How Do Texas Solar Buyback Programs Work? And Are They Worth It?

These days, the value of solar is no longer in question. While today’s technology is increasing our usage of solar generation, the cost of installing and maintaining solar installations is declining.

Still, there are many subtleties involved in deciding whether solar makes sense for you. Solar buyback programs allow you to sell excess solar power back to the grid, but are they right for you? The situation can be especially confusing for Texans, with the state’s unique energy market and power grid.

To clear up any confusion, we’ll discuss Texas solar buyback programs and how you might be able to use them to lower your electricity bill. But first, let’s get a refresher on where it all begins: the sun.

What Is Solar Energy?

The sun bombards the Earth with an amount of renewable energy that is truly staggering — it can meet all of humanity’s power needs for a year in just 90 minutes. If we effectively harness even a fraction of this resource, we could go a long way toward moving on from fossil fuels and increasing our use of clean energy.

But what would that process look like?

Photons leave the sun and travel to the Earth over the course of about eight minutes. Once they reach our planet, they hit a solar installation where they are either put to work or stored for later use. There are different types of solar installations, but the two most common are photovoltaics (PV) and concentrating solar power (CSP.)

Photovoltaics (PV) is the more familiar of the two. If you conjure up an image of a typical solar owner, you’ll likely be picturing someone with solar panels on their roof. These solar panels rely on photovoltaic cells to utilize the energy from sunlight to do useful work.

The other type, concentrating solar power (CSP), tends to be used in larger power plants. It relies on a system of mirrors that focuses sunlight in a concentrated form onto a receiver where it’s turned into heat that can then be used for electricity generation.

If you ever used a magnifying glass to light a piece of paper on fire when you were a kid (or an adult), it’s the same basic principle.

Solar’s Future Is Bright in the U.S.

Today, solar power remains a relatively small fraction (3.4%) of all utility-scale electricity generated in the United States. Still, according to the Solar Energy Industries Association, this fraction has been growing in recent years and there’s no reason to think it will stop growing any time soon.

The declining costs of solar power have driven much of this growth. It’s now a little over half as expensive to install a home solar system as it was a decade ago. As of 2017, the average price for utility-scale solar power had declined to just 6 cents per kilowatt-hour.

This, together with the fact that many electricity markets have incentives, like tax credits and rebates to encourage the use of solar power, has meant that many more companies and individuals are turning to the sun to meet their power needs.

What Is a Solar Buyback?

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Solar energy comes from the sun and is therefore intermittent. In other words, it’s not steady — it waxes and wanes throughout the day. Using solar means you don’t have the steady “always-on” energy of a fossil fuel like oil or natural gas. Under normal conditions, solar power peaks around noon and will be much lower early in the morning or at night.

Though there are downsides to this cycle, it can also carry certain advantages, particularly if you’re generating more power than you’re using.

If you find yourself with excess solar power, one option is to store it in a battery to be used when you need it later. But there’s another option: selling the surplus electricity back to the grid.

Texas Solar Buyback

In Texas, some retail electric providers (REPs) offer electricity plans in which you can sell back excess energy at a certain (usually reduced) energy rate, also known as a buyback rate. When these involve solar energy, they’re called solar buyback plans.

Solar buyback programs can work in a few different ways, depending on your provider. You might get paid directly for your excess power, but it’s more common for you to receive solar buyback credits that are part of a rollover to be used next month. If you use more power than you produce during the next billing cycle, these bill credits will be spent down. Otherwise, you could be paid for them.

Solar buyback programs are one way you can save on your electricity bill while switching to renewable energy. Depending on how much sunlight you get in a year and the size of your home, 30 panels could be enough to fully run your house on solar.

Solar Buyback vs. Net Metering

Solar buyback programs and net metering are often confused, but they’re not the same thing. With a solar buyback program, you’re generally remunerated for your excess solar power at a discounted rate, i.e., the energy charge for consuming power is less than what you receive for generating power.

With net metering, you’re charged the same fee regardless of whether you’re buying or selling solar power. The power company will monitor how much solar power you generate in real-time, and each kilowatt-hour produced will subtract a kilowatt-hour consumed off of your bill in a 1:1 ratio.

It would seem as if your energy meter were running backwards – and sometimes, it actually does! But don’t expect the utility company to mail you a check with a net metering system. That’s a feature of solar buybacks, not net metering.

Are There Texas Solar Buyback Programs?

