Have Solar Panels in Texas? Your Electric Plan Matters

Estimated read time 8 min read

The cliche is that everything is bigger in Texas, and that’s certainly true for the possibilities of solar power. For Texans interested in solar panels, there’s a complication those in other states don’t face: How does this affect your choice of an energy plan?

One option is a solar buyback plan. These programs allow homeowners to sell excess solar power and receive additional income or bill credits while reducing reliance on the electricity grid.

“If you buy a solar system, you should get dibs to use the electricity first. Any excess should be compensated through a competitive and transparent buyback program. This kind of plan can be great for the consumer,” said Sachu Constantine, executive director for Vote Solar, a solar advocacy group.

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While Texas offers numerous solar incentives and rebates, it lacks a formal statewide net metering policy. Instead, energy providers offer solar buyback plans as an alternative way to benefit from your investment.

What is a solar buyback plan?

Texas energy choice allows you to choose your electricity provider and plan. For solar owners, the power to choose means you can select a competitive solar buyback plan and benefit from extra electricity generated by your solar panels

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Solar buyback plans come with additional considerations compared to standard electricity plans in Texas. Read your electricity facts label (EFL) and all the plan details to maximize your return on investment. Here are key terms to know when comparing solar buyback plans.

Solar buyback plan key terms

Key term Description
Contract length Energy plan lengths typically range from six to 36 months. Consider a longer contract if you secure a low import and high export rate with preferable benefits.
Early termination fee (ETF) If you cancel your plan before the end of your contract, you will pay a fee unless you move outside of your provider’s service area. Fees vary by provider. Find the cost listed on your EFL.
Base charge You might pay this monthly fee regardless of your usage, or if your usage goes above or below a predetermined threshold.This fee varies by energy company.
Transmission and Distribution Utility (TDU) charges A fee to maintain power lines that deliver energy to your home. TDU charges vary by utility company. For example, Oncor charges $4.23 monthly plus 4.54 cents per kilowatt-hour (kWh).
Import The cost per kWh of electricity used from the grid.
Export The credit or payment you receive from selling excess solar generation to the electricity grid.

Is a solar buyback plan right for me?

Solar buyback plans are not suitable for every homeowner with solar. Consider the following to determine the best option for you.

Solar energy value

The export value determines how much you earn for surplus solar energy. Higher export rates mean more credits or payments, but the value of your contribution goes beyond the export rate.

“Solar owners provide more services than just the energy. Inverters, batteries or any other pieces of the system provide voltage control, peak load management, frequency regulation and a number of services that utilities typically pay for,” Constantine said. “As a solar owner, you’re now contributing to these services. It’s important not to settle for rock-bottom wholesale prices, which benefit utilities more than you.”

Solar buyback plan details

Not all plans are created equal. Details and restrictions will vary by provider. Some providers allow unlimited credits with no cap or expiration date, while others have an expiration date. Rates for exports also differ. Some providers pay retail wholesale prices while others have a set rate.

Consider your energy usage to find the best plan. If you would rather have more flexibility with credit usage, choose a plan that doesn’t have expiration dates. If you’re a night-time energy user, a plan with free nights may be preferable. Review the fine print details to fully understand each plan’s benefits for a well-informed choice.

Solar panel and electric bill costs

One of the main incentives for installing solar panels on your home is cutting electricity bill costs. Solar is an expensive investment. The export rate should fairly pay for your contributions to the grid and lower your energy bills to maximize return.

Constantine said, “Solar panels are good for at least 20 to 25 years. You know how much your system will produce and you’re getting a certain amount of money for the energy. The buyback program should at least compensate for what it costs you to buy and produce solar.”

Electricity usage

Solar buyback plans are not worth it for every solar owner, depending on how much energy you use. Traditional energy plans may be more cost-effective for high energy usage and solar battery owners.

“If they’re like me and know they can absorb all of the solar energy, and use it in a battery or an electric vehicle, traditional energy rates might be more cost-effective. The reason you look at a buyback is if you have a big roof, and there are times of the year when you lose a lot of energy so you want your solar system to be able to meet that. But there are other times of the year or the day when that’s too much capacity,” Constantine said.

“If you don’t use all the energy, solar buyback plans are an easy way to sell it back. If you’re not an electric vehicle owner or don’t have batteries, and the pricing of a traditional plan is better, go with a traditional plan.”

Sustainability contributions

By providing clean energy to the grid, you support clean energy initiatives in Texas to reduce the amount of fossil fuels used for electricity generation. Contributing to a more sustainable environment has more emotional than financial value.

“There’s an individual consideration. A belief that you’re doing something for the climate and resilience in the clean grid of the future. You can’t really monetize how good you feel about doing something for the planet,” Constantine said. 

Why does my electric plan matter if I have solar panels?

Unless you want an off-grid solar system, then you are still connected to the grid. While your reliance is significantly lower, you may still need help from time to time. Staying connected provides power during low sunlight periods or when your home needs more energy than your solar panels produce.

When this happens, you need an energy plan to provide electricity. Your energy choice determines how you use electricity from the grid — whether you sell energy back, store it in solar batteries, or rely on the grid for backup power. Choosing an energy plan complements your solar panel system so you keep power flowing to your home.

Net metering rules in Texas

Net metering credits homeowners for excess solar energy at the market rate, which can offset future utility bills. Some companies offer full retail rate credits for the excess energy, while others may offer lower rates or no net metering at all. Texas does not have a standard statewide net metering policy, so the options vary by provider. 

While the options are similar, solar buyback plans differ from net metering. With a solar buyback plan, you can sell excess energy to utilities, potentially receiving direct payments or bill credits. Providers compete to offer favorable import and export rates, allowing homeowners to choose the best plan.

If you have solar installed on your home and choose a traditional energy plan in Texas, you can choose to participate in net metering. If you don’t want to sell excess energy, consider solar batteries for energy storage. Batteries allow you to store the surplus electricity generated during the day for use at night or during periods of low solar production, supporting energy independence.

How to shop for an electric plan in Texas

With numerous energy plan options in Texas, picking a plan is challenging. Many sites like SaveOnEnergy and ChooseEnergy (both, like CNET, are owned by Red Ventures) make it easier by helping you search, compare and sign up for electricity in Texas. You can also use the state’s comparison tool, Power to Choose.

Start by entering your ZIP code on one of the sites listed. A long list of energy plans for your area will appear. Filter and sort available plans based on contract length, providers, renewable energy content and other preferences.

When you find a plan that fits your budget and energy needs, review the EFL for all of the plan’s details to understand the benefits. Take note of any hidden fees like an early termination fee or specific transmission and distribution charges.

Depending on benefits, the lowest rate option may not be the cheapest price overall, so reading the fine print is important to determine the best for you. For example, energy plans with a bill credit for usage may result in a lower rate after applying the credit, but the initial rate may appear higher.

Whether you choose a solar buyback or a traditional energy plan, investing in solar energy supports financial savings, and energy independence and contributes to a more sustainable future. Consider your electricity usage and ensure your energy plan benefits you. Evaluate the specifics, including contract length, export rates and any fees to make the most of your solar investment.

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