Why Are Electricity Bills So High in Southern California in 2025

If you live in Southern California, you’ve probably noticed your electric bill climbing higher than ever. In 2025, utility rates have reached all-time highs—while utility company profits are soaring. At the same time, politicians are debating slashing one of the most important incentives for solar energy: the Residential Solar Investment Tax Credit (ITC).

At US Power, we believe every homeowner deserves clear, honest answers—and energy independence. Let’s break down what’s driving these historic price spikes, why solar is being wrongly blamed, and what homeowners need to know before these incentives disappear.

Electricity Rates Have Hit Record Highs

The average price of electricity in California reached over 32.41¢/kWh in March 2025, according to the latest data from the U.S. Energy Information Administration (EIA). That’s one of the highest rates in the country—up approximately 35% from five years ago.

Across the U.S., nearly 80 million Americans are struggling to pay their utility bills. And unfortunately, it’s getting worse. At the start of 2025, U.S. gas and electric utilities were approved for rate hikes totaling nearly $20 billion. These price increases are outpacing inflation and are expected to continue.

Why Are Prices Really Rising?

It’s not just about fuel or inflation—it’s about infrastructure.

According to energy policy experts and verified utility data, the real cost spike is happening in distribution and delivery—not generation. The delivery portion of utility bills, which used to account for 20% of the total, now makes up more than 50% in many cases.

Upgrading California’s aging power grid is expensive, and utilities are passing that cost on to homeowners. Unfortunately, this includes bloated spending on small, local transmission projects that carry minimal oversight—and maximize utility profits.

In fact, one study revealed that while utilities spent record amounts on transmission projects in 2023, they added just 55 miles of new transmission lines nationwide—compared to over 4,000 miles in 2013. And yes, back then, electricity was about 20% cheaper.

Solar Is NOT the Problem—It’s Part of the Solution

Despite the data, some utilities are blaming rising rates on what they call the "solar cost shift". The theory claims that solar users, by generating their own electricity, make it more expensive for everyone else.

But dozens of independent studies have shown this claim is largely exaggerated. Rooftop solar actually reduces demand on the grid, especially during peak hours, which saves utilities money—and those savings are passed on to ratepayers.

In 2024 alone, rooftop solar saved California residents an estimated $1.5 billion.

Utilities are deflecting attention from their overspending by pointing the finger at homeowners who’ve taken control of their energy bills. But the numbers don’t lie—solar is saving the grid, not straining it.

The Solar Tax Credit Is Under Threat

In addition to rising utility rates, there’s another urgent issue: Congress is considering eliminating the federal solar tax credit (ITC) a full decade early.

Known as Section 25D, this 30% credit helps make residential solar affordable by giving homeowners back nearly a third of their system’s cost on their taxes. It was originally set to begin phasing out in 2033, but new legislation may eliminate it as soon as late 2025.

This move would devastate the residential solar industry—an industry made up mostly of small local businesses and employing over 100,000 Americans.

Many solar professionals, like veterans and small business owners, are now in jeopardy. Liam Madden, a solar installer and former Marine, said that removing the credit would force his company to lay off staff and serve fewer homes—just when demand is highest.

Who Stands to Lose?

This proposed policy doesn’t just impact installers—it threatens access to clean, affordable energy for everyday families. Without the ITC, the upfront cost of solar increases significantly, making it harder for working-class homeowners to invest in long-term savings.

Critics of the repeal argue that this policy shift puts energy control back in the hands of large investor-owned utilities, who profit from higher usage and centralized generation.

Even some lawmakers are pushing back. A group of 21 House Republicans recently warned that cutting the tax credit would result in drastically higher power bills—even for households that haven’t gone solar yet.

Don’t Wait—Now Is the Time to Go Solar

With electricity prices surging and incentives at risk, waiting to go solar is no longer a safe bet. Even the uncertainty surrounding the tax credit is already stalling projects, as families hesitate while Congress debates.

But industry experts agree—there’s no better time to lock in solar savings.

If you’re a homeowner sitting on the fence, contact US Power today. We are a Qcells factory-direct partner, which means you get premium panels, expert installation, and maximum value—all from a team based right here in Southern California.

You can still take advantage of the full 30% tax credit—if you act quickly.

Your Energy Freedom Is Within Reach with US Power

California’s energy landscape is changing fast—and not always for the better. But you don’t have to wait for Washington to decide your future. With utility prices climbing and solar incentives under threat, the smartest move you can make is to take control now.

US Power is here to help you every step of the way—from design to installation to lifetime support. Let us guide you through the process and help you lock in real energy savings for decades to come.

At US Power, we’re not just another solar company—we’re your neighbors. As a locally owned and operated business, we understand the unique energy challenges Southern California homeowners face.

We offer:

• Transparent consultations with no pressure
• Tailored solar system designs that maximize your savings
• Factory-direct pricing through our Qcells partnership
• Expert installation from trained local professionals
• Lifetime customer support, even after installation

Unlike big national brands, our focus is on long-term relationships—not short-term sales. From your first consultation to years after your system goes live, US Power will be there to ensure your solar investment continues to perform.

Let’s talk about how solar can help you save. No pressure. Just facts, transparency, and clean energy. Click here to schedule a free consultation