The Average Cost of Electricity in Boston, MA

If you live in Boston, powering your home can be hard on the pocket. That’s because Massachusetts electric rates are some of the highest in the country, the third highest, to be exact, at an average of 22.57 cents per kilowatt-hour for residential users. That’s almost double the median per kilowatt-hour national average of 12.47 cents. As such, your electricity costs can eat up a large portion of your income, depending on your usage. 

Still, there are ways to lower your electric bills. This guide aims to help you address the high energy rates and minimize your power expenses in the Boston area.  

Boston Electricity Rates

Both commercial and residential electricity rates in Boston, Massachusetts, are higher than the country’s average. However, because of Massachusetts’s deregulated electricity, you can choose your energy provider. With several energy companies operating in the area, picking the provider with the most affordable electricity rates will help curb your electricity costs. 

Here’s a guide to Boston, Massachusetts, electric rates. 

Average Electric Bill in Boston, Ma

The majority of electricity in Boston, Massachusetts, about 68%, is generated using natural gas. Meanwhile, 4% comes from coal and the rest is derived from other sources. As such, your monthly electricity costs will somewhat depend on the prices of these fuel sources on the energy market. 

Massachusetts also made significant strides when it comes to using clean energy in producing electricity, with around 1,867 megawatts of solar photovoltaic capacity installed. This lessens the area’s dependence on fossil fuels for power generation. 

The average price in Boston, Massachusetts, for residential electricity, is 22.67 cents per kilowatt-hour. This is 46% more than the national average of 12.47 cents per kilowatt-hour.

The average residential electricity bill for those who live in Boston, Massachusetts, is $94, which ranks 37th in the country. This is 12.15% lower than the nation’s average of $107 a month. 

Meanwhile, the average price of commercial electricity in Boston, Massachusetts, is 16.88 cents per kWh. This is higher than New England’s average electricity rate of 16.72 cents a kWh for commercial consumers and the national average of 10.52 cents per kWh.

The average monthly electric bill for commercial consumers in Boston, Massachusetts, is $525. This ranks 29th in the US and is 16.53% less than the country’s average of $629.  

Average Energy Consumption

Both the residential and commercial electricity consumption in Massachusetts is lower than the nation’s average. 

Average Residential Energy Consumption in Massachusetts 

More than 6.9 million people call Massachusetts home, and these residents live in around 2,894,484 housing units. This means high demand for electricity. However, the people in Massachusetts use electricity prudently. As such, the average electricity bill in the area is lower than the country’s average. Residential customers consume about 627 kWh a month, which is less than the nation’s average of 903 kWh per month. 

Massachusetts residents also consume less electricity on average during the summer than those who live in other states because of the area’s relatively mild weather.  

Average Commercial Energy Consumption in Massachusetts 

The economy of Massachusetts doesn’t rely on businesses that consume a lot of electricity, as the area’s primary industries deal with finances, real estate, insurance, and professional business services. Thus, the electricity consumption in Boston, Massachusetts, averages 3,794 kWh per month. This is 39.18% lower than the national average of 6,238 kWh a month. 

Factors That Affect Electricity Rates

The number of kilowatt-hours you see on your monthly electricity bill and how much those kWhs costs depend on several factors. So much has to happen before the electricity you need gets to your home and powers your appliances. Every step of the process adds to the total amount consumers pay their utility companies. 

Let’s look at the factors that determine the price of electricity in the US. 

Fuels

Electricity doesn’t appear in thin air or grow on trees. It needs to be generated first, and this process involves the burning of fossil fuels. Examples of these fuels are coal, oil, and natural gas. Unfortunately, the world’s supply of fossil fuels is fast depleting, which hikes their costs. Surges in the prices of fuels needed to produce electricity, in turn, drive up your energy costs. 

Power Plant Prices

Power plants are places where electricity is generated. These structures need to be built and maintained, which requires millions of dollars. Operating these facilities also add to the amount that goes into the computation of the per kWh price.

