A year ago, energy provider, Salt River Project, made changes to its monthly billing system to reflect changes in energy distribution. While many in the renewable energy community have complained about what they feel is an unfair rise in their prices, SRP’s new model has been shown to support new energies while balancing pricing for customers across the spectrum of energy.
SRP has taken on the “Demand Charges” model, rather than the net metering approach which would charge customers solely on the amount of energy used. While net metering works if all customers are using electricity in the same way, SRP recognizes an unfair advantage for those using solar panels.
While those using solar may use as much energy as those using traditional methods, solar customers can store up extra energy, sell it back to the utility company, and end up with a far lower cost than someone using the same amount of energy. Since most solar customers are in a higher income bracket, this means that customers with less money pay more in utilities. The more that the wealthy solar customers avoid paying, the higher the prices to cover costs for the utility companies, and the more that non-solar customers have to pay out in the net metering model.
Demand Charges reflect the approach of any internet provider. If you want faster download speed, you pay more monthly. Demand Charges make it so that a solar customer pays based on the highest average of energy used during a given interval throughout the month. This means that, while solar customers can still offset their costs by selling energy back to SRP, they will have to pay a fair amount for the surges in power that they use when they plug into the grid during peak hours.
SRP and other Arizona companies hope that this method of price modeling will distribute cost more fairly to its customers and help them keep prices low while still inspiring people to invest in the renewable energy sources.