Selling Excess Electricity Back to the Grid in Texas
As millions of Texans already know, solar panels produce clean and renewable electricity. Until recently, every kilowatt-hour of excess electricity was a kWh wasted, as there were no solar buyback plans in Texas. Now, thanks to improvements in state legislation, you can sell your surplus generation to your electricity company. Let’s read on and learn how you can benefit from excess generation.
What is a Solar Buyback Plan?
Energy deregulation in Texas has meant that all the retail electricity companies had to compete against each other to ensure that customers stay with them and stay loyal. One of the benefits of deregulation is the solar buyback or a special form of net metering that was introduced by Texas power companies. This program allows you to sell excess energy generated by your solar panels beyond limits imposed by net metering.
For this reason, many solar owners connected to the electric grid choose to install more solar panels, as this is a great way to save and maybe even earn some cash (usually by selling RECs). One of the ways to save is by installing a smart meter and opting for net metering with your retail electricity provider. In this case, all excess solar power goes to the power lines and powers nearby houses. When you need more energy than your solar panels can produce, you pull the extra power from the grid.
You only pay for the net difference unless you’ve produced more energy than you’ve consumed. In the opposite case, the excess energy is credited to your bill for later use and is rolled over month after month. A solar buyback plan goes beyond this and rewards you for your excess electricity. With some providers, you can even get a higher electric rate for your excess generation than the rate you pay for electricity.
Feed-in Tariffs are rates that your electric company pays for your surplus generation. Unlike a simple net-metering, which is concerned with generation and consumption only (and treats them equally), a feed-in tariff sets a monetary value on each kWh that you produce and do not use. In most cases, however, the electric company will pay less for solar generation than they charge you for electricity consumed. Nevertheless, there are companies that can pay you more as they may see fit based on your location and energy generation capacity.
Performance-based incentives are another type of solar reward. Texas solar energy is on the rise, and with it, so are different solar incentives. Performance-based incentives reward you based on your generation only. In this case, your power consumption could be even higher than the generation. This renewable buyback incentive ensures you get rewarded for helping tackle climate change and reducing the stress on the grid.
It is important to note that you can also combine these incentives with other solar tax credits, incentives, and rebates. The Federal ITC is the most generous one, giving back 22% of your investment in the form of tax credits. Furthermore, each state has its own rebates and solar incentives that you can benefit from.
How Does It Work?
As your solar panels produce electricity, some of it is consumed. Although you may not be home as this happens, your fridge, your freezer, and your AC, as well as the vampire energy consumption, all work their way to consume precious kWhs. The remaining power generated is then sent to the grid. Your smart meter measures both the electricity sent to the grid as well as the grid usage – the energy you take back from the grid.
As this happens, during the summer months, Texas solar owners produce more electricity than they can consume. The situation is different during wintertime when a typical household consumes more power than it delivers to the grid. For this reason, net metering programs exist. They will count both the energy spent and the energy produced so that you can pay only the net difference.
While some power providers give you 0.9 kWh for every 1 kWh you send to the grid to account for the expected 10% energy loss; others may give you a full 1 kWh back. This net metering is slowly becoming the norm as REPs (Retails Electricity Providers) noticed that the power produced by the solar owners is valued more than power coming from renewable energy sources. A part of the reason why is because this is green electricity, the energy of the future.
For this reason, some REPs have introduced solar buy-back rates, which enable power providers to buy electricity from your solar panels that you do not consume. This electricity is then sent and charged to other users, usually at a bit of a higher energy rate than you can expect to get for the same amount of power you produce. This way, the net metering program incentivizes renewable energy production; in other words, it limits climate change and enables the expansion of renewables.
How to Qualify for a Solar Buyback Program?
To qualify for a solar buyback program, you should start off by investing in solar panels. Although sometimes costly, solar panels provide clean electricity for more than 20 years after their installation. This electricity is also free, meaning that you will be able to save in the long run. As an average solar array takes some 4-12 years to pay off, this means that you will be saving money for at least eight years with a residential solar power system.
In most cases, your provider will ask that you have an interconnection agreement signed with the local utility. Another prerequisite is having a smart meter installed. Residential solar buyback programs are usually available for solar arrays with up to 50 kW of solar capacity installed. This means that most Texas households would qualify for a solar buyback program.
Texas Electric Providers with Net Metering
In most of Texas, you can choose your REP and your electricity plan based on your budget, how much electricity you consume, and, if you are a solar array owner, based on how much electricity you expect to generate. As not all REPs offer buyback plans to their customers, we did a bit of research to find out which REPs offer them. Here is a list of the top 8 Texas power providers who give a solar buyback plan:
|REP||Electricity Plan||Contract Term||Early Termination Fee||Base per Month||Import (kWh)||Export (kWh)||Additional Conditions|
|Austin Energy||Value of Solar (VoS)||0 Months||$200||$10.00||$0.097||N/A||N/A|
|CPS Energy||Net Billing||N/A||N/A||$8.75||$0.12||$0.02||less than 1 kWh|
|MP2||Solar Buyback||12-24 Months||$149||$0.00||$0.1230 + TDU||Wholesale Price||rollover enabled|
|Green Mountain||Renewable Rewards||12-36 Months||$250||$9.95||Import = Export Price||Import = Export Price||up to 50 kWh & no rollover|
|TXU||Renewable Buyback||0-24 Months||$295||$9.95||$0.1490 + TDU||less than Import (kWh)||available Feb - April|
|Reliant Energy||Solar Payback||24 Months||$295||$5.00||Import = Export Price||Import = Export Price||no rollover|
|EPE||Net Billing||N/A||N/A||N/A||N/A||$0.12||Min of $30 per Month Charge, & Up to 50 kW Installations|
Austin Energy, working in the city of Austin, Texas, offers the so-called Value of Solar (VoS) credits to their consumers. Unlike other REPs, Austin Energy gives you a preset amount of credit (usually $0.097 per kWh) of power for every kWh you deliver to the network. Then, this amount is deducted from your power bill at the end of the month, and you are left with the amount owed. They also offer $0.60 and $1 rebates for solar arrays under 75 kWh in size.