Transmission and Distribution Area System

There has to be a way to bring the generated electricity to the end users, which includes residential customers, big and small businesses, and industrial users. The electricity goes to the national grid and then to the various energy customers via the transmission and distribution system. Constructing, operating, and maintaining this system involves a considerable amount that factors in the per kWh price you pay each month. 

Area Regulations

Regulations vary per state. Also, depending on whether electricity in the area is regulated or deregulated, government institutions and regulatory bodies can sometimes control or dictate the electricity prices from the national grid. Some utility companies or commissions get a say on the rates that range in the region. 

Weather Conditions

The weather conditions in the area can affect the rates you pay for energy because extremes in temperature often drive up electricity consumption. For example, during the summer, air conditioning systems go into high gear to combat the sweltering heat. Meanwhile, the freezing temperatures associated with the winter months also increase energy usage because of heating needs. 

Types of Electricity Plans in Boston, Ma

Living in states with deregulated electricity allows you to choose your electric company and aren’t limited to those associated with your utility provider. Each of these electricity companies in Massachusetts offers various energy plans. Take a look at these different plan types to determine which will tailor-fit your requirements. 

Fixed-Rate Plans

Fixed-rate energy plans work well for consumers who want price stability. You see, electricity prices fluctuate from month to month as it’s affected by several factors. This makes it difficult to budget your energy expenses. However, getting a fixed-rate energy plan assures you that your price per kWh remains the same until the end of your contract, regardless of the fluctuations in the energy market. 

The contract length for this type of energy plan can last between a few months to several years. This means locking in the per kWh cost of your electricity for the duration of the agreement. Most energy companies in Massachusetts offer this type of plan, so you can easily compare rates to see which one will let you save on your utility expenses. 

Variable-Rate Plans

As the name suggests, the per kWh hour price of electricity changes from one month to the next in variable-rate plans. The rate changes at the discretion of your energy supplier and depends on several factors, such as demand, weather, the season of the year, grid problems, and the like.

This plan type won’t let you easily predict your electricity expenses but it does have some perks. Variable-rate plans in Massachusetts and other states often don’t have long contract lengths, letting you easily switch providers without paying early termination charges.  

Business Energy Plans

Big and small businesses in the City of Boston can enjoy savings on their energy costs by opting for energy plans tailored explicitly for commercial consumers. You can call any of the electricity providers that operate in Massachusetts to learn more about the energy plans they offer. Most of these providers customized energy rates and services for commercial power users. 

Green Energy Plans

Massachusetts has made substantial investments in renewable energy. As such, many electric companies offer green energy plans where the generated electricity comes from renewable sources. These include wind and solar energy. 

Green energy plans help save the environment because producing electricity using renewable sources emits very few greenhouse gasses that accelerate global warming and pollute the planet. In some instances, green energy plans have cheaper per kWh rates than plans using electricity from traditional sources. 

Boston Electric Companies

Retail electricity providers (REPs) buy electricity from the wholesale market and then sell it directly to consumers at retail prices. Deregulation allowed the entry of several electricity providers in Massachusetts. Here are some of those companies that offer electrical services in the City of Boston.

• Clearview Energy 
• Constellation Energy 
• CleanChoice Energy 
• CleanSky Energy 
• Smart Energy 
• Think Energy 
• IGS Energy 
• Provider Power Mass 
• Major Energy Electric Services 
• Town Square Energy 
• Residents Energy 
• Direct Energy Services 
• Verde Energy USA 

How To Find the Best Energy Plan?

As an electricity consumer, there are some things you’ll need to look into before you start shopping for a new energy plan. These considerations will guide you in choosing the plan with the best rate that will fit your needs. 

Here’s how to go about the process. 

