Net metering in Texas

Custom REP Report
SUN and Texas Power Guide have developed a model to compare the value of various buyback programs.

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. 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.

Thirty-eight states require utilities to offer net-metering. Texas is not one of them. (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). However, due to the state’s unique competitive energy market, prospective Texas solar homeowners have other options to access the benefits of net metering.

Solar buy-back programs

What can your payback period look like and which retail electricity plan maximizes your solar investment? That depends on your relative system size and usage timing.

Below are examples based on two different pre-solar retail electricity rates — 9.5¢/kWh and 12¢/kWh.

TX - No Buyback

No buyback: Best for using solar on-site immediately

If you have a smaller system, a standard or wholesale plan will offer the quickest payback.

TX - Realtime wholesale buyback

Realtime Wholesale: Can provide high value. Comes with more risk.

If you have a small to medium system, a Time of Use plan could speed up payback. Note: Your usage patterns affect this timeline.

TX - 1-1 energy buyback

1:1 buyback: Safest option for systems that cover most of your energy load

If you have a larger system, 1:1 energy buyback plans can provide the most value.


Notes:

  1. Electricity plan options as of 4/9/2020.
  2. Real-Time Wholesale (RTW) case (red dotted line) assumes prior year prices for reference only, as RT pricing changes every 5 minutes with market conditions and is NOT guaranteed.
  3. RTW case assumes use of home automation to shift 50% of load when RTW energy >10 ¢/kWh.
  4. 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)
  5. Average Texas residential electricity consumption (~15,500 kWh/year) per ERCOT.