US electricity rates have risen an average of 2.85% per year for 25 years (EIA data). See exactly what your electric bill will cost over the next 25 years — and how much solar can lock in your savings.
Most homeowners evaluate solar based only on today's electric bill — but that bill is not fixed. It rises every single year. At a 3% annual escalation rate (the US historical average per the EIA), a $150/month bill today becomes $314/month in 25 years. Over that same 25-year period, a homeowner paying $150/month today will pay approximately $68,000 in electricity — compared to $45,000 if rates had stayed flat. The $23,000 difference is pure escalation premium: money paid to the utility company because electricity got more expensive, not because you used more of it.
This tool uses compound escalation projections grounded in 25 years of EIA data. It is designed for homeowners who want to understand the true cost of inaction, and for solar professionals who need a crisp, visual, fact-based way to illustrate what rising rates mean for a prospect's lifetime energy spend. The escalation slider makes it easy to model conservative, moderate, and aggressive rate scenarios side by side.
When you toggle on the Solar Comparison overlay, the tool adds your solar scenario costs and shows exactly how much you save by locking in your energy rate with solar. The "rate lock value" metric isolates the financial value of hedging against future rate increases.
Based on 25 years of US residential electricity rate data from the Energy Information Administration. Uses the compound escalation formula consistent with NIST EERC methodology.
Drag the escalation slider from 0% to 8%. Model conservative or aggressive scenarios. See how each changes your lifetime cost. Quick-select presets for 2%, 3%, 4%, and 5%.
Toggle on the solar comparison to see exactly how much solar saves vs. paying the utility bill for 25 years. Includes break-even year, total savings, and rate lock value.
Know your 25-year utility baseline before sitting down with an installer. When the installer presents a solar proposal, you can immediately compare their total system cost against your projected utility spend.
Compare the installer's total proposal cost against your projected utility spend over the same period. Enter their system cost, financing terms, and offset percentage. Instantly see whether the numbers work.
Show a family member or financial partner what inaction costs in real dollar terms. The cumulative chart makes the case visually — "We'll pay $71,000 to the utility or $42,000 for solar" is a conversation-changing statement.
Input your average monthly electric bill and your current rate per kWh. Both are on your utility statement. The US national average rate is approximately 17.78¢/kWh (EIA 2024). Your monthly usage is auto-calculated from bill ÷ rate.
Drag the annual rate increase slider or click a preset. The US 25-year average is 2.85%/year — use the "Historical Avg 3%" preset as a starting point. If you're in California or the Northeast, try 4–5%.
Choose how many years to project. 25 years matches a typical solar system lifespan and warranty period. Use 10 or 15 years if evaluating a shorter-term decision.
See your Year 25 monthly bill, Year 25 rate, total 25-year utility spend, and the extra cost due to escalation. Click "Show Year-by-Year Breakdown" to see a detailed table.
Flip the "Compare with Solar?" switch to overlay your solar cost scenario. Enter your system cost, any incentives, monthly payment, and solar offset percentage. See the break-even year and total 25-year savings.
All calculations use standard compound growth formulas consistent with NIST EERC methodology and FEMP Utility Escalation Guidance. Every formula is transparent and based on public EIA data.
Worked example: A homeowner pays $200/month ($2,400/year) at $0.14/kWh. At 3% escalation: Year 5 rate = $0.14 × (1.03)5 = $0.1623/kWh. Year 10: $0.1882/kWh. Year 25: $0.2927/kWh. Cumulative 25-year electricity cost without solar: $84,700. A solar system costing $18,000 after ITC eliminates this entire escalation exposure — a rate lock value of $66,700 over 25 years.
