When you install solar panels, every kilowatt-hour you export to the grid earns you a credit on your bill. But not all utilities or retail electricity providers (REPs) pay the same rate — and the difference can mean hundreds of dollars per year. Understanding solar buyback rates is essential to maximizing the return on your solar investment. This guide explains how buyback rates work, what to look for in an offer, and how to compare plans using real data from markets like Texas, California, and New York.

What Is a Solar Buyback Rate?

A solar buyback rate is the price per kilowatt-hour (kWh) that your utility or REP pays you for excess solar energy you send back to the grid. This is distinct from net metering, which typically credits you at the full retail rate. In many deregulated markets, buyback rates are set by competition among REPs, and they can vary widely — from as low as $0.02/kWh to as high as $0.12/kWh or more. For a typical 8 kW system in Texas exporting about 800 kWh per month, a difference of $0.05/kWh amounts to $480 per year.

Key Factors That Affect Buyback Rates

Several factors determine the buyback rate you can get:

  • Market structure: In regulated states like California, buyback rates are set by the utility (e.g., NEM 3.0 pays about $0.08/kWh on average). In deregulated states like Texas, REPs compete for your business.
  • Time of export: Some plans pay different rates for energy exported during peak vs. off-peak hours. For example, a time-of-use (TOU) buyback might pay $0.15/kWh from 4–9 PM but only $0.03/kWh overnight.
  • Plan type: Fixed-rate buyback plans pay a flat rate for all exports. Indexed plans tie the rate to wholesale market prices (e.g., ERCOT real-time prices). Fixed-rate offers are simpler, while indexed plans can be volatile.
  • Minimum bill and fees: Some plans have a monthly fee or a minimum bill that reduces net savings. For example, a plan might offer $0.10/kWh but charge a $15/month fee, erasing the benefit for small exporters.
  • System size caps: Many utilities impose a size limit (e.g., 10 kW AC) for net metering or buyback eligibility. Larger systems may receive lower rates.

Comparing Buyback Rate Structures

Not all buyback offers are created equal. Here are the most common structures and how to evaluate them.

1. Fixed-Rate Buyback

You receive a fixed per-kWh credit for all exports, regardless of when they occur. Example: Green Mountain Energy in Texas offers a fixed buyback of $0.10/kWh on its “Clean Energy” plan. This is easy to understand but may not capture peak-time value.

2. Time-of-Use (TOU) Buyback

Export credits vary by time block. For instance, Reliant Energy’s “Truly Solar” plan pays $0.14/kWh from 4–9 PM and $0.04/kWh at other times. If you can shift your export to peak hours (e.g., by using a battery), TOU plans can be more lucrative.

3. Indexed / Wholesale Buyback

Your credit is based on the real-time wholesale market price, often with a small adder. Chariot Energy offers a plan that pays the ERCOT real-time price plus $0.01/kWh. These plans can yield high credits during scarcity events but are unpredictable. In 2023, ERCOT prices averaged $0.03/kWh but spiked to $5/kWh during winter storms.

4. Net Metering with Buyback

In some states, you first net your generation against consumption (net metering), and any excess is bought back at a lower “avoided cost” rate. For example, Duke Energy in North Carolina nets monthly and buys back excess at $0.06/kWh. This is less favorable than full retail net metering.

How to Evaluate and Compare Offers

Follow these steps to compare buyback plans:

  1. Know your export profile: Estimate how much you export each month and at what times. Tools like our guide to distributed energy economics can help model your production and consumption.
  2. Calculate net credits: Multiply your monthly exports by the buyback rate, then subtract any monthly fees. Example: 800 kWh × $0.10 = $80 credit, minus $15 fee = $65 net credit.
  3. Compare to retail rate: If your retail electricity rate is $0.12/kWh, a buyback of $0.10/kWh means you’re losing $0.02/kWh on every exported kWh. Ideally, the buyback should be close to or above your retail rate.
  4. Check for caps and terms: Some plans limit total annual credits or require a minimum consumption. Read the EFL (Electricity Facts Label) carefully.
  5. Factor in battery storage: Adding a battery lets you store excess solar and export during peak hours, increasing your effective buyback rate. See our article on battery sizing for home solar storage.

Real-World Examples of Buyback Rates

Here are representative offers from major REPs in Texas (as of early 2025):

  • TXU Energy: “Solar Buyback” plan — fixed rate of $0.09/kWh, no monthly fee, requires 12-month contract.
  • Reliant Energy: “Truly Solar 12” — TOU buyback: $0.14/kWh peak (4–9 PM), $0.04/kWh off-peak, $10/month fee.
  • Green Mountain Energy: “Pollution Free Solar” — fixed $0.10/kWh, no fee, month-to-month.
  • Chariot Energy: “Solar Saver” — indexed to ERCOT real-time price + $0.01/kWh, no fee, 36-month contract.
  • Octopus Energy: “Solar Plus” — fixed $0.11/kWh, $5/month fee, 12-month contract.

In regulated markets like California, NEM 3.0 offers an average buyback of about $0.08/kWh, but the rate varies by utility and time. For example, PG&E’s buyback under NEM 3.0 ranges from $0.05 to $0.15/kWh depending on the hour.

Tools and Resources for Comparison

To compare offers, use:

  • Texas Solar Buyback Plans (texaspowerguide.com): Lists REP plans with buyback rates and fees.
  • EnergySage (energysage.com): Compares solar quotes and buyback rates across installers.
  • Your utility’s tariff sheet: For regulated markets, check the utility’s net metering or buyback tariff.

Also, read our net metering explained article to understand how net metering differs from buyback.

Common Pitfalls to Avoid

  • Ignoring fees: A high buyback rate with a high monthly fee can be worse than a lower rate with no fee.
  • Overlooking contract length: Long contracts lock you into a rate that may become less competitive.
  • Not considering time-of-use: If you export mostly during off-peak hours, a TOU plan may pay very little.
  • Assuming all buyback is net metering: Many plans are not true net metering — they only credit exports, not offset consumption at retail rates.

How Buyback Rates Affect Solar Payback Period

The buyback rate directly impacts your payback period. For example, a 6 kW system costing $18,000 with a $0.10/kWh buyback might save $1,200/year, yielding a 15-year payback. If the buyback drops to $0.06/kWh, annual savings fall to $720, extending the payback to 25 years. Use our solar payback calculator to estimate your specific payback period under different buyback scenarios. Also compare solar payback vs. investment returns to evaluate solar as an investment.

Conclusion

Comparing solar buyback rates requires careful analysis of rate structures, fees, and your own export profile. In deregulated markets, shop around for the best fixed or TOU plan that matches your usage. In regulated markets, understand your utility’s tariff and consider battery storage to maximize peak-time exports. By doing your homework, you can ensure your solar investment pays off as quickly as possible.

Related Articles

  • The Complete Guide to Distributed Energy Economics
  • How to Calculate Solar Payback Period
  • Net Metering Explained
  • Battery Sizing for Home Solar Storage
  • Battery Sizing for Backup vs. Self-Consumption