Buying Renewable Power

As the population of Texas grows, the demand for electricity also grows. Texas currently produces and consumes more electricity than any other state. Because of its size, diverse climate, and abundance of natural resources, Texas has tremendous potential to generate renewable resources that greatly enhance the diversity of our electric grid. The two main advantages to using renewable energy are that it’s clean and it’s unlimited, which reduces the demand for non-renewable sources of energy, such as coal, oil, and natural gas.

Several Texas utilities now offer power produced from renewable sources. It generally costs more than power generated from fossil fuel burning plants, but a growing number of consumers are electing to pay a premium for environmentally friendly power. An alternative is to buy “green” power, which includes electricity generated from relatively clean natural gas-burning plants that burn gas produced in Texas. Either way, choosing one of these types of plans can contribute to a cleaner Texas.

When you choose to buy renewable energy, you are telling your electric company that you want a certain percentage of your power to come from renewable resources. That percentage of renewable power is then produced and placed onto the power grid. The actual electricity that finds its way to your home or business represents the mix of all generators connected to the grid, but by choosing renewable power you help increase the amount of renewable energy produced statewide.

Selling Excess Renewable Power

Some people choose to install power-generating sources, such as solar panels or wind turbines. This is called Distributed Renewable Generation, or a DRG system. There may be times when these customers produce more power than they can use. This excess power may be sold to an electric company. Selling this excess power works in different ways, depending on where you live.

Areas with Retail Electric Competition

If you live in an area of Texas with retail electric competition, you may be able to sell the excess power that you produce. You must sell to the company from whom you buy your electricity; however, your company is not required to purchase this power. Some companies that do purchase excess DRG power may require that the customer also subscribe to a specific retail offer. Other companies may allow the purchase and sales offers to be chosen independently by the customer.

Retail electric customers who wish to install a DRG system must sign an interconnection agreement with their local electric Transmission and Distribution Utility.

Areas without Retail Electric Competition

Most areas of Texas without electric competition are served by municipal utilities or electric cooperatives. Customers in these regions should contact their utility or cooperative directly with questions about the sale of DRG power. Before installing a DRG system, you should get an interconnection agreement from your utility that describes the terms.

For customers in areas without retail electric competition who are not served by a municipal utility or cooperative, PUC rules require the utility to purchase the DRG power put into the grid at a rate equal to its " avoided cost," which is the price the utility would have paid for an equivalent amount of conventionally generated electricity.

Applicable Rules

Incentives for DRG and Energy Efficiency Measures

The federal government offers tax incentives for energy efficiency and renewable energy. Texas residents can also check with their local utility providers, as some have energy efficiency programs that offer low-cost loans or rebates and advice on renewable energy technologies. Texas provides tax incentives for some businesses. For example, businesses that use, manufacture, or install solar or wind energy can receive franchise tax deductions and/or exemptions. A property tax exemption is available for businesses that install or construct a system using solar, wind, biomass, or anaerobic digestion.

• Database of State Incentives for Renewables & Efficiency
• Texas State Energy Conservation Office