Hey, it’s Andrew. If you’ve been following the news, you’ve probably heard that New Jersey's electricity rates are set to increase significantly starting June 1, 2025 (
here's the source). For many of us, this means an increase of 17-20% in our monthly electricity bills. That's a pretty big jump, with the average family seeing an extra $300-$400 per year coming out of their pockets, it's a change that could hit families and small businesses hard.
The reason for this increase is due to a few key factors, all related to the rising demand for electricity, an aging grid, and market dynamics that are out of our control. Specifically, the cost of generating electricity through the PJM regional power grid is rising, and unfortunately, it looks like these price hikes could continue in the future. This means that unless something changes dramatically in the way the electricity market operates, we’ll likely see our energy costs climb even higher over time.
Understanding How Electricity Prices Are Set
Each year, New Jersey’s electricity rates are influenced by something called the Basic Generation Service (BGS) auction. This auction determines the cost of electricity for most residents and small businesses. When demand for electricity rises—like it has in recent years—the cost of purchasing that power increases as well. The results of this auction for the upcoming year show that, on average, electricity rates are expected to go up by about 17-20%, depending on where you live in New Jersey.
The rates are passed on to us through our local electric companies (PSE&G, JCP&L, ACE, and RECO), and there’s not much we can do to stop these hikes unless we take matters into our own hands. This is where solar comes in. When you switch to solar, your energy is generated by your own system, and you're shielded from these price increases.
