Forecasted Rates

Why Using Our Forecasted Rates is Better for Your Forward-Looking Calculations

Hi there!

We understand that planning your utility costs for the next 12 months can be a bit tricky. You might be tempted to use the last published rate and apply it for the entire year, but we’ve got a better approach that can save you time and give you more accurate predictions.

The Problem with Using Last Published Rates

Using the last published rate (trailing 12 months or TTM) means you’re relying on past data that might not reflect future changes. This can lead to inaccurate cost predictions because it doesn’t account for:

• Seasonal Variations: Utility rates often fluctuate with the seasons. For example, fuel costs might spike in winter but drop in summer.
• Rate Changes: Utilities frequently update their rates, sometimes monthly or even daily. Relying on old data means you miss these adjustments.
• Significant Changes: Occasionally, there are major updates to tariff structures or costs. For instance, last year, SDGE had a major overhaul that would not be captured by just looking at the last year's rates.

Why Our Forecasted Rates Are Better

We recommend using our forecasted rates for your calculations, and here’s why:

1. Reflects Seasonal Trends: Our forecasted rates account for seasonal changes, ensuring that your cost predictions align with the actual rise and fall of prices throughout the year. This way, you’re not surprised by high costs in peak seasons.
2. Captures Frequent Adjustments: Many utility tariffs have variable rate components that change frequently. Our forecasts incorporate these changes, giving you a more up-to-date and accurate picture.
3. Better Predicts Future Costs: By analyzing historical data and trends, we can project future rates more accurately. This helps you plan better and avoid unexpected costs.

Real-Life Example

Let’s see how this works with a typical solar customer in Boston:

Using TTM, you might see lower costs because it’s based on older rates. However, it doesn’t reflect what you’ll actually pay in the future. Using FTM without forecasts might give a better picture but can be inaccurate if there’s a sudden spike in rates. Our forecasted rates, however, provide a balanced and accurate view, accounting for seasonal and frequent rate changes.

Why Accuracy Matters

Accurate first-year cost predictions are crucial. They build trust and ensure your customers are happy with their savings. An accurate prediction means fewer support calls and more satisfied customers who are likely to refer your services to others.

Conclusion

Using our forecasted rates helps you create more accurate, reliable, and customer-friendly calculations for the future. It’s all about giving you the best tools to plan ahead and keep your customers happy.