Last Updated on April 28, 2022 by Mary Pressler

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 (REPs) and municipal power companies offer the benefit. This article will provide an overview of the best solar buyback and net metering programs in the state as of 2022.

Residential 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 light companies offer some of the best plans for solar panel owners:

  • Chariot 
  • Green Mountain Energy
  • Infuse
  • MP2 Energy
  • Octopus
  • Reliant
  • Rhythm Energy 
  • TXU

Compare Solar Buyback Plans in Texas

The following table summarizes all Texas solar buyback plans.

Electricity Provider Electricity Plans with Solar Buyback Solar kWh Purchase Price Additional Conditions
Chariot Rise Solar Same as the retail kWh price. Credit is rolled over to the next month, never expires.
Green Mountain Energy Renewable Rewards Same as the retail kWh price. -Available for solar power systems below 50 kW.

-Maximum credit is your monthly usage (no rollover).

Infuse Lean Green Infusion Same as the retail kWh price. Maximum credit is your monthly usage (no rollover).
MP2 Energy Solar Buyback Wholesale price. Credit is rolled over to the next month, resets to zero once per year in December.
Octopus OctoPlus Wholesale price. Credit is rolled over to the next month, never expires.
Reliant Solar Payback Same as the retail kWh price. Maximum credit is your monthly usage (no rollover).
Rhythm Rooftop Solar Buyback 12 Same as the retail kWh price. -Available for solar power systems below 20 kW.
TXU Renewable Buyback Feed-in tariff below the retail kWh price. No buy back for surplus solar generation between May and 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 getting the Value of Solar (VoS) credit, commercial electricity consumers with solar arrays can choose one of the following incentives:

  • Performance-Based Incentive (PBI) – The solar PV system gets a credit for each kilowatt-hour generated, during five years.
  • Capacity-Based Incentive (CBI) – The solar PV system gets an upfront incentive, which is calculated based on installed capacity.

These incentives change depending on the type of electricity consumer and the capacity of the solar array, according to the following table:

Type of Customer PBI CBI
Nonprofit organization Not available $1 per watt DC, up to $400,000
Commercial user with a solar installation below 75 kW 9 cents/kWh $0.60 per watt DC
Commercial user with a solar installation over 75 kW, up to 400 kW 9 cents/kWh Not available
Commercial user with a solar installation from 400 kW to 999 kW 7 cents/kWh Not available
Commercial user with a solar installation larger than 1 MW 5 cents/kWh Not available
Austin Energy

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 is increased by $0.10/watt when using local solar panels.

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: Rhythm, MP2 Energy, Green Mountain, TXU and Reliant.

Rhythm Energy Texas Residential Solar Buy Back

Rhythm Energy has a popular solar buyback plan for Texans that allows for a one for one kWh rate. The Rooftop Solar Buyback Plan is a 12 month contract with a fixed energy rate. This means your rate stays the same, no matter what the Texas electricity market does.

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 December 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 you cannot accumulate credit above your consumption (no rollover to the next month). 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 Solar Payback plan, where you get net metering: surplus generation from a solar PV system is credited at the retail price, up to your monthly consumption. 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, which practically covers all residential systems. Electricity is credited at the retail price, and you can reduce your power bill to a minimum of $30 per month. EPE will pay you for any accumulated credits once per year, but the maximum amount is 10% of the consumption you had before going solar. 

If necessary, EPE will install a bidirectional power meter at no cost for the client.

Net Metering Programs in Lubbock Texas - Solar Buy Back Plans Lubbock Power and Light Net Metering

Currently, Lubbock is in the process of joining the ERCOT power grid. Lubbock Power & Light connected 70% of their system to ERCOT in May 2021, and the remaining 30% will connect by May 2023. Once LP&L has fully joined the deregulated electricity market, Lubbock citizens will be able to choose their retail electricity provider. In the meantime, LP&L will continue operating as their provider.

LP&L has a net metering program for solar power systems, but the company has not explained what will happen when Lubbock is fully connected to the ERCOT grid. LP&L will most likely remain as the default electricity provider for customers who don’t choose another one, and their net metering program can be expected to remain available. Lubbock consumers who choose other providers will be subject to their respective net metering conditions.

  • To join the LP&L net metering program, your solar panel system must first get a permit from the City of Lubbock Building Inspection Department.
  • LP&L will then add your account to their net metering program, after installing a suitable power meter for your property.
  • The LP&L net metering program is available for solar power systems up to 10 kW.

LP&L offers net metering up to 100% of your consumption, and there is no credit for surplus production above your monthly consumption. However, LP&L offers another incentive: homeowners with solar panels have access to lower kilowatt-hour prices when using the grid. The best strategy is installing a solar power system that generates less electricity than what your home consumes, and purchasing the difference from LP&L at discounted price.

The kilowatt-hour prices charged by LP&L for electricity consumption that is not covered by your solar panels are extremely low. These kWh prices are only available for solar owners in their net metering program:

Time of the Year kWh Price for LP&L Net Metering Customers
Summer months, June – September $0.01292/kWh up to 1,000 kWh

$0.02349/kWh for consumption over 1,000 kWh

Non-summer months, October – May $0.00397/kWh up to 1,000 kWh

$0.01175/kWh for consumption over 1,000 kWh

The LP&L net metering program is unusual, but beneficial for homeowners. This program rewards solar panel systems that are properly sized, with net metering up to 100% of your consumption and a low kWh price for consumption not covered by your solar panels. However, oversized solar power systems get no rewards for generating electricity above your consumption, and there is a 10 kW capacity limit.

