Path-Q Solar
What electricity price assumption should I use in a solar savings forecast?
Answer
Use the electricity prices that the system will actually offset, separated by time period, usage tier, and charge type where relevant. A credible forecast should use a current bill or tariff as the baseline and show a range of future price assumptions rather than relying on one escalation rate.
Key points
- Separate energy charges from fixed charges that solar will not reduce.
- Account for time-of-use periods, demand charges, minimum bills, and export compensation when they apply.
- Use conservative, expected, and high-price cases for future years.
- Avoid assuming every bill component rises or disappears at the same rate.
What it depends on
- Current utility tariff and rate structure
- Historical consumption and expected solar production by time of day
- Self-consumption, export rates, and battery operation
- Expected tariff changes and the forecast period
Risks and trade-offs
- Overstating future electricity-price growth can inflate projected savings.
- A rate that looks high on average may not apply to the hours when solar produces.
- Fixed charges or demand charges may limit bill reduction even with substantial generation.
Information you may need
- Recent electricity bills and applicable tariff
- Hourly or interval usage if available
- System production estimate and expected self-consumption
- Export compensation and any planned rate changes
Your next step
What to do next
Build the forecast from the applicable current tariff and recent bills, then rerun it with at least conservative, expected, and high-price scenarios.
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