The U.S. Bureau of Labor Statistics published its latest Consumer Price Index (CPI) report on July 13, showing that inflation remains high, especially in the energy sector. The overall CPI increased by 1.3% in June 2022 and 9.1% in the 12 months from June 2021 to June 2022. Energy prices in particular saw a drastic increase of 7.5% in June alone and an increase of 41.6% in 12 months. .
Rising energy prices have a financial impact on homeowners and businesses that rely entirely on utilities. However, homeowners who have invested in energy efficiency and on-site renewable generation are less affected. Energy efficiency reduces consumption per square meter, while local generation reduces the amount of energy purchased from external sources.
Minimize your utility costs with an energy retrofit and commercial solar panel.
Commercial solar panels and other on-site generation systems are not limited to saving electricity. They can also help tenants save on natural gas, heating oil, diesel and gasoline when combined with other technologies.
- Renewable electricity can power heat pumps, which can be used for both space heating and hot water. This is an economical heating alternative that does not rely on natural gas or heating oil.
- When a commercial building with on-site generation is equipped with electric vehicle charging stations, renewable electricity can also be used for transportation purposes. Building occupants can use DC Fast Chargers to recharge their batteries in minutes, rather than waiting hours while their EVs are plugged into Level 1 or Level 2 chargers.
July 2022 CPI Report: Breaking Down Energy Prices
The CPI report provides an overall inflation rate for energy, which is then divided into two main categories.
- Energy products: Fuel oil and gasoline (all types).
- Energy services: Electricity and piped natural gas.
These products and services are essential for homeowners and businesses. Most buildings rely on fuel oil or natural gas for their heating needs, while electricity is used to power all other appliances. Gasoline prices directly increase transportation costs unless the company has a flexible work-from-home policy.
The following table summarizes the Consumer Price Index data for the energy sector, starting with the overall inflation rate, and then by category and product:
|
item description |
CPI Change June 2022 |
CPI change, 12 months |
|
Energy (in general) |
+7.5% |
+41.6% |
|
Energy commodities Gasoline (all types) Fuel oil |
+10.4% +11.2% -1.2% |
+60.6% +59.9% +98.5% |
|
Energy Services Electricity Utility natural gas |
+3.5% +1.7% +8.2% |
+19.4% +13.7% +38.4% |
Energy inflation means higher costs for building owners who rely entirely on utilities. However, this also means that energy efficiency measures and on-site generation generate more savings compared to the previous year. For example, if your electricity rate increased from 16 to 18 cents/kWh, the savings achieved for every 10,000 kWh of solar generation would also increase (from $1,600 to $1,800).
Considering the 59.9% increase in the price of gasoline, electric vehicles become a more attractive investment. This is especially true if you buy a model that qualifies for the federal EV Tax Credit , which reduces your net cost by up to $7,500. Building owners can take advantage of this growing market by implementing DC fast chargers and selling 15-20 minute recharges to visitors who own EVs.
Similar conclusions can be drawn in the case of fuel oil and natural gas, both of which are used for heating purposes in buildings. When their prices rise by 98.5% and 38.4%, the business case for switching to heat pumps improves, especially if they are powered by a commercial solar panel.
Avoiding high energy prices with a professional energy audit
There are many green technologies that are capable of reducing energy costs in buildings, but each property is unique. You may find that a specific technology is very effective at one property while offering minimal savings at another. An energy audit is the best starting point, as you can count on professional consultants. They can identify the most effective energy conservation measures for your property and can also analyze the feasibility of renewable generation and electric vehicle charging infrastructure.
