The Rising Cost of Electricity in California: Commercial Solar is the Answer

California businesses are grappling with an unprecedented surge in electricity prices, making energy a critical overhead cost for commercial operations. Over the past decade, utility rates have risen significantly, placing a strain on industries already dealing with inflation and rising operational expenses. Commercial electricity rates in California are among the highest in the nation, and the pace of these increases shows no signs of slowing.

This rising energy cost has also led to increased interest in evaluating the cost of solar panels in California as businesses explore sustainable alternatives to reduce expenses.

The trend isn’t just about inflation — it reflects systemic changes in the energy sector, including grid modernization, wildfire mitigation and electricity generation energy cost inflation.

Historically electricity costs double every 20 years, however since 2018 the cost increases are 10% or more depending on the utility company. This would see the electricity costs double every 8-10 years.

For business owners, this insidious rising operating cost increase erodes profit margin. Thankfully business owners can hedge against these costs and rethink their energy strategies through commercial solar systems. Enact Solar offers businesses and nonprofits customer commercial solar and energy storage solutions, designed on our award-winning software and tailored to our clients’ needs.

• Grid Upgrades: Utilities are investing billions in infrastructure to modernize the power grid and prevent outages.
• Wildfire Mitigation: Given California’s history of devastating wildfires, utility companies have implemented expensive fire prevention measures.
• Electricity Generation Cost Inflation: The electricity that is produced in California is created from various fuel sources, nuclear, natural gas and green sources. When the cost of making the fuel goes up, the cost of your electricity also rises. Aging nuclear facilities will soon have to be decommissioned and this load has to be replaced.

As electricity costs rise, commercial solar energy emerges as a sustainable and cost-effective solution for businesses. By generating power on-site, companies can hedge against future rate increases while reducing their carbon footprint. California’s sunny climate provides a unique advantage, enabling businesses to harness ample solar energy throughout the year.

Perhaps the only advantage of high electricity costs is how it makes solar a very attractive investment. After the tax benefits available to business owners, the payback is determined by the value of the electricity costs being offset. High electricity tariffs result in very aggressive solar cost recuperation and high returns on investment.

For many commercial entities, transitioning to solar isn’t just about cost savings — it’s a statement of environmental responsibility that resonates with stakeholders and customers alike.

PPAs allow companies to reduce their energy bills immediately without incurring capital expenses, making it an attractive option for those seeking immediate relief from high electricity costs.

Moreover, solar ownership enables businesses to capitalize on energy storage solutions, such as batteries, further increasing energy resilience and independence. For companies aiming for long-term growth and sustainability, solar ownership is a strategic investment.

California’s rising electricity costs are forcing businesses to reevaluate their energy strategies. Solar energy offers a sustainable and cost-effective solution, whether through ownership or innovative agreements like PPAs. By investing in solar, businesses can not only shield themselves from future rate hikes but also contribute to a greener future.

Reach out to Enact today to see if your property is qualified to take advantage of these benefits. Not every property is suitable for solar. Talk to an expert who can review and help you quickly understand how you can take advantage of this opportunity.

By adopting solar, California businesses can achieve cost savings, energy security and a competitive edge while contributing to a cleaner future

Commercial solar systems reduce electricity bills by generating clean energy onsite. With California’s high utility rates and ongoing price hikes, businesses can stabilize energy costs and achieve long-term savings. Solar power also reduces reliance on the grid, offering protection against future rate increases.

By pairing solar with energy storage, businesses can maintain operations during grid outages. This is especially critical in California, where power disruptions caused by extreme weather or wildfire-related shutdowns are common.

Adopting solar demonstrates a commitment to sustainability and reducing carbon emissions. This appeals to eco-conscious customers, employees and stakeholders, enhancing brand reputation and corporate social responsibility.

Enact helps businesses of all types transition to clean energy with tailored solar and energy storage solutions. Our mission is to simplify the solar journey with end-to-end services, from design to installation and monitoring.

Commercial projects are unique and our energy advisors leverage Enact’s design software to create solutions specific to your energy needs.

Getting started is easy — schedule a free consultation with our team. Share your business’s name, address and electricity data (such as your latest bill) and our team will develop a proposal outlining your system design, performance estimates and projected savings.

Visit our website to learn how Enact can help your business save with solar.