If you install solar panels on your home, you’ll likely produce more electricity during sunny days than you actually use. So what happens to all that excess solar power your efficient panels are generating? That’s where energy buyback plans become important to understand. Also known as net metering programs, energy buyback plans allow you to sell surplus electricity back to the electric grid in exchange for credits, cash payments, or savings on your monthly bills.
In this in-depth guide from your neighborhood solar experts at North Texas Solar, we’ll share exactly how energy buyback plans work and the different types of programs available from energy providers. Read on to make sure you maximize savings and compensation for your rooftop solar energy system.
When your solar panel system generates more electricity than you need in your home during any given billing cycle, your smart inverter feeds the unused solar power back into the electric grid. This is all handled automatically and seamlessly through your net metering connection.
The value and payment method for that electricity you contribute varies between different buyback plans from providers. On your billing statement each month, you’ll receive compensation in the form of credits, offset charges, or even direct cash payments that make up the payment for the clean solar energy you exported to the grid.
Then, when the sun isn’t shining as brightly at night or on cloudier days, you can draw power back down from the traditional electric grid as usual to meet your household usage needs. By being connected to net metering, you can leverage both your own solar supply and grid electricity on demand.
Now that you understand the basics of how energy buyback arrangements work, let’s explore the most common options for net metering programs that energy providers offer. We’ll describe how each plan type factors into your bill credits or additional income from your rooftop solar panel system. Keep in mind that your local municipality or state may have specific buyback plans, so use this overview as a general basis for these types of solar power programs.
With time-of-use plans, the rate you are paid per kilowatt-hour for electricity exported back to the grid depends on when your solar energy is actually fed into the grid. Times of peak energy demand often receive the highest compensation rates. Check the peak hour windows for your utility’s specific time-of-use net metering program.
Some buyback plans issue direct cash payments for your solar energy exports at a fixed rate per kilowatt-hour. This simple dollar-for-dollar style compensation is easy to understand. Just be aware that the rate per kWh is often lower than wholesale plan rates.
Wholesale rate plans offer dynamic compensation rates based on the utility’s own avoided costs of having to acquire alternate wholesale electricity from generators like power plants when rooftop solar customers deliver surplus clean power to the grid instead. Rates fluctuate but can result in attractive payments.
Finally, rollover credit plans issue bill credits when you export solar electricity back to the grid. If you generate more kWh credits than you actually use from the utility during the monthly billing cycle, that balance conveniently rolls over to help offset your future electric charges at full retail energy rates. This protects solar customers from losing unused solar compensation.
As you can now appreciate, homeowners with grid-tied solar panel systems have a variety of options when it comes to net metering programs and selling excess solar energy production back to your utility company.
To determine available plans in your area, actual payback, and maximize energy bill savings, connect with one of our solar energy advisors here at North Texas Solar today for a free analysis. We can help you make sure your rooftop solar system participates in the optimal net metering buyback plan.
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