Going solar with Austin Energy: what you need to know

Updated

Solar panels on roofs in Texas
Austin Energy has a unique approach to billing their solar customers but does it make going green a worthwhile investment for you? Image source: Environment Texas

Austin Energy is one of the leading municipal utilities in the United States when it comes to solar energy. The company currently provides the most per capita of any municipal utility with over 3,000 watts of solar energy per person with a goal of achieving 100% renewables by 2035.

The utility has invested heavily in solar and is one of the only utilities to place value not only on the impact solar panels have on the grid but also on the effects they have on the environment. Despite it seeming like it’s a no-brainer to go solar in Austin, there are a few things homeowners should know before they decide to make the switch.

That’s why we’ve put together an outline of everything you need to know about going solar with Austin Energy. We’ll cover how much going solar will cost you to how much money the utility’s unique Value of Solar program can actually save you.

See if going solar is worth it in your area

Going solar with Austin Energy at a glance:

  • To cover an electricity bill of $150, an Austin Energy customer would need to install a solar panel system that costs about $13,920 including incentives.
  • Austin Energy offers a $2,500 rebate to homeowners who install solar using a utility-approved contractor and complete a brief solar education course.
  • An 8.14 kW solar panel system can provide about $1,500 in annual Austin Energy electricity bill savings.
  • Austin Energy credits solar energy at the Value of Solar Rate, which is equal to $0.097 per kWh generated.
  • The solar interconnection and installation process with Austin Energy can take anywhere between four and six weeks.

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    How much do solar panels cost in Austin?

    Austinites would need to spend about $22,400 to cover most of the costs of a $150 electricity bill. When you take the 30% federal solar tax credit and the Austin Energy residential solar rebate into account, that price drops to about $13,920. The following table outlines estimates of how much you would need to spend to offset your electric bill:

    Electric bill System size System cost (before incentives) System cost (after incentives)
    $50 2.59 kW $7,122 $3,235
    $100 5.5 kW $15,125 $8,837
    $150 8.14 kW $22,385 $13,920
    $200 10.36 kW $28,490 $18,193

    How to qualify for the Austin Energy solar rebate

    Austin Energy offers a $2,500 rebate to help homeowners reduce the upfront cost of installing solar panels. In order to get the rebate, the solar system must be at least 3 kilowatts (kW) in size, must be installed by an Austin Energy Participating Contractor, and buyers must complete the Austin Energy Solar Education Course before applying.

    Once you choose a solar company to complete the installation and finish the Solar Education Course, you’ll sign a Customer Agreement Form. From there, Austin Energy will issue a confirmation letter that you are eligible for the rebate. You will receive a rebate check from the City of Austin in the mail after the solar installation is complete.

    How much can solar panels save you on your Austin Energy bill?

    Solar panels can eliminate most of your energy bill and in some cases all of it, depending on your energy consumption and the size of your solar system. An 8.14 kW solar panel system can provide Austin Energy homeowners with almost $1,500 in savings per year!

    Austin Energy has developed a unique approach when it comes to paying its customers for the solar energy they produce. Instead of traditional net metering, the utility offers a Value of Solar Rate that takes the monetary value of customers generating solar energy and its environmental benefits into account.

    How does the Austin Energy Value of Solar rate work?

    Austin Energy’s Value of Solar rate is pretty straightforward. Your electricity bill will list the number of kilowatt-hours your home used and the number of kilowatt-hours your solar panels produced. You are billed for 100% of the electricity your home uses at the utility’s residential electric rate. This is sometimes referred to as a “buy-all, sell-all” program.

    All of the solar energy your panels produce is credited at the Value of Solar rate, which is equal to $0.097 per kWh. If your total solar credit is worth more than your electric bill costs, the excess credit will roll over and be applied to your next bill.

    Let’s take a look at an example to get a better idea of how you’ll be billed with the Value of Solar rate.

    Say your home used a total of 1,200 kWh of electricity in one month, your energy costs including additional charges would come out to about $114. In that same month, your solar panels produced 1,000 kWh of solar electricity, for a total Value of Solar credit of $97. This brings your total bill down from $114 to just $17.

    Will you still get an Austin Energy electricity bill with solar panels?

    Yes, you will most likely still get an electricity bill from Austin Energy every month. There are a few reasons for this, one being that the Value of Solar rate is technically lower than what you pay for electricity from the grid once you consider all charges and fees. So, the utility pays you less for the energy your panels produce than what it charges you for the electricity your home used.

    Not only that, but the buy-all, sell-all structure of the program makes it so your solar energy doesn’t fully offset the costs of using energy. Usually, a utility will bill you based on the amount of energy you used from the grid, meaning if you used the energy your panels generated, you wouldn’t be billed for it because you didn’t take the energy from the grid.

    Austin Energy, on the other hand, just bills you for all of your energy consumption, regardless if it came from your panels or the grid. Overall, this leads to lower savings and makes it difficult to offset all of your energy costs. Plus, the Value of Solar credits cannot be used to eliminate any charges or fees from the City of Austin, like taxes.

