Bostonians tempted to light up their homes like the South Station may want to check their electricity costs first. Image source: GBCVB
Boston is an expensive place to power a home, with an average electricity price of 26 cents per kilowatt-hour in 2022.
The good news is that it’s possible to get electricity in Boston for much less:
- A home solar panel system in Boston can produce electricity for just 5 cents per kilowatt-hour.
- Electrical suppliers in Boston are currently offering electricity for as little as 10.8 cents per kilowatt-hour.
Read on to find out more about electricity costs in Boston; we’ll look at average monthly bills, compare local electrical suppliers, and discuss the economics of going solar for homeowners.
Key takeaways
- The average cost of electricity in Boston is $156.52 per month and $1,878 per year.
- Home solar power costs just 5 cents per kilowatt-hour, or just one-fifth the average cost of supplied power (26 cents per kilowatt-hour).
- Solar panels typically save Boston homeowners $68,073–$83,201 over 25 years and see a payback period of 3.5–4.5 years.
- Boston residents can sign up for an electricity supply that costs 10.7 cents per kilowatt-hour – less than half the current average price.
Electricity costs in Boston, Massachusetts
Here’s an overview of electricity costs in Boston in 2022:
Electricity rate in Boston (average): 26 cents per kilowatt-hour, or 26 c/kWh
- The average rate in Boston is 62.5% higher than the national average, which is just 16.0 c/kWh.
- It is 14.4% greater than the average cost in Boston one year ago (22.9 c/kWh).
- Boston residents also pay more than their counterparts in Philadelphia, New York City, and the New England region as a whole (18.5 c/kWh, 24.8 c/kWh, and 25.1 c/kWh respectively).
- The figures for Boston reflect average costs in the Boston-Cambridge-Newton metro area.
Monthly cost of electricity in Boston (average): $156.52
- This is based on the average residential usage of 602 kilowatt-hours a month for Massachusetts.
- A monthly electricity bill of $156.52 is 15.9% higher than the U.S. average, which is just $135.
- These figures are for electricity usage and exclude additional supply charges levied by the utility/electricity supplier.
Boston residential customers pay a lot more for each kilowatt-hour of electricity than homeowners elsewhere in the country ($0.26 vs $0.16).
Since their electricity rates are so high, Boston residents pay more for electricity each month than the average U.S. consumer ($156.52 vs. $135); this despite the fact that average consumption in Boston is lower than elsewhere (602 kWh vs. 893 kWh).
It's also worth noting the average usage figures include consumers living in apartments and multi-family dwellings. If you live in a single-family home, your average costs are likely a lot higher.
How to get the cheapest electricity in Boston
There are two ways to get cheaper electricity in Boston:
- Buy solar panels for your home
- Switch to a cheaper electricity supplier
While you can save money on electricity by choosing just one of these options, using a combination of the two will save you the most money.
1. Buying solar panels for your home
Solar panels are typically the cheapest source of electricity for homes in Boston.
Solar panel installations in Boston offer an incredibly high level of savings – on average between $68,073 and $83,201. This is mainly down to two factors: the Massachusetts SMART program (probably the most generous solar incentive program in the country), and the high residential electricity rates paid by customers here.
Let's look at a cost and savings breakdown for a modest 5.97 kW home solar panel system in Boston that can produce 7,454 kWh of electricity annually:
Solar panel costs in Boston
- Levelized cost per kilowatt-hour: 5 cents
- Cost per watt: $2.81
- Gross cost: $16,764
- Net cost (after incentives): $8,215
Solar panel savings in Boston (assuming a cash purchase)
- Payback period: 5.3 years
- Internal rate of return (IRR): 16.7%
- 25-year avoided electricity costs: $53,541
- Net savings over 25 years: $45,326
Solar panel incentives in Boston
- SMART Block Compensation Rate: $0.277723 / kWh
- Mass. energy credit: $1,000
- Solar tax credit: $4,792 (30% of purchase costs)
- Property tax on system: 0%
- Sales tax on system: 0%
If you consume more electricity than average – because you have a large home, or a large family – you could save even more money. The average system size installed in Massachusetts is 8.5 kW, and according to our calculations, a Suffolk County home with a monthly electric bill of $206 a month would save as much as $99,400 over 25 years.
That said, keep in mind that the solar costs and savings you’ll see for your home are dependent on many factors, including your roof orientation, your roof layout, and your energy usage patterns.