1. Check your current plan: Review your contract to determine what type of energy plan you have. Check your past bills to find out how much you’ve been paying per kWh. Knowing your current electricity rate lets you easily compare it with the rates of other plans. Also, determine if your current contract is set to expire. Depending on your plan type, terminating the agreement prematurely might require you to pay an early termination fee. 
2. Consider your electricity usage level and pattern: The chances are high that your consumption fluctuates according to the seasons of the year, time of day, days of the week, and the like. While you’re reviewing your past bills, determine your usage pattern. Some plans offer reduced rates at certain times or days of the week, which lets you save on expenses. Pinpointing the instances when you use the most and least electricity can guide you on the type of plan that will offer you the most savings. 
3. Check your budget: How much can you set aside for your electricity expenses? Do you prefer to pay as you go, or would a long-term contract suit you better? Knowing the answer lets you choose the plan type accordingly. 
4. Research the different energy plans: Some plans use electricity from renewable sources, such as solar energy, while others offer fossil-fuel-based electricity. Determine which will match your objectives. You can enter your zip code on our website to quickly view the different electric companies that operate in Boston. 

How To Switch Your Electricity Provider?

Because of deregulation, residents and those who own businesses in Massachusetts have the option to pick their energy supplier. Also, because of competition brought about by a deregulated energy market, providers try to bring down their per kWh prices as much as possible. These situations give you a range of options when it comes to your electricity provider.

You can easily switch if you find a supplier that offers better rates than your current provider. But before you do so, consider doing the following. 

• Browse the different providers in your area: Most businesses have websites that detail the services they offer. This makes it easy to check and compare the various energy suppliers operating in Boston.  
• Review the plan the electric companies offer: It pays to carefully review the details of the plan, such as per kWh rate, contract length, as well as the associated fees. Read everything, including the fine print to know exactly what you’ll pay for and to avoid unpleasant surprises. 
• Request a pricing quote: This is more beneficial for those who own businesses, and most electric companies will gladly provide a customized pricing plan. The quote will factor in the higher usage level of commercial power consumers. 
• Choose the plan that suits you best: Make a short list of the companies and plans that fits your needs. Check the details. Reach out to the companies if you want more information. 
• Contact your chosen provider: When you’ve made your choice, contact the electric company and sign up for the plan you want. The new provider will do the rest, including informing your current provider about the switch. 

How to Reduce Your Electric Bill with Solar Energy?

Massachusetts is on the list of states that invested heavily in renewable energy, including solar power. About 18% of the state’s energy generation comes from solar.  

This is great news if you want to reduce, not just your power expenses but your carbon footprint as well. That’s because solar panels generate electricity without emitting greenhouse gasses that harm the planet. 

Moreover, investing in a solar power system will lower your electricity bill significantly since you’ll be using the electricity produced by the solar panels to power your home. In fact, if your system manages to cover all your energy needs, you might not have to pay an electricity bill at all. In some instances, you can even export your surplus solar electricity to the grid in exchange for energy credits. 

Solar Panel Costs

On average, home solar panels in Massachusetts cost about $16,600 or about $3.32 per watt. We say on average because the energy systems vary depending on their size and the types of panels used. These factors influence the cost. When shopping for a solar energy system, getting quotes from several suppliers or installers will increase your chances of getting the best price.  

Solar Energy Savings

The upfront price of a solar panel system can be a bit daunting. However, incentives from the local and federal government, and even from some utility companies, can lessen the cost significantly. 

The payback period for your investment is around 5 years. However, how long it takes before you recoup your expenses depends on the exact cost of your solar system and the amount of energy it generates. The more solar energy it produces, the faster you can get back the money you spent on its purchase.   

Solar panels have a lifespan of around 15 to 20 years. So after you recover the system’s cost, you get free electricity from your panels for the succeeding years.  

Solar Incentives

Solar incentives help reduce the hefty expenses involved in installing a solar energy system. They also make investing in solar energy more cost-effective. The solar incentives in Massachusetts include the following. 

Federal solar tax credit

Installing a solar energy system makes Massachusetts residents eligible for this tax credit, which is 26% of the total cost of your new solar panel system. This includes the labor, equipment, and permitting costs involved in installing the system. 