    So, solar panels probably won’t get rid of your entire electricity bill, but they can greatly reduce it because the Value of Solar rate isn’t drastically lower than the retail rate. You can still see over $1,000 in electricity bill savings over the course of the year!

    It is worth noting that there doesn’t seem to be an obvious indication of a grandfathering clause for the Value of Solar program. Basically, this means Austin Energy could decide they want to get rid of the program, and you have no protection. Is this likely to happen? No. But it’s still something to consider and makes going solar a little bit riskier than it is in some other places.

    Should Austin Energy customers install a solar battery?

    Thanks to frequent power outages occurring throughout the state, Texans are more concerned than ever about having access to backup power. If keeping your lights on and your fridge running during a power outage is a top priority for you, then a solar battery is definitely worth considering.

    Solar batteries like the Tesla Powerwall and the Enphase IQ allow you to store excess solar energy produced by your solar panels so that it can be used by your home if the power goes out. Without a battery, solar panels will not continue to power your home.

    Unfortunately, batteries don't come cheap - an average-sized lithium-ion battery will run you a minimum of $10,000. And because of how Austin Energy bills solar customers, using a battery to power your home at night won't save you any additional money. So, it's up to you to decide if the peace of mind that you'll have when the grid goes down is worth a couple of thousand dollars.

    Find out how much a solar battery will cost you

    Solar interconnection with Austin Energy

    We would love to tell you that installing solar panels is as easy as finding a contractor and getting them on your roof. In reality, the going solar process is a bit more involved. Luckily, you as the homeowner don’t have to worry much about handling the more tedious parts of the process, like paperwork and permitting.

    These things do, however, have an impact on the installation timeline, so it's still important that you have some idea about what goes into getting solar panels up and running. It will probably take somewhere between four weeks and six weeks for solar panels to start running your home.

    Note: There may be different interconnection requirements if you are connected to the Downtown Network. 90% of Austin Energy’s solar installations are not part of the Downtown Network.

    Step 1: Apply for the Austin Energy solar rebate and find a contractor

    Technically, applying for the rebate is optional. If you want the $2,500 rebate, though, it’s the best place to start. Plus, because you need to complete a solar education course in order to get the rebate, it’s a great way to get your bearings on what to expect when you install solar.

    After you complete the course and take a 10-question quiz, you can submit your application for the rebate and find a qualifying Austin Energy installer. We recommend getting three quotes from different solar companies in order to get the highest quality installation and the best price.

    Check out SolarReviews’ founder and solar expert Andy Sendy discuss the top things to consider when choosing a solar contractor to ensure you’re getting the best service possible:

    Step 2: Apply for interconnection

    Austin Energy requires anyone installing solar panels to complete the Distributed Generation Planning Application. The application can be filled out by your installer and includes general project information and electrical information such as the size of the system and inverter.

    Residential systems do not require the Distributed Generation Planning Application to be approved by Austin Energy and can continue to the next steps of the process.

    Step 3: Obtain an electrical permit

    Once the Distributed Generation Planning Application is complete, the installer will apply for an electrical permit from the City of Austin. To get an electrical permit, the installer must include site plans, a one-line diagram, the completed Distributed Generation Planning Application, and a list of equipment details.

    This will probably be the longest part of the process, as it can take about 15 business days from the submission date for the City to review the permit application.

    Step 4: Installation

    When the electrical permit is received, the solar installation can begin! The installation usually only takes one day, but it may take up to three if there are complications or if the system is particularly complex.

    Step 5: City of Austin electrical inspection

    After the solar panels are installed on your roof, your contractor will request an electrical inspection through the City of Austin. Inspection can be scheduled as soon as 24 hours after it’s requested.

    The goal of the inspection is to make sure that the solar panel system can operate safely with the grid and that the installation matches the approved design plans.

    Step 6: Start saving money!

    When you pass the electrical inspection, your solar panels will be turned on and start generating electricity! Then you can sit back, relax, and watch your electricity bills get lower.

    Is going solar with Austin Energy worth it?

    The short answer is yes, going solar with Austin Energy is worth it. You can save a decent amount of money on your electricity bills even with the buy-all, sell-all structure because of the current Value of Solar Rate. In fact, Austin Energy solar homeowners can experience a payback period of 12 years, which makes going solar a solid investment.

    But, it is worth noting that you are taking a bit of risk by going solar because Austin Energy doesn’t offer a grandfathering clause to their Value of Solar customers. This means there’s no real protection for you if the company decides to drastically change how it bills solar customers, and can potentially impact how sound of an investment solar is.

    If you’re willing to take that risk, going solar with Austin Energy can save you on your electricity bills so you can put that money to better use. The best way to see if going solar is a worthwhile investment for you is by using our state-of-the-art solar calculator, which gives you an idea of how much solar panels can save you now and in the future.

    Is going solar a worthwhile investment in your area?
     - Author of Solar Reviews

    Catherine Lane

    SolarReviews Blog Author

    Catherine is a researcher and content specialist at SolarReviews. She has strong interests in issues related to climate and sustainability which led her to pursue a degree in environmental science at Ramapo College of New Jersey.

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