Understanding real-time wholesale
What to expect from your solar on RTW
If you’re here, you’re probably shopping for a solar plan.
And you might be wondering... what’s this real-time wholesale thing that everyone’s on about?
A market rate for energy
To understand real-time wholesale, let’s look at how the energy market overall works (this is quick, promise). First things first: While you pay a fixed rate for your power, in the wholesale market prices are fluctuating all the time.
The market rate for energy is determined like most market rates are – by supply and demand. In this case, supply refers to the amount and price of power available, and demand refers to how much energy is needed from the grid.
Prices in the ERCOT market change constantly based on this balance. The cheapest sources of energy (like renewables) supply our power first, and when demand goes up, more expensive sources (like fossil fuels) are brought in to meet it. This is why prices fluctuate throughout the day – when demand is low or there's a lot of cheap power available, the grid doesn't need to call on those expensive sources. When the balance changes prices go up, reflecting the increased cost it took to meet the grid's needs. The price the market netted out to at any given time gives us something called the "settlement price point" or SPP, and this is what's known as the real-time wholesale price.
This also means wholesale prices can be volatile. If a wind farm is sending out a ton of low-cost energy and suddenly gets disconnected, then a bunch of expensive gas plants have to crank it up to replace the lost wind – and prices skyrocket. Any power that's feeding into the grid at that time gets paid that high market rate – including your solar.
Ok, but what’s the actual price?
The important stuff. RTW prices genuinely do vary all day, every day, but here’s the basics:
- RTW prices range all the way from a fraction of a cent to $5/kWh. On rare occasions, they can even hit $0 or go negative.
- They are generally highest late afternoon and early evening, when everyone comes home from work and starts using lights, stoves, and air conditioning, increasing demand.
- They are generally lowest late and night and super early in the morning, when there’s not a lot of demand for power. Often there’s more low-cost wind power at night, which helps here, too.
We’re all too aware that our grid isn’t always up to the task of powering everything. The cool thing about RTW is that since prices vary based on supply and demand, it’s ultimately a measure of how valuable power is at any given moment. When prices skyrocket to $5/kWh and you’re dumping solar back onto the grid, you’re not just making bank from the power you produce – you’re helping keep everybody’s lights on when they need it most.
RTW and your solar
What will I earn on an RTW buyback plan?
- The average RTW price over the past year (during typical export hours) is between 6-7 cents/ kWh.
- In the summer, prices often spike very high (heat waves + air conditioning = high demand). During this summer’s highest-priced week, the average price customers on our solar plan were paid for their power was a whopping 36 cents/kWh.
- In fall & spring, “shoulder season”, prices typically stay lower and are often averaging around the 1-3 cent range.
- In winter, price spikes are more likely than fall and spring – but they typically aren’t as high as summer, and the spikes less frequent. However, more extreme weather patterns make winter high prices more likely.
To see the RTW price right now as well as annual averages, take look at our RTW tracker here. Remember the SPP we talked about before? It “settles” in 15 minute increments – so if the price is 5 cents/kWh from 12:15-12:30, and you sell back 2 kWh during that window, you’ll make 10 cents. Make sense?
When RTW plans crushes the competition – and when they don’t
RTW plans are fantastic for a lot of homes, because they allow you to capture the actual value of what your solar is worth. And remember, that’s up to $5/kWh – this summer, we had customers who earned upwards of $80 in a single afternoon from selling back their solar during a spike.
Our plans offer you 90% of the RTW price and have a very low import rate – one of the lowest on the market. That’s because instead of a plan where we buy back your solar at a fixed rate and tack on base fees, credit caps, and high import rates to keep our business going, we’d rather make money when you make money. So we provide any power you need at a super-low rate, and the remaining 10% of the RTW buyback is what keeps our lights on.
Our solar plan might not be the right fit for you if you’re more focused on having a consistent solar earning $ each month, even if it means sacrificing those high summer peaks. It’s also good to keep in mind what your home’s consumption patterns are and how much you offset.
There are a few more reasons why our solar plan is so popular, and here’s some of what people like most about it:
- No caps – we’ll buy as much solar as you can make. We think it’s crazy that the other guys keep it for themselves if you exceed a certain amount.
- Cash out on term end – the money you make from selling your power is yours to keep, not just a credit on your account. If we owe you money when your term is up, we’ll cut you a check for it.
- Low downside, high upside – we know you want to make good money from your solar (and RTW is a great way to do that!), but import rates are key too. With our plan, you’re protected from the risk of a massive bill if your panels go offline or the sun isn’t shining. Just ask our customer Marianne, who saved herself from a hundreds-higher bill when her panels were offline for 8 weeks in the peak of the heatwave!
If you're ready to go real time, you can sign up for our solar plan here today. Have more questions? Give us a call at +1 (855) 524-0270 or email texas@davidenergy.com to speak with a member of our team – they can guide you through the best option for you.