GetSunScore Analysis: Avoided Cost
Definition and Solar Context
Avoided cost is the value of grid electricity a household does not buy because it uses its own solar production. Electricity exported to the grid has a separate, plan-dependent value.
GetSunScore estimates the value of self-consumed solar using a committed EIA Texas residential average rate. This is a screening assumption, not the household's actual avoided bill charge.
What Does Avoided Cost Mean?
For a household, avoided purchase cost is the electricity charge displaced by each unit of solar energy consumed directly on-site. Fixed and non-bypassable charges may remain on the bill.
This is distinct from export compensation, which governs the rate assigned to electricity exported to the grid. In markets where export rates are lower than retail rates, direct self-consumption carries higher economic value than grid export.
Why Avoided Cost Matters in Modeling
The calculator estimates self-consumed and exported production separately. It values self-consumed energy at the statewide rate baseline and exports at a lower or higher share of that baseline depending on the scenario.
Its 20-year scenarios also vary production degradation and electricity-rate escalation. See the methodology for the assumptions and limits; the model does not promise a bill reduction.
How Avoided Cost Applies in Texas
In deregulated Texas areas, REP plan terms vary, so the value of self-consumption differs by household. Municipal and cooperative customers may face different tariff structures.
GetSunScore does not load current REP offerings. Its statewide EIA baseline and scenario-based export values make the distinction between on-site use and grid export visible; check the actual plan before making a purchase decision.
Frequently Asked Questions
Avoided cost is the value of electricity a solar system owner does not have to purchase from the grid because their system produces it on-site. It is calculated as the effective retail electricity rate multiplied by the amount of solar energy directly consumed.
The current calculator values estimated self-consumed solar at an EIA Texas residential average electricity-rate baseline. It models exported electricity separately with scenario-based value assumptions. It does not use a household's exact utility tariff or REP plan.
No. The calculator also assigns a scenario value to exported solar and subtracts modeled system cost when estimating long-term net savings. It does not automatically deduct tax credits or other incentives.
A household's avoided purchase cost depends on its actual electricity plan and bill components. GetSunScore uses a Texas statewide EIA residential average as a screening baseline, not 2024 REP postings or a plan-specific rate.
Avoided cost governs the value of solar energy consumed on-site. Net metering governs the value assigned to solar energy exported to the grid. In Texas, where retail net metering is not mandated, these values often differ. See Net Metering and Buyback Plan for related definitions.
These are modeled screening estimates, not a household tariff calculation. Current source dates and assumptions are listed in the methodology and data sources.