Texas is famously unique in its approach to electricity markets. The state has a deregulated energy market, which means Texans have many options in choosing their retail electricity provider. Almost their entire grid is overseen by the Electric Reliability Council of Texas (ERCOT.)

Given this uniqueness, it’s natural to wonder how Texas solar buyback programs work. Can your Austin energy bills be lowered with a net metering program? Are there rebates for solar power in Dallas, Houston, San Antonio, or other major population centers?

The answer is: it depends on a lot of different factors, but by and large Texas is very friendly to solar power, and generates a little over 12% of all the solar power in the U.S.

Incentives to use solar power in Texas, including Texas solar buyback programs, tend to be extremely localized and offered through specific energy companies. CPS Energy, Green Mountain Energy, the City of Brenham, and others offer options for net metering while Guadalupe Valley Electric Cooperative offers rebates to help offset the costs of solar installations.

Check with local power companies to assess your options. That said, you might be eligible for a federal solar tax credit if you have solar installation on your home between now and 2034.

How Much Do Solar Panels Cost in Texas?

In May 2022, an average solar panel in Texas cost $2.69/Watt, and the average cost of installation varied from roughly $11,500 to $15,500, depending on the specifics of the installation size and difficulty.

How Much Money Can You Make Selling Solar Energy Back to the Grid?

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Homeowners with solar panels that produce excess electricity might be able to use a solar buyback program.

How much you can earn for this excess generation will depend on the electricity rate that’s part of your program. Generally, with solar buyback programs, you’re compensated for any surplus generation at a rate that’s lower than what you pay to consume electricity. If you can use a net metering policy, on the other hand, the two rates will likely be the same.

For Texas solar buyback options, be sure to check your retail electricity provider’s Electricity Facts Label for more details or call for more details.

FAQs About Solar Energy and Solar Buyback Programs

You might still have a few more questions about solar energy, solar buyback programs, and how all this works. In the next few sections, we’ll address common points of confusion. Let’s dig in.

Is Selling Solar a Good Idea? 

The value of selling solar back to the grid through net metering or a solar buyback plan will depend on the specifics of your circumstances. For instance, you might find that you never generate more power than you consume, or that your utility company simply doesn’t have that as an option.

That said, it’s hard to imagine there’d be any reason not to reduce your electric bill if you can. Though solar buyback isn’t always possible, it’s still worth checking to know your options.

For example, let’s say your utility company charges you 15 cents per kilowatt-hour, and they offer a net metering policy. If you use 10,000 kWhs in a month but manage to generate 3,000 kWhs in solar energy, you’ll only be charged for 7,000 kWhs. This would lower your bill from $1,500 to $1,050.

Is Being a Solar Sales Rep Worth It?

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Solar reps sell solar energy systems, like rooftop solar panels, on behalf of electric companies.

There are many reasons that being a solar sales rep could be worth it. First, there’s the fact that solar energy is a growing sector, and there will likely be an ongoing need for more solar sales reps in the future.

Then, there’s the salary, with some solar sales rep roles making over $100,000 a year. Even better, it’s often possible to do this remotely through cold calls and other outreach methods.

Finally, for the right type of person, contributing to the solar revolution is personally fulfilling.

Of course, it’s not for everyone. If you don’t enjoy spending your days talking to people or selling them on the benefits of solar power, then these roles likely wouldn’t be a good fit. But if you’re a self-motivated extrovert who enjoys the real-time back and forth of the sales process, it could be a great career.

Why Are Solar Companies Going Door-to-Door?

With solar becoming an increasingly popular way of supplementing or providing for a home’s power needs, renewable energy companies have begun sending out solar sales reps to pitch home installations to interested buyers.

You should be aware, however, that there are solar scams perpetuated by shady companies with bad products or hidden prices. Always do your research before investing in any company’s solar panels.

What Are The 11 States That Get Free Solar Panels? 

According to ADT Solar, there are many solar incentive programs — from solar renewable energy credits to rebates from the state government. However, there is currently no program from the federal government that offers free solar panels.

Texas Solar Buyback Programs — Are They Worth It?

There’s plenty of interest in solar power, and with a solar buyback program, you even have the option of selling your excess energy back to the grid.

But does it make sense for Texans? The answer is: it depends. Texas generates a great deal of solar power and there are many ways for residents of the Lone Star State to use more renewable energy. But there’s also a lot of variance in how plans are structured, so check with your local power company to see what options are available.

Learn more about clean energy and discover how you can lower your electricity bill by switching your electricity company.

All images licensed from Adobe Stock.
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