How Does a Buyback Work?
When your rooftop solar system generates more electricity than your home needs, the extra energy flows back to the grid for others to use. If you’re on a “buyback” electric plan, you can earn bill credits or even cash for that excess energy.
The table below lists all current residential buyback plans. Since rates and terms vary, it’s important to review the details and choose the plan that works best for your situation.
Don’t waste hundreds of dollars on the wrong plan. Keep reading to learn more or contact us if you have questions!
Daytime: Generating and Saving Energy
During the day, your solar panels actively generate clean electricity to power your home. Any energy you don’t use right away doesn’t go to waste – it’s automatically sent back to the power grid. In return, your utility company gives you credits (Think of credits as money) for that extra power, which are applied to your account. These credits help reduce or even eliminate your electricity costs when your panels aren’t producing.
Nighttime: Using Your Credits and Staying Powered
When the sun goes down and your solar panels stop producing electricity, your home seamlessly switches to using electricity from the grid. But instead of paying full price (whatever you’re paying for your electricity per kWh), your home uses the credits you earned during the day to offset these costs. If you’ve built up enough credits, you may not owe anything at all. However, once those credits run out, any additional electricity you use is billed at the regular grid rate.
In Short:
Day: You generate and use solar power – any extra earns you credits.
Night: You draw from the grid and use your credits first, helping keep your bill low.
This system, often called net metering, helps you maximize the value of your solar energy – saving you money and reducing your dependence on traditional power sources.
To keep things simple, we’re going to call the credits you earn for extra solar energy “buybacks.”
As stated on the last tab – when your solar panels produce more electricity than your home needs – especially during sunny days – that extra power is automatically sent back to the grid. In return, your utility company is supposed to “buyback” that surplus energy and give you credit toward your electric bill.
But here’s the catch: Not all companies BUY your electricity at the same rate that they sell if to you.
If you don’t have the right buyback plan, you might end up giving away your extra energy for free – or selling it back to the grid at a price so low that it doesn’t help much when you need to pull power from the grid at night.
As an example – let’s say that your energy company sells you electricity for $.16c/kWh, but when you produce electricity, they want to buy it at .05c/kWh… run.
A good buy back plan makes sure you’re fairly compensated for the excess energy you produce.
This means:
- You get real value for the solar power you contribute.
- You can use those credits to reduce or eliminate what you owe when your panels aren’t generating (like at night or on cloudy days).
- You avoid overpaying the utility company for electricity later.
In short:
- Extra power? You send it to the grid.
- Good plan? You get fair credits (buy backs) for that energy.
- No plan or bad plan? You risk giving it away too cheaply and paying more when you need power later.
Choosing the right buyback program is essential to maximizing the benefits of your solar system – and keeping your energy costs as low as possible. The next tab will talk about what to look for.
1. Buyback Rate:
Look for a plan that pays you close to the same rate you pay for electricity – this is called a 1:1 buyback, and it’s the best deal you can get.
With a 1:1 buyback, every extra kilowatt-hour (kWh) you send to the grid is worth just as much as the power you pull from the grid when you need it. This maximizes your savings and makes sure you’re getting the full value of the energy you produce.
2. Credit Limits:
Make sure to choose a plan without limits on how much credit you can earn. Some utility companies cap the amount of energy they’ll credit you for, which means you could be giving away free power once you hit that limit. The best plans let you build up unlimited credits, so you’re always fully rewarded for every bit of extra solar energy you generate.
3. Contract Terms:
Some buyback plans lock you into long-term contracts – sometimes for multiple years. While a stable rate can be good, you want to be sure the plan fits your needs and offers flexibility. Look for a plan that gives you options, so you’re not stuck in a deal that no longer makes sense if your energy usage changes or better plans become available later.
This is an example of a Great Buyback Plan. As of March 10, 2025 one of the best buyback plans we could find comes from TXU Energy. This may not ALWAYS be the case, so please check the account.
So, please make sure they have the right offer for you. Let’s look at the TXU Solar Buyback Match 36. What they offer us:
1:1 Buyback Rate
You sell and buy electricity at the same price – 12.7 cents per kWh.
This means every kilowatt-hour (kWh) you send to the grid earns you a full credit toward what you use later.
No Credit Limits
Every kWh you send to the grid earns a full credit – with no caps or limits.
You can maximize your savings by building up credits during high production months.
36-Month Locked-In Rate
Your electric rate is locked in for 36 months, protecting you from market fluctuations and rising energy prices.
This gives you predictability and stability in your energy costs for 3 years.
When choosing a solar buyback plan, your #1 goal should be to get as close as possible to a 1:1 buyback rate – meaning: The utility buys back your extra solar electricity at the same price they sell it to you.
Look for no credit limits, so you can sell back as much energy as you produce without restrictions.
Why does this matter?
A true 1:1 buyback ensures you maximize the value of every kilowatt-hour (kWh) your system produces. Without credit limits, you avoid giving away extra energy for free once you hit a cap.
In simple terms: You want a plan where every extra unit of electricity you generate is worth the same as what you would pay to use it – with no limits on how much you can earn.
Choosing a plan like this makes sure your solar system is working for you, helping to reduce your electric bill as much as possible.
If your utility won’t pay a fair rate for your extra solar power, a battery is a smart way to keep that energy working for you.
Here’s how batteries help maximize your solar investment:
Store Excess Energy for Nighttime Use
Instead of sending unused energy to the grid for little to no return, you can store it in a battery and use it when the sun goes down. This reduces – and in some cases eliminates – the need to pull electricity from the grid.
Lower or Eliminate Delivery Charges
By using stored solar energy instead of grid power, you can avoid AEP Delivery Charges, which are currently 5.877 cents per kWh. Over time, this can result in significant savings.
Backup Power During Outages
Batteries provide reliable backup power during outages, adding an extra layer of security and peace of mind for your home and family.
The Goal:
Produce, store, and use your own power – and avoid consuming from the grid whenever possible.
Batteries give you control, savings, and security, making them a valuable addition to any solar system, especially when buyback options are limited.
Battery Storage
If you can’t sell it, store it. Batteries store your excess energy for nighttime use, reducing your dependence on the grid. This can lower or eliminate AEP delivery charges of .5877 cents per kWh. Most importantly, it provides backup power during outages for added security. The goal is to NOT consume power from the grid.
