There are various data points on the Internet that say historically, California has seen around a 6% annual increase. Southern California Edison says the true number is 3% per year, on average. On the other hand, we have seen some installers using figures as high as 11%. That's a pretty broad range, but what exactly is the "true" number?
Clearly, if California saw 11% annual increase for 25 years, businesses would close their doors. (Although some would argue they already are). Even 6%, which is the average of all sources polled, is not sustainable as a forecast even for the biggest companies.
Having said that, a very interesting article caught my eye while reading the UK's Daily Telegraph (10/18/11). It stated that bills for electricity rose an average of 18.3% this year for the UK alone! Remember their annual inflation is 5.2%. That's a pretty staggering increase during an already struggling world economy.
What does all of this mean for California and the future of solar installations in Los Angeles compared to other utility options? It's clearly not good for traditional energy utility services. There model is perhaps, broken beyond repair. Obviously you cannot rule out one-off steep increases- that is, our utilities need to increase their rates to cover infrastructure repair and other costs. However, if you need to put 6-10% increase into your spread sheet to make the numbers work, maybe you are trying to fit a round peg into a square hole...
One thing is for certain though, while the price points of other energy sources continue to climb, solar energy in the South Bay only gets cheaper. Undoubtably, this trend will continue as solar panel manufacturers improve on the efficiency of their products.
While green energy systems are a relative newcomer in the utility field, they continue to grow as other energy providers, who have had decades longer to work out their business models, continue to struggle.
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