Calculations sourced from SurgePV’s Utility Rate Escalation Projector — surgepv.com/tools/utility-rate-escalation-projector/
| Period | Avg Annual Increase | Key Driver |
|---|---|---|
| 1999–2024 (25-year avg) | 2.85%/year | Infrastructure, fuel costs |
| 2021–2022 | ~11% | Natural gas price spike |
| 2022–2023 | 5.69% | Post-spike adjustment |
| 2023–2024 | 3.13% | Moderating but above avg inflation |
| 2024–2026 (EIA projection) | Continuing increase | Data centers, grid spending |
| California (2015–2025) | ~3.8%/year | Grid upgrades, clean energy mandates |
| US National Avg Rate (2024) | 17.78¢/kWh — EIA Electric Power Monthly | |
| Projected 2026 Average | 18.02¢/kWh — EIA Short-Term Energy Outlook, Feb 2026 | |
| Annual Escalation | Year 5 | Year 10 | Year 15 | Year 20 | Year 25 |
|---|---|---|---|---|---|
| 1% (Conservative) | $157 | $166 | $173 | $183 | $192 |
| 2% | $165 | $183 | $202 | $223 | $246 |
| 3% (Historical US Avg) | $174 | $201 | $233 | $271 | $314 |
| 4% | $182 | $222 | $270 | $329 | $400 |
| 5% (Aggressive) | $191 | $244 | $312 | $398 | $508 |
The US average is 2.85%, but rates vary significantly by state. California has exceeded 5%/year in recent years — SCE approved a 12.9% increase for 2026 alone. Look up your state's 10-year historical rate trend for the most accurate input.
A 3% escalation sounds small but the math is exponential. Over 25 years: a $150/month bill becomes $313 at 3%, $400 at 4%, and $508 at 5%. Many homeowners assume rates increase linearly — this massively underestimates the true cost.
If you're evaluating a 12-year solar loan, set the projection horizon to match. You want an apples-to-apples comparison: 12-year projected utility spend vs. 12-year total loan cost.
The EIA's February 2026 Short-Term Energy Outlook projects the US average residential electricity price to reach 18.02¢/kWh — driven by surging data center demand and ongoing grid infrastructure investment. Consider running a 4% scenario as your base case for 2026 onward.
This tool uses the historical US average escalation rate of 2.85% per year (EIA, 1999–2024) as its default. Projections are inherently uncertain — rates could rise faster or slower depending on utility investments, fuel prices, and regulatory decisions. We recommend modeling 3–5 scenarios (1%, 2%, 3%, 4%, 5%) to understand the range of outcomes.
According to the U.S. Energy Information Administration (EIA), US residential electricity rates have increased an average of 2.85% per year over the past 25 years (approximately 1999–2024). Recent years have been more volatile: rates increased nearly 11% from 2021 to 2022, then 5.69% in 2023 and 3.13% in 2024.
Yes, according to the EIA’s February 2026 Short-Term Energy Outlook. The EIA projects the US residential average electricity price to rise to approximately 18.02¢/kWh in 2026, up from 17.78¢/kWh in 2024. Retail electricity prices have risen faster than the rate of general inflation since 2022.
Use the “3% Historical Avg” preset as a baseline — it closely matches the 2.85% EIA 25-year average. If you live in California, New England, or the Mid-Atlantic, use 4–5%. If you live in states with historically stable rates (Mountain West, Southeast), 2% may be more appropriate.
When you own a solar system, your solar energy cost is essentially fixed at the time of installation. You pay for the panels and installation upfront (or via fixed monthly loan payments) — but the sun’s energy is free. As utility rates rise, your solar savings automatically increase.
The rate lock value is the financial benefit of eliminating your exposure to utility rate escalation for the portion of your bill that solar covers. It is calculated as: (what you would have paid the utility for solar-offset energy at escalating rates) minus (what you actually pay for that energy via solar, which is fixed).
The solar comparison section accounts for the fact that solar typically offsets a percentage of your consumption (default: 95%). We do not separately model net metering export credits in this tool. The remaining utility bill reflects only the unoffset portion of your consumption, escalating at the same rate you selected.
Large single-year spikes (like the 11% increase in 2021–2022) are often followed by moderation. However, if your state has recently approved multi-year rate increases, you may want to use a higher escalation rate (4–5%) for the near term. Our scenario table shows the total cost impact across five escalation rates.
Estimate your monthly and annual electricity costs based on appliance usage and local rates.
Calculate how much you save with net metering by selling excess solar energy back to the grid.
Calculate your solar system payback period with precision — accounting for incentives, financing, and utility escalation.
Calculate monthly loan payments, total interest, dealer fee impact, and net 25-year savings for solar financing.
Compare the three ways to go solar side by side — ownership, lease, and power purchase agreement — with 25-year financial projections.
Quantify the environmental impact of your solar system in CO2 offset, trees planted, and miles not driven.
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