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Solar Buyback Plans: Comparing Your Options

Solar Buyback Plans: Comparing Your Options

Most energy generated by residential solar panels will be immediately consumed to power your home, but at some hours of the day, you may produce more power than your home needs. With a solar buyback option, you can put your extra energy back into the grid and earn credit toward the electricity you need when the sun isn’t shining or when your power demands are higher.

Three Main Types

It might seem simple, but every retail electricity provider (REP) calculates solar credits differently, which can make buyback programs one of the most confusing parts of owning a home solar system.

There are three main types of solar buyback plans -- index plans, retail plans, and discounted retail plans. Each one adds up the value of your surplus solar energy based on a different rate.

Solar energy conceptIndex Plan

For example, Champion Energy offers an index plan, based on real-time supply and demand. We credit you based on the actual wholesale market rate* for power in your region. In Texas, that means the value of your solar buyback credits can change every 15 minutes, as rates are adjusted by the Electricity Reliability Council of Texas (ERCOT). ERCOT uses price signals to balance electricity supply with actual demand. The price reflects the cost of the most expensive generator that is needed to fulfill the grid’s real-time demand.

We’ve made it easy to see the average buyback rates here.

Champion Energy’s solar buyback is available with any electricity plan. There are no extra monthly fees and no limit on how much surplus energy credit you can earn. Find the electricity plan that meets your needs with no mark up for solar. Plus, Champion automatically upgrades your account to earn solar buyback credits when you start producing surplus generation, so you keep your current plan and rate.

Retail Price Plan

In contrast, a retail price plan credits you based on the fixed rate you are normally charged for power. That rate is typically higher than what you get on an index plan, but retail price plans usually include a flat monthly fee paid to take advantage of the solar buyback option. The monthly fees may range from $4.95 to $24.95. Plus, they may include a cap, meaning you can only earn credit up to the total cost of your monthly bill or only up to the same amount of kWh you consume. For example, if you consume only 500 kWh and produce a surplus of 750 kWh your credit is only up to 500 kWh to match your consumption. Retail price plans have become harder to find.

Discounted Retail Plans

The third type of plan is a discounted retail plan. These also credit you based on a fixed rate, but that rate is lower than what you are normally charged for power. As with other fix-rate plans, discounted retail plans also may cap the total credits you can earn and charge a monthly fee to participate.

So how can you tell if an index, retail, or discounted retail plan is right for you? Know how much you expect as surplus generation and how much you will still consume. Plus, look at the Energy Facts Label (EFL). Specifically, look for items like Base Charge or Monthly Fee. Then, also look to see if there is a limit on what you can earn, such as a cap on cents per kWh or if you only get paid up to the same amount you pull from the grid.

Check out our complete Solar Buyback FAQs here.

*Please note the wholesale prices indicated by ERCOT are per megawatt hour (MWh), rather that kilowatt hour (kWh). To determine the price by kWh, just divide the price indicated by 1,000.