If you’re considering going solar, you might be wondering if your utility will compensate you for pushing electricity you’re not using back onto the grid. These customers are only billed for the ‘net’ energy they use each month.
While Texas doesn’t offer statewide net metering, some utilities do offer it. Referred to as ‘buyback plans,’ solar consumers can receive either credits or monetary compensation. Municipal utilities and rural electric coops (regulated utilities) offer one kind of compensation. Private electric retail providers (deregulated utilities) offer another.
For both regulated and deregulated electricity markets, the value of the credit/payout is determined based on the net generation of the system; in other words, how much of the electricity produced by the system the homeowner did not consume directly, compensated at the retail rate for electricity…how much consumers pay for that electricity. With net-metering, the retail rate is calculated on a monthly basis.
For regulated buyback methods, each municipal utility or electric co-op has its own distinct buyback plan. Some may not have any. The city of Austin uses a Value of Solar (VOS) buyback plan. VOS measures the total amount of electricity generated by a system – not just excess generation – and credits the homeowner at a rate calculated by the city. In Austin, the rate takes into consideration energy savings, environmental savings, and savings from heightened grid stability as a result of the system. Find more information on specific municipal utilities or electric co-ops here.
For deregulated utilities, those buyback plans compensate the homeowner for net generation at the energy credit rate (retail rate minus delivery fees). Credit plans are either capped or uncapped (no limitation on the amount of electricity that will be credited). Deregulated markets alternatively use real-time metering payouts. In this plan, real-time metering payouts pay the homeowner for the amount of electricity they do not consume directly but put onto the grid. The retail electric provider pays the homeowner the retail rate for the electricity at the time of use. This is very similar to net-metering, but rather than using a retail rate on a monthly basis, the retail rate is applied at the time of use.
More detailed information on net metering options in Texas:
- “Net Metering in Texas.” NATiVE Solar, 21 Feb. 2023.
- “Texas Net Metering and Solar Buyback Programs.” Quick Electricity. Pressler Energy, January 4, 2023.
Thanks to our friends at NATiVE Solar for their input on this article.