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Studies have shown that about 3.2 million homes in the United States have installed solar panels. With solar panels becoming more popular, it’s critical to understand how some of its benefits work.
One of the greatest drawing points of solar panels is the solar buyback program. But how does solar buyback work, and how can homeowners take advantage of their excess solar power?
If you’re curious to learn more about what happens to your excess electricity, we’re here to help. Read on to learn more about solar buyback plans and how they work. We’ll also look into some of their benefits and the ways you can improve your buyback profits.
What is a Solar Buyback Plan?
A home with solar panels is generating electricity for as long as sunlight is active on the panels. However, that doesn’t mean that all that electricity is being used.
If your home is full of people who work during the day, your home may be consuming very little energy during work hours. As the home is empty, lighting, entertainment systems, water heating, air conditioning, and many other amenities are used less frequently. The result is a home that’s generating electricity without that power being used.
When this occurs, the excess electricity will flow into your local power grid. That power is then sent around to your neighbors rather than going to waste. Your electricity company won’t have to send power for the quantity your solar panels produce.
A solar buyback plan purchases this excess energy, crediting the homeowner in a variety of ways. Closely related to net metering, this can result in credits, a lower bill, or a flat reduction in your expenses.
How Does Solar Buyback Work?
How is solar power measured, and what are the different buyback plans? Solar buyback plans don’t use a single flat amount. Instead, there are many factors at play.
Here are some of the most important factors in how solar buyback plans function.
Net Energy Metering
Net Energy Metering, or NEM, is the most common buyback plan. Net metering credits solar panel owners for every kilowatt-hour (kWh) of exercise energy they generate.
The credits are typically applied to the generator’s bill and last for up to 12 months. However, plans can vary by the electricity company and other factors. Make sure you’re familiar with your company’s buyback and net metering plan before you sign up.
The primary advantage of net metering is that you can use your credits year-round. As such, it provides relief during winter months when your bill is higher from keeping the heat on. You’ll also save money on your energy bill and keep the retail value of your excess energy.
Feed-In Tariff
A feed-in tariff is another buyback plan that can offer more variety. Feed-in tariffs, or FITs, sell excess energy back to the grid at a wholesale rate.
FITs are only available in select states, and not all electricity companies offer them. These tariffs can provide an extra stream of income for solar panel energies.
You’ll earn extra money on top of your already-existing savings from using your solar panels. Any excess energy you produce will be paid regardless of if you use it. In total, FITs can have more of a profit than net metering for people with large solar systems.
Value of Solar Tariff
Another form of the tariff is the Value of Solar Tariff, or VOST. These tariffs take the environmental and societal benefits of using solar panels. Overall, that means that the value can be higher than FITs and even above the typical retail rate.
VOST is best for people with smaller solar systems. Like with FITs, you’ll earn money on top of the savings your panels are already providing you with.
The payment you receive is meant to reflect the environmental benefits of your renewable electricity. VOST programs are meant to encourage people to act as stewards of the Earth rather than only considering how they can save money on utilities.
Benefits of Solar Buyback Plans
When calculating your energy needs, you should always consider the benefits of solar buyback plans. Here are some of the benefits that you’ll enjoy with your solar panel buyback plan.
Heightened Sustainability
One of the greatest draws of solar panels is their heightened sustainability.
Traditional ways of generating electricity also generate an enormous amount of pollution. Coal, oil, and natural gas are the most common fossil fuels. These non-renewable sources account for about 81% of the United States’ energy generation.
By contrast, renewable energy is about 13%. Of that chunk, 14.2% is solar energy.
Solar energy generates virtually zero emissions. There is an unavoidable amount of emissions in the manufacturing and transportation process. Once installed, they will generate no pollution whatsoever.
As such, they’re significantly better for the environment than fossil fuels. You’ll reduce your negative impact on the environment while you save money on the utilities. The money saved can go toward other methods of helping the environment.
Lower Bills
An exceptionally popular reason to install solar panels is to lower your monthly energy bills.
When your home consumes energy, it will draw on your solar panels first. Due to this, you’ll use up all the energy your solar panels generate before you pull from the energy generated by fossil fuels.
Since you aren’t using your electricity provider’s power, you aren’t billed for that energy. Instead, you’ll enjoy a lower bill by virtue of consuming less energy. Net metering can lower the bill further, while tariffs can give you a profit on top of the already-lowered bill.
Some homeowners hesitate due to no longer receiving energy at night once the sun is gone. However, battery installation will cause your panels to store generated electricity in the batteries. Your home will then pull on this battery at night instead of the grid.
Better Property Value
Many homeowners look for ways to improve the value of their home. Solar panels are an ideal way to do so.
While you’re saving money on your bills, the cost of your solar panels will also improve your home’s value. As solar panels grow in popularity, many home investors are excited to see them as a feature on a house they can buy. Having solar panels already installed means the new homeowner won’t need to deal with installing them.
As such, you can expect to get significantly more for your home when you sell. You should calculate the cost not just on what it costs to install the solar panels, but also on how much they’ll save the potential buyer.
Factors in Buyback Programs
What factors will impact your buyback program? Here are four important factors to think of for your solar buyback plans.
Buyback Rates
Buyback rates mostly impact net metering. The buyback rate is how much your energy provider will compensate you per kWh generated.
Buyback rates will vary on several factors. Some plans may give you a flat amount, while others give you a varying price. Pay attention to these rates so you know how much to expect.
Location
Your location is also a critical factor in buyback rates. Some cities in Texas may have different regulations on setting the rates.
You should check with the utility company or your local government to see these rates. They have this information available and will happily share it.
Utility Company
Speaking of utility companies, many of them will offer different buyback rates. Here at Chariot Energy, we offer several different buyback plans with varying rates.
With our options, you can pick which plan best suits you. Our 100% renewable energy plans help you take advantage of the power from the sun while also keeping the planet healthy.
Improving Your Solar Buyback Profit
How can you improve the profit you make on your solar buyback plan? Here are some ways to maximize how much energy you’re selling.
Reduce Energy Consumption
The best way is to reduce your energy consumption. Your buyback plan is crediting you per kWh that you don’t consume. As such, not consuming as much energy means more kWh to earn.
Consider cutting your home’s power generation by keeping lights off when the rooms aren’t in use. Close air vents to help your air conditioning cool more effectively.
Increase Solar Energy Generation
Along with reducing energy consumption, you can increase your solar energy generation.
Solar panel arrays come in a variety of sizes. Installing more panels means you’ll generate more electricity. As a result, you’ll have more to sell back to your utility company.
Managing Your Solar Buyback Program
How does solar buyback work? The true answer depends on what sort of solar buyback plan you engage with.
Chariot is happy to offer a variety of plans to make sure you can find something that works for your purposes. Whether you prefer net energy metering or a choice of tariffs, we’re ready to compliment you on the journey to renewable energy.
Interested in finding the best plan for your needs? Visit us at Chariot Energy to see what plans we can offer you. You can also reach out via phone or email to discuss how we can aid you.