Solar Buyback Programs and Net Metering Incentives in Texas
Solar power systems are a source of clean electricity, with simple maintenance needs and a typical service life of over two decades. The main challenge when using solar panels is managing their variable energy production: they generate electricity when sunshine is available, unlike a diesel generator that provides power on demand.
Electricity generation from a solar power system can exceed consumption at times, especially in homes that are empty during the day. Many energy companies have programs that reward solar PV system owners for surplus generation. These programs are varied, but their common purpose is making surplus generation more valuable for the client.
What Is Net Metering?
Net metering is normally used to handle surplus electricity from solar panels.
Every kilowatt-hour that is not consumed is sent to the grid, and deducted as credit from the next power bill.
Some energy companies give full credit, paying you the retail kWh price for extra production.
On the other hand, there are also companies that only give credit at the generation cost for them, not the full kWh price.
Net metering basically subtracts solar generation from electricity consumption, and you are only billed for the difference. If generation exceeds consumption, the rules change depending on the energy company: in most cases you get a credit that is rolled over to the next month, and in some rare cases they actually pay you for surplus energy.
Feed-in tariffs are rates that apply for surplus electricity exported to the grid. While net metering values consumption and generation equally, a feed-in tariff provides a different price tag for surplus generation. FITs are normally smaller than the retail kWh price, but utility companies may set them higher to incentive solar power in new markets. If the FIT and the retail kWh price are equal, you are basically getting net metering.
Performance-based incentives reward you based on generation, even if you don’t have surplus production. This means you get the incentive regardless of whether you consume or export the electricity generated.
Keep in mind that utility companies may create hybrid programs. For example, you may find a company that gives you full net metering for all electricity generation below your consumption, switching to a reduced feed-in tariff when paying balances in your favor.
Texas does not mandate net metering by law, but many Retail Electricity Providers (REP) and municipal power companies offer the benefit. This article will provide an overview of the main solar buyback and net metering programs in the state as of 2020.
Net Metering Programs from Retail Electricity Providers
In most regions of Texas, you can choose your electricity company thanks to deregulation. Some electricity plans are designed specially for consumers who own solar panels, and in many cases they can boost savings. Texas has dozens of electricity providers, and each of them offers multiple electricity plans. However, the following companies offer some of the best plans for solar panel owners:
ATG
Chariot
Green Mountain
MP2
Reliant
TXU
The following table summarizes the main electricity plans available from these companies for Dallas (Oncor) and Houston (Centerpoint).
REP
Electricity Plan
Solar kWh Purchase Price
Additional
Conditions
ATG
Texas Solar Homes
Same as the kWh retail price.
Credit is rolled over to the next month.
Chariot
Rise Solar
Same as the kWh retail price.
Credit is rolled over to the next month.
Green Mountain
Renewable Rewards
Same as the kWh retail price.
Credit is rolled over to the next month, 25 kW limit for solar power.
MP2
Solar Buyback
Wholesale price
Credit is rolled over to the next month.
Reliant
Simple Solar Sell Back
Same as the kWh retail price
Credit is rolled over to the next month.
TXU
Renewable Buyback
Lower than the kWh retail price
No buyback for net production May-January
Austin Energy Solar Buyback For Homes and Businesses
Austin Energy is the municipal utility of Austin, and they manage separate solar buyback programs for residential and commercial clients.
Residential energy consumers get a Value of Solar (VOS) credit for every kWh generated, at a rate of 9.7 cents/kWh. Since this incentive is for solar power generation, you get it for the full output of your photovoltaic system, not only for surplus production – the value is then subtracted from your total power bill. Austin Energy also offers a cash rebate of $2,500 for eligible home solar systems with at least 3 kW of capacity.
Since January 2018, commercial consumers also get the VOS credit. However, there are three possible values depending on the type of service and system capacity. The following table summarizes VOS credits for the commercial sector:
Does the client pay demand rates?
No
Yes
Yes
What is the solar PV system capacity?
Any
Less than 1,000 kW
1,000 kW or more
Applicable VOS Tariff
9.7 cents/kWh
6.7 cents/kWh
4.7 cents/kWh
In addition to the VOS credit, there is Performance-Based Incentive (PBI) for commercial clients with solar PV systems under 1,000 kW of capacity. The PBI program classifies clients into three tiers, and the incentive is calculated accordingly:
Small commercial and non-profit: Up to 75 kW
Medium commercial: Exceeding 75 kW, up to 400 kW
Large commercial: Exceeding 400 kW, below the PBI limit of 1,000 kW.
