Rate-path milestones
This table compares only the entered cents-per-kWh paths. It does not translate the gap into utility-bill savings.
| Year | PPA rate | Utility scenario | Utility − PPA |
|---|---|---|---|
| Year 1 | 15.00¢/kWh | 20.00¢/kWh | +5.00¢/kWh |
| Year 5 | 16.82¢/kWh | 22.51¢/kWh | +5.69¢/kWh |
| Year 10 | 19.40¢/kWh | 26.10¢/kWh | +6.69¢/kWh |
| Year 15 | 22.38¢/kWh | 30.25¢/kWh | +7.87¢/kWh |
| Year 20 | 25.82¢/kWh | 35.07¢/kWh | +9.25¢/kWh |
| Year 25 | 29.79¢/kWh | 40.66¢/kWh | +10.87¢/kWh |
Review notes
- Under the entered assumptions, the PPA energy rate remains below the utility energy-rate scenario through Year 25. This is a rate-path comparison, not a savings guarantee.
- The PPA contract escalator (2.90%) is lower than the entered utility-rate escalation scenario (3.00%). Under this scenario, a starting PPA rate advantage tends to persist or widen.
- The utility escalation input is a homeowner-selected sensitivity assumption, not a Home Solar Atlas forecast of future electricity prices.
- A cents-per-kWh comparison is not the same as a utility-bill comparison. Fixed charges, time-of-use pricing, minimum bills, taxes, export compensation, solar production, degradation, curtailment and how much grid energy the home still imports can materially change actual bills.
What “rate crossover” means here
The calculator compounds the entered PPA contract escalator and the entered utility-rate escalation scenario independently. A crossover is the first modeled year when the PPA energy rate is equal to or higher than the utility energy-rate scenario.
If no crossover appears, that only means the PPA rate stays below the selected utility-rate path within the chosen horizon. It does not guarantee bill savings or predict what the utility will actually charge.
Contract escalator and utility escalation are different assumptions
The PPA escalator is a written contract term. The utility escalation rate is uncertain and should be treated as a sensitivity assumption. A proposal can make long-term savings look much larger when it assumes utility rates increase faster than the contractual PPA rate.
Use a utility-rate reference you can explain
A utility bill can contain energy charges, time-of-use periods, fixed monthly charges, taxes, riders and credits. If you enter a cents-per-kWh value here, know whether it represents a tariff energy rate or an all-in effective rate calculated from a bill. Mixing definitions can make the comparison misleading.
For long contracts, test more than one utility escalation scenario instead of assuming one future rate path is certain.
Why this is not a utility-bill savings calculator
A PPA rate applies to billed solar energy under the contract, while the home can still import energy from the grid and pay fixed or minimum utility charges. Solar production, degradation, time-of-use pricing, export compensation, taxes and other tariff rules can all change the actual bill.
This tool deliberately compares only two cents-per-kWh paths. Use the complete contract and current utility tariff when making a financial decision.
Frequently asked questions
What is a solar PPA rate crossover?
In this calculator, rate crossover is the first modeled contract year when the compounded PPA cents-per-kWh rate is equal to or higher than the utility energy-rate scenario you entered. It is a rate-path comparison, not a prediction that the utility will actually follow that path.
Is a 2.9% PPA escalator the same as a 2.9% utility-rate increase?
No. A PPA escalator is a contractual increase in the PPA energy price. Utility-rate escalation is uncertain and is entered here only as a sensitivity scenario. The two percentages can be compared mathematically, but they represent different things.
What happens if the PPA escalator is higher than the utility-rate escalation scenario?
When the PPA rate starts below the utility reference but compounds faster, the gap can shrink and the modeled PPA rate may eventually reach or exceed the utility-rate scenario. The exact crossover year depends on both starting rates, both escalation assumptions and the comparison horizon.
Does a PPA rate below the utility rate guarantee lower electric bills?
No. A cents-per-kWh comparison does not include grid imports, fixed or minimum charges, time-of-use periods, export compensation, taxes, solar production, degradation or other tariff and contract terms. A lower modeled PPA energy rate is not a utility-bill savings guarantee.
Which utility rate should I enter in a PPA comparison?
Use a utility energy-rate reference you can identify and explain from the tariff or bill. If you use an all-in effective rate instead of a tariff energy rate, do so intentionally and keep the definition consistent when interpreting the result. Testing more than one future escalation scenario is safer than treating one path as certain.