Why Is Electricity So Expensive in California and Can You Do Anything About It?
California has the highest electricity prices in the country and it continues to rise. The state was among the top 5 states with the highest average electric rates(residential) in 2021. Relying on traditional sources of power despite the growing costs does not just mean higher utility bills for users. It has various other implications for the state as well as the consumers.
Why is Electricity so Expensive in California?
Fuels, power plant costs, transmission and distribution systems, weather conditions, and regulations are all factors that influence the cost of electricity. The cost involved in generating power is affected by seasonal changes along with the consequential change in demand for electricity. According to the Annual Energy Outlook 2020, the costs involved in generating electricity are the biggest component of the final price of electricity.
According to a study by Haas Business School’s energy institute, PG&E customers in California shell out 80% more per kilowatt-hour than the national average. These are not the only customers paying more than the average. San Diego Gas & Electric customers paid twice while Southern California Edison users paid 45% more than the national average.
California is a large state and also one of the states that face extreme weather conditions. Both these factors contributed towards higher operating costs of the electric system. To add to it, PG&E customers will continue to face inflated bills as the company tries to emerge out of bankruptcy while keeping up with new obligations to ensure a better and more stable grid. All this will have a direct impact on utility bills.
Is there a way to save yourself from the exorbitant electricity bills?
Yes! Increasing dependency on other sources of energy like solar can help in bringing down the costs. While prices went up, the wealthier residents of California were able to depend more on solar with the burden of paying for costly electricity fell on middle- and low-income groups who could not afford the hardware for solar.
Even with access to solar, low and middle-income groups of residents still needed to pay electricity companies as they are the primary source for power. Additionally, non-homeowners and those in multi-family units had various challenges in accessing solar initially. However, with the advent of shared solar and service providers like Ivy that make it easier to eliminate the hassles of distributing solar in multi-family dwellings, there seems to be some relief from the ever-increasing electricity bills.
The increasing price of electricity makes the cost of living in California among the highest in the country. This means that poverty rates are set to grow in the state as affordability for a basic utility like electricity reduces.
While there are several government programs like the Low-Income Home Energy Assistance Program in place to assist residents with high utility bills, these programs are not the final solution. Adopting an approach that brings about equitable costs is much needed. The study conducted by the energy institute at UC Berkeley’s Haas Business School suggests setting fixed costs in accordance with consumers income bracket. Encouraging shared solar services at a larger scale is also much needed. It can benefit all parties involved while helping everyone contribute towards a cleaner and greener environment
Pioneering the Future of Multi-Tenant Solar Energy Management
2024 was a trailblazing year for Ivy Energy, where we shattered barriers, redefined possibilities, and delivered innovative solutions to address the multi-tenant solar split incentive challenge. By driving product advancements, forging impactful partnerships, and scaling operational processes, we empowered multi-tenant properties to embrace clean energy with confidence.
A Year of Growth and Market Expansion
Ivy has grown its active project pipeline 450% compared to 2023, with a line of sight to clear +600% in active projects by the end of the year. Our tech-enabled solutions empower more communities than ever. With $18M in Series A funding (Read more) and the strategic acquisition of Glow Energy (Read more), we are poised for unprecedented growth and impact. This investment enables us to enhance our technology, streamline operations, and expand our reach into new markets nationwide.
Entering new markets with increased resources allows us to address diverse energy challenges and deliver tailored solutions to property owners and tenants. Additionally, the launch of our consulting arm provides expert guidance for our clients and partners to save money and enhance ROI while navigating intricate solar investments.
Meaningful Operational Updates
At Ivy, innovation isn’t just about technology—it’s about creating digital tools that empower our clients and their tenants:
- PropTech Integrations: Partnered with RealPage, Entrata, and Yardi to automate rent roll syncing, move-in/move-out updates, and direct charge posting to resident ledgers. These integrations reduce monthly processing time by up to 2 hours per property while enhancing data accuracy and operational efficiency.
