What you are paid for exported solar power
A solar buyback rate is the price a utility or electricity retailer credits or pays for each kilowatt-hour a customer exports to the grid. In Canada the value can match the retail price under net metering or be set lower or by a market price, so the rate you actually get depends on your province, your utility and your contract.
What is a solar buyback rate?
When panels produce more than the home uses, the surplus flows to the grid. A buyback rate puts a value on that surplus. It can appear as a credit on your bill or as a payment, and it may be quoted in cents per kilowatt-hour. The term is used in some countries more than in Canada, where "net metering", "net billing" and "export credit" are the more common labels. The net metering guide explains the main method.
The word "buy back" implies a retailer buying power from you. The retail electricity price, by contrast, is what you pay to buy electricity from the grid. The gap between the two sets how much solar savings depend on using your own power. Rates are usually quoted per kWh, and comparing them in cents per kWh makes offers easy to line up.
How do buyback rates differ from net metering?
Under classic net metering, exports offset imports at the same price, so a kilowatt-hour exported is worth the retail price of one imported. Under a buyback or net billing arrangement, exports are valued separately, often at a lower or variable price, while imports are paid at the full retail price. The same system then earns less from exports. The Alberta net metering explainer shows one way a province treats the credit, and it is worth reading your own utility's tariff for the exact approach.
Why can the rate vary between offers?
Several things move it. Some rates follow a market price that changes by hour or month. Others are fixed under a contract for a stated period. Retailers may compete on export credits where customers can choose a supplier, and the offers differ in term, exit fees and whether credits expire. A high rate for a short time can be worse than a modest rate you can rely on, so compare the terms as well as the figure. Time-based pricing adds another layer, covered in the time-of-use rates and solar guide.
How much does the export rate matter?
It matters most when you export a large share of your production. A worked example with assumed numbers: a system makes 6,000 kWh a year, and the household uses 3,000 kWh of it directly and exports 3,000 kWh. If the household's retail price is 15 cents and the buyback rate is 6 cents, the direct use is worth $450 and the exports $180. Raising the home's own use, for example with a battery or by shifting loads, moves kilowatt-hours from the low-value to the high-value column. The electricity rates and solar savings guide and the battery storage guide pick up these themes.
What else should you check?
Ask how credits are shown, when unused credits expire, whether the rate can change during the term and what taxes apply to any payments. Income from exports may have tax treatment, which the solar income tax guide and the guide to grid sales and rooftop rental income examine. Confirm current rules with your utility, the provincial energy regulator and your tax adviser before you size a system around export income.
Quick answers
What is a good solar buyback rate in Canada?
There is no single figure. Compare it with your retail price and with the terms, such as contract length and credit expiry.
Is net metering better than a buyback rate?
Usually net metering values exports at the retail price, which is more generous than a lower buyback rate. Rules vary by utility, so read your own tariff.
Can I choose my buyback rate?
Only where retailers compete or the utility offers options. In many places the rate is set by the utility or regulator.
Are payments for exported solar power taxable?
They may be, depending on how they are treated. Check with a tax adviser and read the guidance on solar income.