Net Metering — Texas
Texas Electricity Glossary
Net metering is a billing arrangement where customers with rooftop solar systems receive a credit for excess electricity exported to the grid. Texas does not mandate net metering statewide — unlike many other states. In the deregulated ERCOT market, each REP sets its own solar buyback credit rate and terms, meaning the financial return on solar varies significantly depending on which REP you choose. Texas solar homeowners should evaluate REP solar buyback plans carefully — the credit rate can be the deciding factor in a solar system's payback period.
How Texas Solar Buyback Works
Your rooftop solar system connects to a smart meter that measures both electricity imported from the grid and electricity exported to it. When your panels generate more than your home currently consumes, surplus electricity flows out through the meter and is tracked by your TDU. Your REP then applies a credit to your bill for that exported energy.
The credit rate — called the solar buyback or avoided cost rate — is set by your REP and disclosed in your plan terms. It can range from the full retail rate to a very low wholesale rate.
Net Metering vs. Solar Buyback in Texas
True net metering (used in many other states) credits exported solar at the full retail electricity rate — the same rate you pay for imports. In Texas, most REPs offer a separate "solar buyback" rate that may be lower than your import rate. This is a key distinction: in a true net metering state, you effectively "run the meter backward." In Texas, you're selling at one price and buying at another, often less favorable, rate.
Choosing a REP as a Texas Solar Owner
Several Texas REPs offer solar-specific plans with competitive buyback rates. When comparing:
- Find the solar buyback rate (cents/kWh for exported energy)
- Compare your import rate (the rate you pay for grid electricity)
- Estimate your expected export volume based on system size and usage
- Calculate net annual benefit: (export kWh × buyback rate) − (import kWh × import rate)
A REP with a higher buyback rate but slightly higher import rate may be better or worse overall depending on your solar-to-grid usage ratio. Model both directions before choosing.
Non-ERCOT Areas: Municipal and Cooperative Utilities
Austin Energy and CPS Energy — the municipal utilities serving Austin and San Antonio — do have their own net metering and solar buyback programs outside the ERCOT deregulated market. These programs are set by the utility and city council rather than by competitive REPs. If you are in Austin or San Antonio, contact Austin Energy or CPS Energy directly for current solar buyback terms.
Related Terms
- REC — another way REPs participate in renewable energy markets
- Smart Meter — required to measure solar export for buyback credits
- Deregulated Electricity — explains why Texas net metering is REP-determined rather than state-mandated
- REP — sets solar buyback terms in the ERCOT deregulated market
Frequently Asked Questions
Does Texas have net metering?
Texas does not have a statewide net metering mandate. Instead, the deregulated ERCOT market allows individual REPs to set their own solar buyback credit rates. Some REPs offer generous credit rates (close to the retail rate); others offer very low wholesale-level credits. This is one reason why REP selection is particularly important for Texas solar homeowners — the buyback terms vary dramatically between providers.
How does solar buyback work in Texas?
When your rooftop solar system generates more electricity than your home is currently consuming, the surplus flows into the grid through your smart meter. Your REP credits your account for this exported electricity at the rate specified in your solar buyback plan. The credit appears on your monthly bill and reduces what you owe for electricity you import from the grid at other times.
What solar buyback rate can I get in Texas?
Texas solar buyback rates vary widely. Some REPs offer credits at the full retail rate (approximately 8–14¢/kWh), making solar very financially attractive. Others offer wholesale-level rates (2–5¢/kWh), which significantly extends the payback period on your solar investment. Always compare the buyback rate alongside the plan's energy charge rate when evaluating solar plans.