If you live in a home with solar panels in Lubbock, and you plan to switch your electricity provider when the market opens, check their net metering conditions. Make sure your next electricity provider offers a solar buyback program in Lubbock, or you may no longer get credit for surplus generation. In this case, you would be forced to switch your electricity plan again, or install a battery system.

Xcel Energy: Net Metering in Amarillo

Amarillo and most Panhandle cities are not connected to the ERCOT grid, and instead they get electricity from the Southwest Power Pool (SPP). Unlike the ERCOT grid, which is completely inside Texas, the SPP crosses several states and is subject to the Federal Energy Regulatory Commission (FERC). Homes and businesses in Amarillo get their electricity through the SPP grid from Xcel Energy, who offers a net energy metering program.

Xcel Energy measures surplus generation from solar panels, subtracting it from your monthly power bill at the full retail price. If electricity generation from your solar panels is higher than your consumption, they offers two options:

  • Rolling over your credit each month until you need them.
  • Getting a cash payment for surplus production.

Xcel Energy offers an excellent net metering program, but your solar PV system cannot generate more than 120% of your consumption. In other words, there is a limit to how much you can get paid by Xcel Energy. At most, you will be able to cover 100% of your consumption and get a credit equivalent to 20% of your consumption. There is an upfront interconnection fee of $100, but you gain access to a net metering program that credits you the full value of solar power sent to the grid.

Xcel Energy customers in Amarillo can also accumulate Renewable Energy Credits or RECs for solar generation. You get one REC for every 1,000 kWh generated by your solar panels, and these credits can then be sold to organizations with renewable energy obligations. In simple terms, one REC is the proof of having generated one megawatt-hour (1,000 kWh). They are purchased by companies who are subject to clean energy mandates, but there are also organizations who purchase them voluntarily.

Brownsville Public Utilities Board Net Metering

The Brownsville Public Utilities Board provides electricity for nearly 50,00 residential customers and more than 6,300 commercial customers. To serve its clients, Brownsville PUB uses a combination of direct-ownership power plants and electricity purchases in the wholesale market. As of April 2022, they charge the following electricity rate for residential consumers:

  • $6.94 fixed customer charge
  • $0.05420/kWh up to 500 kWh
  • $0.07688/kWh for consumption over 500 kWh
  • Variable fuel and purchase energy charge (FPEC), $0.04055/kWh as of April 2022
  • In other words, the first 500 kWh are billed at $0.09475/kWh, and the price increases to $0.11743/kWh for consumption over 500 kWh.

Brownsville PUB has a net metering program for solar panel systems and small wind turbines. Both system types must be approved by the City of Brownsville Building Permit Division, and surplus electricity is credited at the Fuel & Purchase Energy Charge (FPEC). There is an upfront fee of $100, which covers the cost of upgrading to a bidirectional power meter.

Net Metering Programs in Beaumont, Texas Entergy Texas: Net Metering in Beaumont

Entergy Texas provides electricity for several eastern cities, including Beaumont. The Entergy service area is covered by the Midcontinent Independent System Operator (MISO), which operates across state borders subject to FERC regulation. MISO is independent from ERCOT, which operates completely inside Texas without federal regulation.

Entergy Texas classifies solar power systems into small qualifying facilities (SQF) and large qualifying facilities (LQF) depending on their installed capacity, and this determines the net metering conditions offered by the company.

  • Generators with a capacity up to 100 kW qualify for Schedule SQF.
  • Generators over 100 kW qualify for Schedule LQF.
  • Schedule SQF has special conditions for generators below 50 kW using renewable sources like solar energy, wind energy and biofuels.

Entergy Texas offers net metering under Schedule SQF, but surplus electricity production is credited at their avoided cost, not the full retail price. This avoided cost is calculated as an average of peak and off-peak rates, based on the latest annual filing with the Public Utility Commission of Texas (PUCT). Consumers under Schedule SQF may also qualify for capacity payments as a class, but only if their generation systems reduce capacity costs for Entergy.

  • If your solar generation is higher than your consumption, and the balance in your favor is higher than $50, Entergy will send you a check.
  • If your credit is lower, it will be rolled over to the next month until the balance reaches $50.

Schedule SQF has a monthly charge of $12.35 for customers with a delivery voltage below 2,400 V, and $22.65 for customers between 2.4 kV and 34.5 kV. However, customers with bidirectional power meters and renewable energy systems up to 50 kW of capacity are exempt from this charge.

Schedule LQF (>100 kW) also includes solar buyback, but Entergy Texas calculates the kilowatt-hour price paid to each customer independently. To determine the monthly avoided cost, Entergy uses energy settlement data provided by the system operator (MISO).

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 solar 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 rate available.
  • Check the conditions for surplus generation: Look for a plan where you can roll-over 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.

Solar Buyback Programs for Commercial Properties

For information regarding net metering incentives for commercial buildings, we recommend ProStar Energy Solutions. From conception to installation, Pro Star Energy consultants can manage your corporate solar project and make sure you get the maximum payout from your panels.

Read more about commercial net metering in Texas and the United States.

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