CPS Energy has a hybrid solar buyback plan. With this type of plan, your solar generation is credited at an equal rate to the rate you pay for all solar generation up to the consumption level. Any more electricity you send to the grid is credited at a lower rate, usually the wholesale price of electricity.
MP2 Oncor Electric Delivery and Centerpoint Energy customers have the benefit of a net metering program. The buyback rate is the same as the retail rate. MP2 enables rollover, but only until December when the credits are nullified.
Green Mountain Energy also offers a net metering program. This program is available for residential and commercial customers with up to 50 kWh of renewable generation capacity. Unlike other REPs, Green Mountain enables its net metering to be extended to wind power as well.
TXU’s net metering program offers buyback rates that are lower than retail rates. Although some may frown at this, this is actually a common practice among many REPs. There are month-by-month and 24-month services offered for customers in multiple utility service areas. TXU feed-in tariff changes depending on your utility area and the ZIP code, so make sure you contact the TXU local office and ask about the rates in your area.
Reliant also has a net metering program of its own. Under this program, you get the feed-in tariff that is the same as the retail price. However, Reliant Energy does not offer rollover, and there is no crediting your bill above the consumption level. Check availability in your area.
EPE (El Paso Electric) net metering offers solar buyback for up to 50 kW solar installations. With net metering in EPE, your bill can be reduced but never nullified: the company will still charge you a minimum of $30 per month. If you do not have a meter of a newer generation, you can ask for one, and it will be installed on your behalf.
City of Brenham
The City of Brenham also offers net metering. This program is available only on the city territory. The city offers credit at the full price up to the consumption level for that particular month, while any generation above that threshold is credited at a wholesale electricity price. This is still a great offer, as it can deduct a lot from your power bill.
Benefits of Solar Power
Installing solar panels and enjoying the benefits of solar power is a model that has been proven over and over again. The entire idea of having free and clean electricity while selling excess solar energy to the grid is as good as it gets. Let’s remind ourselves of some of the benefits of solar energy:
- Solar energy is free,
- Solar energy is clean,
- Solar panels need very little maintenance,
- Solar panels generate power for more than 20 years if installed correctly,
- Solar energy helps mitigate climate change,
- Solar energy reduces your carbon footprint.
Should I oversize solar system?
In some cases, you may want to oversize your solar system. Many new residential solar system owners choose to build a system that produces around 10-20% more solar power than they can actually consume. This way, the 1-3% drop in efficiency of your solar PV array is taken care of even before the system is installed, and you get a more robust solar energy system that will last you for decades to come. On the other hand, if you have a chance to sell your excess solar energy to a solar company or even your utility company, you can oversize your solar array well beyond your actual needs and ensure that you produce as much renewable energy as you can.
How profitable is solar farming?
Solar farming can be very profitable. Namely, every acre of land can bring in anywhere between $20,000 and $60,000 if it is covered in solar panels. Once you have this much land-producing solar power, you can also go for combined solutions. Some countries, such as Italy and Spain, have started investing heavily in Agri Voltaics – large-scale solar panel systems that cover agricultural land. In the shade of solar panels, their regular produce (such as tomatoes) can produce up to 30% more biomass than in direct sun – providing you with an additional revenue stream and a chance to still work on the arable land.
What is a good solar feed-in tariff?
A feed-in tariff is a monetary compensation that solar energy producers (including residential prosumers) get for all the excess solar energy that their solar panels produce. The excess power is sent to the grid, and this surplus electricity is then used to power other homes in your vicinity. A good solar feed-in tariff (FiT) is The best solar feed-in tariff in the USA is between $0.078 and $0.15 per kWh.
Where can I sell my SRECs?
There are platforms where you can sell both your excess solar energy and your Renewable Energy Certificates. In the latter case, SREC Trade, Knollwood Energy, and Sol Systems can all purchase your SRECs and pay you for them. As the SREC incentives are to be ending soon, it is probably best to hurry up with your solar installation and have a good solar buyback plan to help you pay off your solar panels faster. This way, you will be able to enjoy your energy-independent future much faster.
Whatever the reason you want to go with solar energy may be, you should be aware that many REPs in the Lone Star State offer solar buyback options. And while some of them offer to buy your excess kWhs at a price lower than retail, some give you full price for every kWh of electricity produced. For this reason, maybe you should consider installing a solar array that can generate more electricity than you need – you can always sell excess electricity.