2. Fraud: Too many people have been victimized by glib sales reps with promises of cheap electricity flowing in an unending stream only to discover that, as is so often true, “it ain’t necessarily so”. They’ve been locked into unwanted term contracts or there’s a catch – some utilities will give you the great rate only if you meet a usage minimum; basically, the “rate” is, in actuality, a “bulk purchase” discounted fee – or they paid a deposit never to hear from the rep again.
In 2016, for example, they correctly called the recovery in oil prices but failed to foresee that clean energy investment would fall. Funds flowing into the sector were 18% lower than the previous year at $287.5bn, although they estimate that about half of the drop was due to lower costs rather than a decline in activity. A slowdown in the Chinese market was the other major factor.
But they are not pessimistic about the sector. “The good news is that renewable energy has – at least on a levelized cost of electricity, or LCOE, basis – clearly achieved the long-awaited goal of grid competitiveness,” they say. Both onshore wind and solar projects have won auctions, in Morocco and Chile respectively, with bids of $30/MWh or less in the last 12 months. “These must be the lowest electricity prices, for any new project, of any technology, anywhere in the world, ever. And we are still going to see further falls in equipment prices,” they assert.
Fixed-rate, long-term (contract) plans provide stability in electricity rates. If market energy costs suddenly trend upward where you live, you can rest assured that you won’t have to pay more out of pocket. However, if you want to switch to a different, lower-cost plan before the end of the contract term, you’ll likely have to pay a cancellation or early termination fee.