Trystan Casey
California residents spend about $260 per month on electricity, which is 5% higher than the national average. The average electric rates in California cost 30 ¢/kilowatt-hour (kWh), and the average electricity customer in California uses 870 kWh of electricity per month. However, there are ways to reduce your electric bill. For instance, California Alternative Rates for Energy (CARE) offers a monthly discount of 20-35% for electric bills for income-qualified utility and CCA customers. Additionally, you can save 5-15% on your electric bill by subscribing to a community solar farm.
| Characteristics | Values |
|---|---|
| Average monthly electric bill | $260/month |
| Average electric rate | 30 ¢/kilowatt-hour (kWh) |
| Average monthly consumption | 870 kWh |
| Average annual consumption | 10440 kWh |
| Average annual electric bill | $3,120 |
| Average annual increase in electricity prices | 5.9% |
| Savings from a solar panel system in the first year | $3,100 |
| Savings from a solar panel system over 20 years | $113,600 |
| Savings from subscribing to a community solar farm | 5-15% |
| Typical contract terms | Length, sign-up fee, early cancellation fees |
| Plan types | Time-of-use (TOU) plans, tiered rate plans |
| Discount programs | California Alternative Rates for Energy (CARE), Family Electric Rate Assistance (FERA), Medical Baseline Rate Program |
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What You'll Learn
Discounts and assistance programs
California has several programs in place to help low-income households access cheaper electricity.
California Alternate Rates for Energy (CARE)
The California Alternate Rates for Energy (CARE) program offers a minimum discount of 20% on electricity bills, with some electrical companies offering between 30% and 35% off. To be eligible, someone in your household must already participate in certain public assistance programs or meet the guidelines for total annual household income.
Family Electric Rate Assistance (FERA)
The FERA discount is available to customers of Southern California Edison, San Diego Gas and Electric Company, and Pacific Gas and Electric Company. FERA offers an 18% discount on electricity bills for households whose income slightly exceeds the CARE allowance.
Energy Savings Assistance Program (ESA)
ESA provides no-cost weatherization services for renters and homeowners who income-qualify for CARE. The services offered include energy-efficient refrigerators, energy-efficient furnaces, attic insulation, and low-flow showerheads, among others.
Medical Baseline Rate Program
The Medical Baseline Rate Program ensures a set amount of electricity at the lowest monthly discounted rate for residential customers with qualifying energy needs due to medical conditions.
Utility Company Emergency Assistance
Some electric utilities offer cash assistance and special payment plans to consumers facing financial hardship.
Energy plan considerations
When choosing an energy plan, it's important to consider factors such as the length of the contract, sign-up fees, early cancellation fees, and customer satisfaction. Most plans in California are time-of-use (TOU) plans, which means your per-kWh rate will depend on when you consume electricity. TOU plans might be best for you if you use most of your energy during off-peak hours. Many electric suppliers also use a tiered rate plan, which charges different prices per kWh based on your average monthly energy consumption.
California's energy deregulation means that homeowners can select providers based on their budgets and energy needs. However, this also means that choosing an electric supplier may take some thoughtful research.
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Time-of-use (TOU) plans
California's energy deregulation means that homeowners can choose their electricity provider based on their budget and energy needs. Most plans in California are Time-of-Use (TOU) plans, which means that the rate per kilowatt-hour (kWh) depends on when you consume electricity, i.e. the time of day and day of the week. TOU plans are best for those who use most of their energy during off-peak hours or can adjust their energy use habits to do so.
The peak and off-peak timelines can vary by electric utility, so it is important to check with your utility provider to see when your peak and off-peak hours are. TOU plans are often tiered, which means different prices per kWh based on average energy consumption. Those who use the average amount of energy will pay the least, while those who use well above or below the average of 572 kWh per month will pay more per kWh.
TOU plans can help you manage energy costs effectively. For example, Southern California Edison (SCE) offers a Time-of-Use rate plan with lower rates during off-peak hours, ideal for customers who can adjust their energy usage. You can also check your local utility's website for energy efficiency programs to reduce costs.
In addition to the cost per kWh, there are other factors to consider when choosing an energy plan. These include the length of the contract, sign-up fees, early cancellation fees, and special incentives, such as for homes with electric vehicles (EVs). It is also worth looking at reviews for each supplier and how long they have been in business, as more experienced companies are likely to provide better customer service.
If you are unable to install solar panels on your property, you can save 5-15% on your electric bill by subscribing to a community solar farm.
