Reduces Your Electric Bill This is the type of detailed solar power analysis we do for our customers: A typical large house in the San Jose, California area with air conditioning or a swimming pool will use about 1,500 kWh (kilowatt hours) of electricity per month. At current PG&E rates, this level of consumption works out to about $300 per month for electricity averaged throughout the year. In the summer of 2001 PG&E drastically changed their electric billing methods for residential customers. Their cost structure now includes five rate tiers -- instead of the previous two tiers (baseline and above baseline). The most common rate tiers (E-1 rates) range from $0.11 for baseline electricity consumption all the way up to $0.35 for top tier consumption (not including various adjustment and discount factors). Not surprisingly, owners of even small and medium-size houses find themselves in rate tiers in which they pay in excess of $0.20 per kWh. In order to calculate your actual energy savings from a solar power system it is necessary to consider the changes in your electric bill in each applicable rate tier on a monthly basis. Simply averaging your savings over the year will not take into account the seasonal output of the solar energy (photovoltaic) system, nor will it properly consider the impact of multiple rate tiers. The following chart shows how the electicity consumption for this typical large house maps into these five rate tiers. Note that electricity consumption typically increases in the summer months because of air conditioning and pool use. At these consumption levels, the homeowner is consistently in the highest rate tier throughout the year. Marginal electric rates at the top tier are billed at $0.26 per kWh, which are much higher than the average annualized rate of $0.18 paid by this homeowner. As you can see in the second chart, the solar power (photovoltaic) system essentially eliminates most of the top tier electrical usage. There is an excellent match between the seasonal output of the solar power system (energy output is highest during the summer months) and the seasonal energy usage of the home. Additional solar power system output would go towards reducing lower rate tiers - which will save less money than the higher rate tiers. For many solar energy customers, changing to PG&E's E-6 Time of Use rates makes sense. Depending on your actual daily load profile, you can reduce your electrical expenses by an additional 10 to 20 percent because you will essentially be selling expensive peak power back to PG&E (when the solar power panels are operating at their peak output during summer afternoons) and consuming inexpensive, off peak power. In most cases, we recommend that customers evaluate their actual daily load profile after the solar energy system is installed to determine if a change to the E-6 rate makes sense.