- NEM Credit Delay Optimization: The Utility Coordination team adopted the CPUC informal complaint process to reduce delays in NEM activation after PV solar system commissioning. This improvement cut the average resolution time for delayed NEM credits from 123 days in 2023 to 49 days in 2024, allowing property owners to see Net Operating Income over two months sooner on average.
Platform Advancements that Lead the Industry
Our engineering team broke new ground, ensuring our platform stays ahead of the curve:
- Migrated to a new infrastructure processing system for faster processing and further automation improvements across operational features.
- Introduced IvyDual in response to regulatory requirements in California, which allows us to enter new markets where consolidated billing is not viable.
- Achieved SOC 2 Compliance, reaffirming our commitment to data security. (Read more)
- Built initial public API for Conservice integration and new utility data access pathways, strengthening our platform’s versatility and reliability.
Empowering Positive Experiences with CX
At Ivy Energy, our customers rely on us as true partners in their clean energy journey, helping them achieve long-term NOI growth while providing exceptional support for property owners and tenants. We consistently deliver this experience by simplifying complex utility processes and offering our white-glove service that ensures our clients feel supported, informed, and empowered to succeed. This year, Ivy’s Customer Experience Team launched two significant platforms:
- Ivy Implementation Portal: A step-by-step, transparent portal that simplifies solar implementation for our clients and partners across multiple organizations. (Watch a walkthrough of the new portal here.)
- Resident Help Center: Educate tenants about the solar program with helpful resources and offer direct support online or by phone. (Explore the Help Center)
Shaping the Future Through Thought Leadership
In 2024, Ivy Energy reinforced its position as an industry leader; our Virtual Grid 3.0 impressed the judges and earned first place in Solar Power World’s “Best in Show” award for large-scale solar innovation. (Read more)
Leadership team members Alex Dogan, Tanya Kuhn, and Sean Nam were celebrated in San Diego Business Journal’s Leaders of Influence in Technology 2024 for their contributions to advancing sustainable energy. (Read more) Ivy was also featured in Alt Energy Magazine (Read more), San Diego Business Journal (Read more), and on Solar Academy. (Read more)
Logan Carter showcased Ivy’s groundbreaking innovations in a main stage speech at Cretech NY (Watch here), an engaging appearance on the IMN Podcast (Listen here), and a deep-dive interview with Chris Moreno, also known as “Mr. PropTech.” (Watch here) Ivy’s policy team further expanded its influence by authoring a Model VNEM Whitepaper, a critical guide to enabling multi-tenant solar models nationwide. (Read the Whitepaper).
Measurable Environmental Impact
This year, Ivy Energy amplified its environmental contributions, with contracted units in implementation set to offset an astounding 109 million pounds of CO2. Meanwhile, active units have already offset 9 million pounds of CO2, demonstrating our ongoing dedication to reducing carbon emissions.
Looking Ahead to 2025
As we celebrate 2024’s successes, we are always looking to the future. In 2025, we’ll continue to push boundaries, deliver innovations that empower our clients, improve tenant experiences, and lead the multi-tenant housing sector toward a sustainable future.
A Message from Dover Janis, CEO of Ivy Energy
“2024 was a year of progress and adaptation. While utility-caused delays challenged our growing pipeline, our focus on agile problem-solving reduced their impact and kept the market moving forward. This is a testament not only to the dedication and focus of our team but also to the strong macro-level foundation that the onsite energy business model provides for real estate owners, even in the face of monopoly-driven resistance. With a large and expanding customer base and hundreds of projects, we have continued to validate the transformative potential of clean energy solutions for shared communities. I’m incredibly proud of our team—now among the most mature, knowledgeable, and experienced in the industry—as we trail blaze the path forward. The market is primed to grow and drive transformative change in local communities. I’m deeply grateful to our partners and customers, whom we have the privilege of serving every day as we continue to lead the way.”
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