Earning bill credit for excess solar generation in Texas

Custom REP Report
SUN and Texas Power Guide have developed a model to compare the value of various buyback programs for those that choose their Retail Electricity Provider.

When your solar system produces more electricity than your home uses, say during the day when you’re away from home, the excess electricity is sent out through your electric meter to be used by your neighbors. In most places, solar homeowners receive a credit on their monthly utility bill for this excess electricity their system produces. When the excess generation is credited at the same rate as the customer’s consumption this is known as net metering. It ensures solar homeowners receive fair credit for the electricity their systems generate and helps them see a return on their investment into solar.

Net metering policies are enacted at the state level. Thirty-eight states require utilities to offer net-metering. Texas is not one of them. However, due to the state’s unique competitive electricity market, prospective Texas solar homeowners have other options to access the benefits of net metering. If you live in a municipal-owned or rural electric cooperative utility-service area, check with your city or cooperative about their net-metering program. Many municipal utilities and electric cooperatives offer credit for excess generation; if yours does not, or if you are unsatisfied with the rates, these publicly managed utilities should be responsive to your concerns. Check out these resources for advocating within a muni or co-op.

Solar buyback programs: Considerations if you can choose your Retail Electricity Provider

What can your payback period look like and which retail electricity plan maximizes your solar investment? The answer to that question depends on your system size relative to your home’s energy demand, as well as when you use electricity over the course of the day. If you’ve had solar for at least a year and want a custom report to show which retail electricity plan maximizes your solar value, consider becoming a Solar United Neighbors Solar Owner member. Membership includes one custom report a year.

(Looking for a listing of buyback plans? Check out the list maintained by Texas Power Guide.)

Below are example, simple payback rates based on two different, pre-solar retail electricity rates — 9.5¢/kWh (orange line) and 12¢/kWh (yellow line).

TX - No BuybackNo buyback: Best for using solar on-site immediately

If you are a solar owner who uses most of the energy you generate directly in your home, and export around 20% to 40% or less of what you import, a standard or wholesale plan will offer the shortest payback.

* The orange and yellow lines in the graph represent two different pre-solar electricity rates; the yellow line indicates the average price that people pay for electricity in TX (12¢/kWh), while the orange line represents the lowest electricity rate someone could expect to pay after shopping around for different, pre-solar plans (9.5¢/kWh)

TX - Realtime wholesale buybackRealtime Wholesale (RTW): Can provide high value. Comes with more risk and a need to monitor WHEN you are using electricity.

If you are a solar owner who exports around 40 to 60% as much energy as you import, a RTW/Time of Use plan could speed up payback. Note: Your electricity usage patterns affect this timeline.

* The orange and yellow lines in the graph represent two different pre-solar electricity rates; the yellow line indicates the average price that people pay for electricity in TX (12¢/kWh), while the orange line represents the lowest electricity rate someone could expect to pay after shopping around for different, pre-solar plans (9.5¢/kWh)
TX - 1-1 energy buyback
1:1 buyback: Provides most value for homes that are importing and exporting significant energy loads

If you export at least 60% as much electricity as you import - as opposed to using that energy directly in your home when your system is producing it - a 1:1 energy buyback plan can offer the safest return on investment. 1:1 buyback plans provide a kilowatt-hour (kWh) credit for solar energy you export to the grid that’s equal to the same rate you pay for using a kWh from the grid.

* The orange and yellow lines in the graph represent two different pre-solar electricity rates; the yellow line indicates the average price that people pay for electricity in TX (12¢/kWh), while the orange line represents the lowest electricity rate someone could expect to pay after shopping around for different, pre-solar plans (9.5¢/kWh)

Notes:

  1. Electricity plan options as of 4/9/2020.
  2. “Export as a % of Import” means the percentage of electricity you generated and exported to the grid vs. how much you imported from the grid. Example: If you import 1000 kWh each month (you pay for them), 40% export means in that same month you sent back 400 kWh of solar energy to the grid (back through your meter). This value depends on both when you make solar energy AND when you use electricity in your home.
  3. Real-Time Wholesale (RTW) case assumes prior year prices for reference only, as Real-Time pricing changes every 5 minutes with market conditions and is NOT guaranteed.
  4. RTW case assumes use of home automation to shift 50% of load when RTW energy cost >10 ¢/kWh.
  5. Assumptions for simple payback include: $2.75/Watt install cost, 26% Federal Tax Credit, Solar output per NREL PVWatts (Houston roof-mounted array, 180° azimuth, 20° tilt, 20% system losses)
  6. Average Texas residential electricity consumption (~15,500 kWh/year) per ERCOT.
  7. All analysis depicts typical, pre-pandemic (COVID-19) electricity consumption patterns