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Rick Klau
Director, Industry Marketing at Imanage
Husband. Dad. California Chief Technology Innovation Officer @CADeptTech. Previous: 13+ years @Google (@GVteam @YouTube @Blogger). he / him. Tweets are my own.
Highlights
I spend most of my time talking about the Inflation Reduction Act's climate benefits. But in addition to being good for the planet, the IRA is also really good for American pocketbooks: federal spending on healthcare is more than 2x defense spending, yet until the Inflation Reduction Act came along the US government was legally prohibited from using that market position to negotiate lower drug prices. As a result, Americans pay 200-300% more than patients in other developed nations for the same exact drugs. With this new order, "some Medicare Part B patients may save as much as $4,593 per day if they use those [one of 64] drugs during the quarter." 🤯
Because of my solar panels, PG&E has no idea how much electricity I consume yearly. Thanks to those panels, my $/kWh is shockingly low – making my heat pump water heater upgrade even more affordable.
In my last post, I estimated the annual cost to operate my new water heaters:
“On average, my new Rheem Manufacturing water heaters each consume about 2.5 kWh per day. How much you spend per kilowatt hour depends on your electric utility rate plan – in my case, between $.38 and $.55 per kWh. (I’ll do a separate post deconstructing per kWh pricing, because this is a surprisingly deep rabbit hole.) At that cost, it will cost $821 per year in electricity costs to run my water heaters.”
This post is all about that rabbit hole. Turns out that it will only cost me around $130/year to operate my water heaters, not $800. Which means I’ll come out ahead over $2,000 per year. Confused? So was I!
I’m on a time of use rate plan through Pacific Gas and Electric Company – an increasingly common plan that charges more per kilowatt hour during peak windows, when demand is high. (In California, these tend to be late in the day, when we lose solar power but people still consume a lot of energy. Supply goes down, demand stays high = higher per-kWh prices.)
Over the course of last year, I paid PG&E ~$4,000 for 10 megawatts of electricity, ~$.40 per kWh. But it turns out that I actually consumed nearly 3x that amount of electricity – kilowatts that PG&E never saw, because they came from my solar panels, and were consumed directly (chart below).
Paying $4,000 for 28.5 megawatts means I paid just ~$.07 per kWh. (Without solar? My PG&E bill last year would have been well over $10,000!) My new water heaters, which consume ~5 kWh/day combined? Over the course of a year, they’ll cost me just $130 in electricity costs to operate – roughly 90% less than I was paying in gas each year.
A note on those solar panels: we installed them when we bought the house in 2016. We made our money back in just five years thanks to the money saved on our annual PG&E bills. Going forward, those annual savings keep our overall utility costs down, and make future home electrification upgrades even more affordable.
Back to PG&E: because they have no visibility into the energy produced on my roof, they have no idea how much energy I’m actually consuming. This isn’t their fault – they only know about the kilowatts I buy from them. Which means that the advice they provide – about rate plans, about how I compare to my neighbors – is incomplete. It was only after I built my own dashboard that combined my PG&E data with my solar data that I could see a complete snapshot of my home’s energy consumption. (I’ll have more to say about that snapshot – and other insights from that snapshot – in a future post.)
#decarbonization #heatpumpwaterheaters #solar