Learn more:
- What is Levelized Cost of Energy?
- Solar panel costs in Boston
- The 30% solar tax credit explained
- Solar incentives for Boston and Massachusetts
- The Massachusetts SMART program
2. Switching to a cheaper electricity supplier
Your other option to lower your electricity costs in Boston is to switch to the electricity supplier offering you the cheapest rate plan.
While Eversource is the electricity utility that delivers power across Boston, consumers can choose to buy their electricity from a number of different third-party electricity suppliers, known as "competitive suppliers".
Here are the cheapest electricity plans available to a Boston resident with an average monthly usage (602 kWh per month) living in the zip code 02199.*
|
Electricity supplier |
Cost per unit** |
Estimated monthly cost*** |
|
City of Boston Community Choice Electricity Program |
10.8 ¢/kWh |
$64.84 |
|
11.2 ¢/kWh |
$67.19 |
|
|
13.9 ¢/kWh |
$83.43 |
|
|
Constellation New Energy |
16.0 ¢/kWh |
$96.26 |
|
Basic Service (Eversource Energy) |
17.9 ¢/kWh |
$107.58 |
|
Think Energy |
18.4 ¢/kWh |
$110.77 |
|
Town Square Energy |
19.0 ¢/kWh |
$114.20 |
|
Boston average |
26.0 ¢/kWh |
$156.52 |
*As per a search on the EnergySwitch Massachusetts website (by Mass.gov) on 07/17/2022; EnergySwitch only displays costs for participating electricity suppliers.
**Costs rounded from three decimal places to one.
**Assuming the average monthly usage (602 kWh); actual costs will vary based on your usage
At the time of writing (August 2022), the City of Boston's Community Choice Electricity Program offers the lowest price of electricity: 10.8 cents per kilowatt-hour. In terms of electricity expenditure, the average electricity customer would save $92.02 a month (or $1,104.24 annually) on their total bills simply by switching to this plan.
If you're wondering what the difference is between the three Community Choice options, it's the level of renewable energy included in the mix: Optional Basic has 20%, Standard (the default option) has $30%, and Optional Green has 100%.
If you want to switch suppliers be sure to first shop around and compare rates, lock-in periods, monthly charges, and sign-up bonuses. Also bear in mind that you may have to pay a penalty or early termination fee to exit your current contract.
Electricity buying options in Boston
If you live in Boston, you can choose to buy electricity for your home in one of three ways:
- Basic service from Eversource: Basic service is where you buy electricity directly from your utility company, which in the case of Boston is Eversource Energy (formerly NSTAR).
- City of Boston Community Choice Electricity Program: This is a municipal aggregation program offered by the City of Boston in partnership with the electric supplier Constellation New Energy). Some residents were automatically enrolled in the service while others will have to sign up to join; you can learn more about the program here.
- Electric suppliers: Also known as competitive suppliers, these are licensed electrical suppliers that buy electricity from the utility at wholesale prices and then sell it onwards to consumers at retail rates. Here are some of the electric suppliers serving the Boston area:
- CleanChoice Energy
- CleanSky Energy
- Clearview Energy
- Constellation NewEnergy
- Direct Energy Services
- IGS Energy
- Major Energy Electric Services
- Provider Power Mass
- Residents Energy
- Smart Energy
- Think Energy
- Town Square Energy
- Verde Energy USA
Research by the Massachusetts Attorney General's office has found that during the period 2015–2020 consumers who switched to electricity suppliers from utility basic service faced much higher electricity costs.
That doesn't mean that all electric suppliers are expensive; some have offers that are much cheaper than average. Just remember the rates are subject to change (usually after six months or a year); so a supply contract that was great at the time of signing may now be costing you well above market rates. Use the Attorney General's findings as a reminder to regularly compare the market to be sure you're getting the best rate possible.
You should also consider getting solar panels. The incentives for solar in Boston (and Massachusetts as a whole) are so good – and electricity costs so high – that the economics of residential solar here is almost impossible to beat. Check your potential savings with a home solar panel system by using the Boston solar panel calculator below.
Ralph Baruth
SolarReviews Blog Author
Zeeshan is passionate about promoting renewable energy and tackling climate change. He developed these interests while studying at beautiful Middlebury College, Vermont, which has a strong focus on sustainability. He has previously worked in the humanitarian sector — for Doctors Without Borders — and in communications and journalism.