Forecasted Rates

Use forecasted rates when future cost estimates need to account for seasonal variation and expected utility rate changes.

Understand forecasted rates

Planning utility costs for the next 12 months can be challenging. You might consider using the last published rate and applying it for the entire year, but that approach can miss seasonal variation and expected rate changes.

Arcadia's standard forecasting approach does not apply to hourly and sub-hourly lookups.

Understand the limits of last published rates

Relying on the last published rate (trailing 12 months or TTM) means depending on historical data that may not reflect future conditions. This approach can lead to inaccurate cost predictions because it fails to account for:

• Seasonal Variations: Utility rates frequently fluctuate with seasonal patterns. For example, fuel costs typically spike during winter months but decline in summer.
• Rate Changes: Utilities regularly update their rates, sometimes monthly or even daily. Depending on outdated data means missing these critical adjustments.
• Significant Structural Changes: Occasionally, major updates occur in tariff structures or pricing models. For instance, SDGE implemented a comprehensive overhaul last year that would not be captured by examining only the previous year's rates.

Use forecasted rates for future calculations

Use forecasted rates for future-facing calculations because they:

1. Incorporate seasonal trends: Forecasted rates account for seasonal variations so cost predictions align with expected price fluctuations throughout the year.

2. Capture frequent adjustments: Many utility tariffs include variable rate components that change regularly. Forecasts incorporate these updates for future calculations.

3. Improve future cost predictions: Forecasts use historical data patterns and trends to project future rates.

Compare forecasted and non-forecasted results

Here's how forecasted rates perform compared to traditional methods using a typical solar customer in Boston:

The TTM approach may show artificially lower costs because it relies on outdated rates that don't reflect future pricing. FTM without forecasts provides a better foundation but can prove inaccurate during rate spikes. Our forecasted rates deliver a balanced and precise view by accounting for both seasonal patterns and frequent rate adjustments.

Use accurate first-year cost predictions

Precise first-year cost predictions are essential for building customer trust and satisfaction. Accurate predictions result in:

• Fewer customer support inquiries
• Higher customer satisfaction rates
• Increased referrals from satisfied customers
• Enhanced credibility for your business

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