35 bill.
In this example case, the generation rate represents $.083 and the "poles and wires" charges represent $.01817.
In the above example, the items above the green line are the specific charges one can expect to be offset by each solar kilowatt-hour, which, it's important to note, are billed per kWh.
The charges with the red asterisk are demand charges, billed in kW. Reductions of these charges are virtually impossible to guarantee, although they are entirely possible to reduce. The best, most conservative estimates should only take kWh charges into account and treat any kW reduction as a bonus.
Remember: kW Demand charges are set as the utility records your peak energy use during a given month. This creates a challenge for solar because if the peak demand period occurs during a cloudy day, there will be little to no kW reduction. Typically, customers can expect an average kW reduction of 15-20%, but again, the realized benefit will be unpredictable.