Effective June 1, the Pennsylvania utility giant will raise its default residential electricity rate from 8.941 cents per kilowatt-hour to 12.366 cents. This latest rate hike comes on the heels of a previous 26% increase in December.
A lot of Pennsylvania residents are in for some serious sticker shock come July. One of the state’s biggest utility companies, Pennsylvania Light and Power (PPL) which serves over 2.5 million customers in the Keystone State, just announced a 38% hike in its default electricity rate.
Starting June 1, PPL customers will see the price of electricity increase from 8.941 cents per kilowatt-hour all the way up to 12.366 cents. To make matters worse, PPL’s residential customers had already been hit with a 26% price hike in December.
For perspective, PPL was only charging around 7.25 cents per kilowatt-hour in May 2021. So, the latest rate hike means that, in just one year, PPL’s residential customers have seen the cost of electricity soar by a jaw-dropping 70%.
Nor have businesses been spared. PPL’s small business customers will be hit with a lower but by no means negligible 20% price hike next month, when their rates rise from 9.675 cents per kilowatt-hour to 11.695 cents.
That amounts to a 75% increase since May 2021, when PPL’s small business rate was only 6.72 cents.
According to PPL’s regional affairs director, Maggie Sheely, the rate hikes are the result of “several ongoing market conditions that are impacting most sectors of the economy. These include the rising cost of energy supply sources, including natural gas, as well as overall inflation and other global economic events."
Since none of these inflationary factors are expected to ease up any time soon, expect the cost of electricity to keep skyrocketing for the foreseeable future. Meaning prices are likely to rise to more than double what they were just one year ago.
Of course, Pennsylvania residents and businesses who’ve already made the switch to solar power don’t have to worry about these or any other future price hikes. They’ve made themselves immune by essentially locking in a low electricity rate for the 25-to-30-year life of their panels.
By way of analogy, take your mind back to 1992 when Americans were paying an average of $1.13 for a gallon of gasoline. Suppose your local gas station had offered to let you prepay for 10,000 gallons back then at that price.
Assuming you knew you’d be using that much gas over the next couple of decades and had no doubts about your local station’s ability to keep supplying it, it would have been foolish not to take the deal given how much gas prices rose throughout the interim.
When you have a solar system installed, you’re essentially making the same deal by paying a lump sum upfront for all the electricity it generates throughout its 25-to-30-year lifetime.
Since the per-kilowatt-hour cost of energy generated by a rooftop solar system is typically less than even current utility rates, going solar will usually mean saving money even putting concerns about inflation aside. When you factor in the marked tendency of energy prices to increase over time, installing a solar system makes even more sense as a hedge against that ordinary run-of-the-mill inflation.
But, given the soaring electricity rates we’re now experiencing together with the near certainty that they’ll continue climbing for the foreseeable future, these days you’d almost have to be crazy not to look into going solar.