This commentary was originally posted on the EDF Energy Exchange blog.
Picture this: You live in Texas, the state with the most solar energy potential in the U.S. Knowing this, you decide to install solar panels on your home’s rooftop because, in Texas, you can lease – rather than buy – the entire solar energy system. The option to lease allows you to take advantage of a low monthly payment that will be offset by the savings on your energy bill, rather than face high upfront investment costs.
Now, while you are at work during the day, your panels are actually putting excess, unused energy back onto the grid, when electricity is most expensive. And, that surplus of energy isn’t just wasted; it is used by your electric company to serve other customers. In most states, electric companies buy this power back at a retail rate. But, in Texas it’s not quite that simple. In order to see any form of pay back, you have to be a lucky customer of one of only three retailers – TXU Energy, Reliant Energy and Green Mountain Energy – that offer “renewable buyback” rates in Texas. If you happen to buy electricity from one of the other 50 retailers serving residential providers across the state, though, you could always switch over to a renewable buyback program. But there is no guarantee that you will be paid a fair market value for the 25+ years your solar energy system is expected to last.
Making a long-term investment to protect against highly-fluctuating, unpredictable electric rates is a difficult decision, and making that decision without knowing whether you are guaranteed fair compensation is nearly impossible. This is one of the key reasons why Texas lags behind the nation in solar adoption. Fortunately, there is a solution in the works. Senate Bill 1239 from state Senator Jose Rodriguez seeks to guarantee homeowners, schools and religious facilities at least a minimum buyback rate based on wholesale market energy prices, which were about 50 percent lower than retail rates in 2011, on average. The bill has a similar impact for rural electric co-operative, municipal and independently-owned utility customers, ensuring that any homeowner, school or religious entity that installs a properly-sized solar energy system will be compensated comparable to the way a fossil fuel power plant is compensated in the wholesale market.
Even though most agree that solar energy emitted onto the distribution grid demands a high value –higher than retail rates pay according to some – Senator Rodriguez’s bill is a critical step forward for Texans who wish to be truly energy independent. Today, Texas is one of only six states that does not guarantee customers any form of payment for excess, clean energy, while conservative states – such as Utah, Arizona, Ohio and New Jersey – are consistently praised for having some of the best buyback policies in the country. Hence why Arizona and New Jersey – with longstanding buyback rates – are ranked 2nd and 3rd respectively for solar production in the U.S.
Senate Bill 1239, also known as the Renewables BuyBack Bill, is up for hearing the morning of Tuesday, April 16th, we are proud to be among the broad group of stakeholders, including TXU Energy, Reliant Energy, faith groups, environmentalists and the solar industry working with Senator Rodriguez on this critical legislation. Solar prices continue to drop dramatically, which makes policies like Bill 1239 critical for Texans as the state prepares to find solutions to help address the Texas Energy Crunch.
EDF hopes the Senate Business and Commerce Committee will pass the Renewables BuyBack bill quickly to ensure homeowners, schools and religious entities receive a fair compensation for the clean energy they sell back to the grid, which will help to create opportunities for energy independence for Texans.