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Tiered rate plans
California's energy deregulation means that homeowners can select their energy providers based on their budgets and energy requirements. However, this also means that choosing an electric supplier can be a time-consuming and thoughtful process.
One option is a tiered rate plan, a more traditional billing plan where the best way to keep energy costs low is to limit your total energy consumption. Tiered rate plans have different prices for different amounts of usage. Each billing period begins at the Tier 1 rate, which has the lowest price per kilowatt-hour (kWh). As usage increases over the billing period, customers pass from the lower-priced block of usage to the higher-priced blocks. The lowest price block of usage is called the baseline. The baseline is set between 50-70% of the average household consumption within a given climate zone and varies by season, with smaller amounts in the winter due to decreased need for air conditioning.
The Tiered Rate Plan Comparison Tool can give you a personalized comparison between your current plan and other plan options, helping you identify the least expensive plan based on your typical usage. You can also use the Appliance Energy Use Cost Estimator to see how much you can save by shifting energy use to off-peak hours.
There are also various programs and incentives in California to make energy more affordable, such as the Energy Savings Assistance Program (ESA), which provides no-cost weatherization services for renters and homeowners who income-qualify, and the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) Programs, which offer monthly discounts on electric bills for income-qualified utility and CCA customers.
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Electric vehicle (EV) contract clauses
Electric vehicle (EV) ownership in California can qualify you for reduced electricity rates, and you may even be able to cover the cost of your EV charging station with certain incentives. Southern California Edison offers special Time-Of-Use (TOU) rates for EV drivers, allowing them to benefit from lower electricity rates during off-peak hours. The TOU-D-PRIME plan provides the lowest rates in the morning, early afternoon, and overnight, with additional savings before 4 pm and after 9 pm. EV drivers who install a second meter for charging may also qualify for a monthly EV meter credit.
In addition to the cost per kWh, there are other important contract considerations. These include the length of the contract, sign-up fees, early cancellation fees, and more. Given the prevalence of EVs in California, some contracts have clauses or incentives for homes with EVs.
For employers, there are electric vehicle salary sacrifice schemes that can be added as contract clauses to benefit both employers and employees. These schemes can be added to existing contract templates to make a change to an employee's contract terms to cover the electric vehicle salary sacrifice scheme.
California has several programs to help residents save on their electricity bills, including:
- The California Alternative Rates for Energy (CARE) Program: a monthly discount of 20-35% for electric bills for income-qualified utility and CCA customers
- The Family Electric Rate Assistance (FERA) Program: an 18% monthly discount applied to electric bills for income-qualified utility and CCA customers
- The Medical Baseline Rate Program: ensures a set amount of electricity at the lowest monthly discounted rate for residential customers with qualifying energy needs due to medical conditions
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Solar energy
Solar panel installations can be costly, with an average of $11,435 for a 5-kilowatt system, but there are financing options available. Federal tax credits and incentives can lower the cost by 30% until the end of 2025. California also offers a battery rebate program called the Self-Generation Incentive Program (SGIP), providing $150 per kilowatt-hour of home energy storage. Additionally, cash purchases provide the highest long-term savings, while solar loans allow ownership with minimal upfront costs.
When considering solar energy, it's important to research various suppliers and read reviews to predict the kind of service you'll receive. It's also crucial to understand your energy usage patterns, as most plans in California are time-of-use (TOU) plans, with rates depending on the time of day and day of the week.
By investing in solar energy, California homeowners can expect to earn back their initial investment in about 5 years, with systems lasting at least 25 years. This long-term savings potential, combined with the state's incentives and the ability to avoid high utility costs, makes solar energy an attractive option for those seeking cheaper electricity in California.
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Frequently asked questions
The average monthly electricity bill for residential customers in California is $260, which is 5% higher than the national average.
The average electric rate in California is 30 ¢/kilowatt-hour (kWh).
California's deregulated energy market allows homeowners to choose their electricity provider. You can compare electricity rates online to find the cheapest plan for your energy needs. You should also consider the type of plan, such as a time-of-use (TOU) plan or a tiered rate plan, and the contract terms, including length, sign-up fees, and early cancellation fees.
Yes, California offers several programs to help residents save money on their electricity bills. These include the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) Programs, which provide monthly discounts for income-qualified utility and CCA customers. Additionally, the Energy Savings Assistance Program (ESA) offers no-cost weatherization services for eligible renters and homeowners.
You can reduce your electricity bill by using less electricity or by switching to solar energy. Community solar programs in California can save you 5-15% on your annual electricity costs. Additionally, you can consider driving an electric vehicle (EV), as charging an EV in California is cheaper than buying gas.
