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  • Adam H. Cooke

Third-Party Electric Suppliers | What you need to Know | Premier Improvements Solar


Ready to go Solar? Call 860-969-4006 to be Connected with an Expert Today!


You can sign up to be a third-party supplier in many states. These companies bring competition to the energy market and offer consumers more options. However, it can be difficult to know if they are right for you, especially if your solar system is involved.



What is a Third-Party Energy Supplier?


Let's first discuss the differences between a utility company, and a third-party energy supplier. Utility companies are those that own the poles and wires. They generate electricity and deliver it to your house, business, or farm. The supplier sells the energy to you.



This is how it works: A third-party electricity supplier purchases energy in bulk from the utility. They then sell the energy to consumers at an additional rate (which is usually less than the utility rate, at least for a start). These companies act as intermediaries or go-betweens.



Occasionally, they can reduce your energy costs. Occasionally, they won't.


Should you switch to third-party suppliers if you live in a state with such a policy?


Energize CT is where you can find local rates in your area


You should not change to a third-party energy supplier if you already have solar energy. If you don't have solar energy, you may be able to save money and switch depending on your situation and the supplier.


This blog will discuss how to use a third-party electricity provider in both those cases.


Ready to go Solar? Call 860-969-4006 to be Connected with an Expert Today!


Are You Using Third-Party Solar Electricity?


A third-party energy company could contact you after your solar system is installed. This could lead to you spending a lot of money. This is due to net metering being a major factor.


Net metering, provided you are in one of the 38 states with it, gives you credit for any kWh your solar system produces that was not used at the time of production.


When the sun shines, your solar system produces kWh. Your system may produce more electricity than what you need, which can lead to “extra” electricity. Net metering allows you to receive credit for every kWh that your system produces.


If your solar system does not produce energy (like in the middle of the day), but you still require electricity, then you can draw power from the grid until your credit runs dry.


Solar energy's return on investment is dependent upon net metering. You only offset your electricity costs if you use electricity when the sun shines. You could be wasting hundreds to thousands of kWh by not using net metering.


Here's an example. Let's say you pay $0.12/kWh to your local utility. A third-party supplier calls and offers you a fixed rate of $0.10/kWh for electricity. A $0.02 electricity reduction with no upfront investment. Sounds like a no-brainer!


What are you really losing?


You're losing a lot if you have a grid-tied system with net meters.


Imagine your 13 kW system producing around 15,000 kWh per year. This is 41 kWh per day. The average homeowner is at work when the sun rises. You might have some appliances on while you're away and some lights on. Let's say that you consume 15 kWh of electricity per day while you're gone, while your solar system produces 41 kWh. (An example: A washing machine averages 0.5 kWh per hour).


This means that you are not drawing 26 kWh from your solar system. However, you could use that energy to power your home. Your solar system isn't producing any more energy, so you aren't drawing from it. Net metering allows you to draw from the 26 kWh of solar energy while it is low, providing free power for your family. These 26 kWh will be lost if you don't have Net Metering.



Instead of using the free electricity generated by solar panels, you will have to buy 26 kWh at $0.10/kWh. This is $2.60 per day, or $949 per year. Multiply this by the 30-year life expectancy of your solar system, and you'll be talking big money!


Even if you are offered a lower electricity price by a third-party supplier of energy, solar, it is unlikely that it will be worth it.


What if I have solar and already switched to a third-party energy supplier?


You have installed a solar system, and switched to a third-party supplier. Although you might have a lower electricity bill, net metering is available which can make your monthly bills much higher. What are your options for reducing your electricity bill?


A contract is required by many third-party energy suppliers. This contract's duration and agreements are determined on a supplier by supplier basis as well as customer by customer basis. It is not something you should do lightly. However, cancelling or breaking a contract may be the best thing.


Refer to the cancellation clause of your contract. The cancellation fee could be a flat rate, one-time fee, or it may depend on how many billing cycles remain in your contract. These contracts often last 12 to 36 months. The cancellation fee can be high in any case.


If you are charged a high fee to cancel an agreement with a third-party energy supplier, you might still be able to cancel your contract and go back to your original supplier. This will provide 100% of your electricity requirements and allow you to use net metering.


What if I am thinking about going solar and want to switch to a third-party energy supplier?


You should not sign up f


or a third-party supplier if you are considering going solar. Although you might be paying a lower electric rate, net metering is still available, which can be a significant part of your renewable energy savings.



Ready to go Solar? Call 860-969-4006 to be Connected with an Expert Today!


What if I don't have solar, and I don't intend to get it?


A third-party supplier may be an option if you don't want to go solar but still want to save money on electricity. They offer an alternative to traditional utility electric companies, but they must go beyond the call of duty to be able to attract customers.


This could often be accomplished through lower rates, flexible agreements or fixed rates. Fixed rates are not like the usual variable rates that fluctuate with energy markets.


Variable rates can mean that your electricity costs could vary between $0.11/kWh and $0.12/kWh. Fixed rates are fixed, and you will pay the same amount over the contract period. This makes budgeting much easier and eliminates the risk of variable rates.


There are some things that you need to know before you jump into third-party energy suppliers.


They are not subject to the same regulations as your utility. Many third-party suppliers of electricity are reliable and trustworthy. They use this flexibility to offer a better customer experience. There are also companies that aren't trustworthy and exploit customers lacking regulations.


You should be alert for any third-party supplier raising their rates at any moment. Although you may be signing up for a lower electricity rate, this could lead to you being locked into a contract at a higher rate and a high termination fee that will separate you from the market price electricity.

We want your solar investment to pay the best return for your home and business, regardless of whether you are one of our customers. We are available to answer any questions you may have about third-party energy suppliers, solar power, and your utility bills.


At Premier Improvements Solar, We can handle all of your needs from the Design, Permitting, Installation & Inspection of both Residential and Commercial properties. With Solar Tax Credits still available it's a perfect time to start moving forward to your financial freedom from the Utilities. Servicing All the Connecticut and Massachusetts as well as Rhode Island we are always here to help you and answer any Questions you may have. Give us a Call @ 860-969-4006 or visit our website @ PremierImprovementsOne.com for additional info.


Are you thinking about making the leap into solar energy? To learn more about the process, have a look at our Solar Services.




Reference Articles & Images

  1. https://www.paradisesolarenergy.com/blog/third-party-energy-suppliers-do-i-need-one

  2. https://www.nbcconnecticut.com/news/local/eversource-looking-to-increase-utility-bills/2918102/

  3. https://www.utilitydive.com/news/retail-electricity-prices-continue-rapid-rise-utility-debt-growing/631496/


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