How do solar buyback plans work in Texas?

What "buyback" means

Your panels power your home first. When they make more than you use at that moment, the extra flows to the grid. That extra is called excess energy or exported energy.

A buyback plan sets a rate for each kWh you export. The provider uses that rate to calculate the rebate on your bill.

You still buy electricity from the provider when your panels do not cover your use, such as at night. So a buyback plan has two prices: what you pay for energy you pull in, and what you are paid for energy you send out.

Net metering vs buyback

Net metering usually means one-for-one credit: a kWh out cancels a kWh in. Texas has no statewide net metering requirement for retail providers. Where you can choose your provider, the PUCT says you shop for a plan with a buyback rate. City-owned utilities and co-ops set their own buyback rules.

Plans in Texas often call themselves "buyback" or "solar" plans, and they differ a lot. Read what the terms actually do rather than the plan name.

Credit vs cash

Most buyback plans pay in rebates. Terms vary, and these points are worth checking in the plan documents:

• Cash value. Some plans state that rebates have no cash value and cannot be transferred. If you cancel, leftover rebates may be lost.
• Rollover. Some plans roll unused rebates to the next bill. Others do not, or limit it.
• Caps. Some plans cap rebates at your monthly usage. Others pay for all exported energy.
• Rate type. A rate can be fixed for the term or tied to wholesale prices, so it can move.

None of this is a negative by itself. It just changes what a plan is worth to your system.

How buyback rates compare to retail

Your retail price is what you pay per kWh to buy power. The buyback rate is what you get per kWh sold. They are separate numbers, and they are often not equal.

On provider plan documents we reviewed in October 2026, published buyback rates ranged from 6¢ to 15¢ per kWh. A high buyback rate can come with a higher rate for the energy you buy. A lower buyback rate can come with a lower rate on purchases.

Which is better for you depends on how much you export versus how much you buy. A home that exports a lot may care most about the buyback rate. A home that exports little may care most about the retail price.

What to check on the EFL

The Electricity Facts Label (EFL) has a line that asks: "Does the REP purchase excess distributed renewable generation?" It is a yes or no. That line is the starting point, not the full answer. Then read the plan documents for:

1. The buyback rate, and whether it is fixed or variable.
2. Whether rebates expire, roll over, or have a cap.
3. Whether rebates can be paid out in cash or only applied to your bill.
4. The all-in price you pay for energy you buy at your usage level.
5. The contract term, the fees, and any early cancellation fee.
6. System size limits. Providers can set a maximum size for eligible systems.
7. Meter requirements. A meter that measures flow in both directions is typically needed, and the utility may charge for it.

Before you switch

Tell the provider your system is registered with your utility. The PUCT says the homeowner or installer must register the system with the local utility. A buyback plan will not work without the right meter setup.

Check your past exports on your bill or your utility portal. Use the real numbers to compare plans, not the system's estimates.