Let’s say that your solar system costs $25,000. The computation for the federal solar tax credit would go like this: 

$25,000 x 26% = $6,500 

Net metering

A billing mechanism called net metering lets you use the surplus electricity generated by your solar panels to offset the electricity you get from the grid. With net metering, you get billed only for the amount of electricity you draw from the grid. 

For example, during daylight hours, your solar power system may generate more electricity than what you consume. That means you’re not drawing energy from the grid but instead are using the energy produced by the solar panels. The surplus electricity goes back to the grid and in exchange, you get bill credits. When night falls, your panels will cease generating solar energy, so you’ll need to use electricity from the grid.  

If you’re under net metering, the utility company will deduct the bill credits from the kilowatt-hours you consume. You then pay only for the electricity you draw from the grid.  

Energy Buying Options in Boston

Boston residents can buy residential electricity in various ways. If you live in the area, you can choose any of these 3 sources. 

Utility Company

Eversource Energy (formerly NSTAR) is the utility provider in Boston. You can opt to get services from the company, which means buying electricity directly from them. In areas with regulated electricity, consumers can only buy electricity from their utility. The case is not the same in Boston because of the deregulation of electricity in the area. That means you can choose power providers aside from those associated with Eversource Energy.

City of Boston Community Choice Electricity Program

Boston Community Choice Electricity (BCCE) allows the city to secure electricity at a competitive rate. It’s a municipal aggregation program offered by the City of Boston to its residents and is made possible by the city’s partnership with Constellation New Energy, an electricity supplier. 

Some residents were automatically signed in to the program while others have to enroll if they want to join. 

Electric Suppliers

Electric suppliers are licensed electricity providers that buy electricity from utility companies at a wholesale price and then sell it at retail rates to power consumers. You can sometimes get lower rates from these companies. However, these rates are subject to change depending on your contract.  

You can choose from several electricity providers serving the City of Boston. 

About Boston, Ma

Known as “Beantown” or “The Hub,” Boston is one of the country’s largest cities and the largest city in the Massachusetts and New England area. It is also the capital of The Commonwealth of Massachusetts and the cultural and financial center of the New England region.   

Boston is located on the eastern coast of Massachusetts. It is one of the oldest municipalities in the US, founded in 1630 by Puritan settlers. Currently, it has a population of about 679,413. 

The median family income of residents in the city is $75,476, and around 48% of Boston’s population hold bachelor’s degrees or higher education certification. 

Popular ZIP Codes

If you’re looking for the best place to live in Boston, you can choose from these zip code areas.

• 02420: Lexington
• 02139: Cambridge
• 02446: Brookline
• 02138: Cambridge
• 01778: Wayland
• 02445: Brookline
• 02142: Cambridge
• 02461: Newton
• 02421: Lexington
• 01720: Acton

Living and Moving to Boston

Boston is considered one of the best places to live in the US, ranking number 18 in the 2021-2022 top 20 list. That’s a giant leap from the number 31 spot it occupied in previous years. The rise in ranking makes sense to those who live in the city because of what Boston offers to residents and non-residents alike. 

The Boston Metropolitan area serves as home to Fortune 500 company headquarters, which includes Staples, TJX, Raytheon, and EMC. It’s a relatively compact city and a good walking city, where using your feet to go from one neighborhood to another is relatively easy.

The city also boasts top-notch colleges and universities, making it a leader in higher education. These notable learning institutions include MIT and Harvard University. 

FAQs

Conclusion

Massachusetts belongs to the list of states with high electricity rates. Thus, the average electric bill in Boston is higher than, say, Nebraska, where the per kWh price of electricity is significantly cheaper. 

However, Boston has so much to offer, which more than offsets the inflated electricity costs. Moreover, there are plenty of ways to keep your utility bill under control. One of these methods is by installing solar panels. Employing conservation measures will also mitigate the impact of high power rates on your budget. 

Updated on 03-28-23