Once approved, a client gets the PBI for a 10-year term. However, the benefit only applies for customer-owned solar installations, and leased PV systems are only eligible if they are used by a non-profit organization.As of August 2020, the PBI rates are the following:
Small commercial and non-profit: 5 cents/kWh
Medium commercial: 4 cents/kWh
Large commercial: 3 cents/kWh
San Antonio: CPS Energy Net Metering
CPS Energy has a net metering program for energy consumers, with the following rules:
All electricity generation below the monthly consumption is credited at full price. For example, if a home consumes 500 kWh from the grid, and exports 450 kWh of surplus solar production, the bill is calculated for 50 kWh.
If electricity generation is higher than consumption, the surplus is credited at the avoided cost rate. This is the price that CPS Energy would have paid to get that electricity from power plants.
CPS Energy also manages a rebate program to help purchase solar power systems. The residential rebate is $2,500 per installation, with an additional $500 for using local solar panels. On the other hand, the commercial rebate is $0.60/watt up to 25 kW, and $0.40/watt for any capacity above 25 kW. In this case, the rebate for local solar panels is $0.10/watt.
Net Metering Programs in Houston and Dallas-Fort Worth
Unlike Austin and San Antonio, where a single municipal utility sets the rules for solar power, Houston and DFW have a deregulated market where electricity consumers can choose their provider. This section will focus on the main retail electricity providers (REP) with solar buyback programs: MP2 Energy, Green Mountain, TXU and Reliant.
MP2 Energy Net Metering Program
MP2 energy has a net metering program for the Oncor and CenterPoint service areas. All surplus generation from solar PV systems is credited at the retail price, and subtracted from subsequent power bills. The only drawback is that you cannot bank your credits indefinitely: if there is a balance in your favor after the October bill, the account is cleared. In other words, you can reduce your yearly power bill to zero, but MP2 Energy does not pay for accumulated credit.
Green Mountain Energy Net Metering Program
Green Mountain Energy offers a net metering program similar to MP2 Energy, where surplus generation is credited at the retail price, but in this case credits do not expire. The program is available if you have a bidirectional power meter and enroll in the Renewable Rewards buyback program. Net metering is available for both residential and commercial users, but there is a renewable generation capacity limit of 50 kW. In addition, the benefit applies for both solar and wind power.
This program is available for customers served by Oncor, CenterPoint, AEP and TNMP.
TXU Energy
TXU Energy offers the Renewable Buyback program, where you get credit for surplus renewable generation. Unlike the MP2 and Green Mountain programs, which give you credit at retail prices through net metering, TXU Energy offers a reduced feed-in tariff.
The retail price of each kWh changes depending on your service area, and so does the feed-in tariff. There are 24-month and month-by-month versions of the Renewable Buyback program, but you get a much better feed-in tariff with the 24-month version. TXU offers the Renewable Buyback program for customers served by Oncor, CenterPoint, AEP and TNMP.
Reliant Energy
Reliant offers the Simple Solar Sell Back plan, where you get net metering: surplus generation from a solar PV system is credited at the retail price. In addition, you get a 12-month price discount for electricity consumed from the power grid. This plan is only available in the Oncor and CenterPoint service areas.
El Paso Electric Company Net Metering
El Paso Electric (EPE) has a net metering program for solar power systems with up to 50 kW of capacity or 100% of consumption, whichever is smaller. If necessary, EPE will install a bidirectional power meter at no cost for the client.
All electricity generation below your monthly consumption is credited at the full kWh price. If solar generation is higher than consumption, you get credit for the surplus kWh at the avoided cost rate, and this credit is carried to the next power bill. Once the balance in your favor reaches $50, EPE will send a check.
City of Brenham Net Metering
The City of Brenham Electric Department also has a net metering program, similar to EPE. Solar generation below your monthly consumption is credited at full price, while surplus generation is credited at the avoided cost rate, which is reviewed and updated annually.
The City of Brenham municipal utility manages 119 miles of power lines and two substations, with over 6,900 electric accounts.
Final Recommendations
Solar buyback programs in Texas are as varied as the retail electricity providers in the deregulated market. Each company sets its own rules, and some offer better deals than others. If you are considering a solar PV system for your property, find an electricity plan that offers favorable conditions:
Look for net metering to get full credit for surplus generation. If you don’t have access to net metering, look for the best feed-in tariff available.
Check the conditions for surplus generation: Look for a plan where you can bank credits for subsequent power bills.
Some regions in Texas don’t have deregulated power, and you can only buy electricity from one company. However, net metering is available in some cities with a single power company, which include Austin, San Antonio and El Paso.
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