Solar economics · Austin Energy
The offset knee, drawn from real Austin Energy rates
Top panel: the percent of your electric bill that solar covers, against system production as a percent of your usage. The knee is where the bill hits zero and one more panel stops paying. Bottom panel: payback for the same sweep, shown relative to each home's own best case. Three Austin Energy homes, computed from the published 2026 inside-city tariff. Toggle between today's Value-of-Solar credit and the proposed November 2026 rate.
Payback for the same sweep, indexed to each home's own optimum
Why the knee exists
Austin Energy buys every kilowatt-hour your system makes at the Value-of-Solar rate and sells you every kilowatt-hour your home uses at retail. The credit nets against the whole bill: the usage tiers, the riders, and the $16.50 fixed customer charge. Once credits swallow the entire bill, the bill is $0, and further production only banks credit that rolls forward. AE never cuts a check. That corner is the knee.
Covering 100% of your usage does not zero the bill. The fixed charge stands regardless of usage, and the average retail rate runs above the credit rate, so solar has to over-produce past both.
Why the knee moves with usage, both ways
Two forces position it. The fixed $16.50 is a big share of a small bill, so a lower-usage home needs proportionally more production before the bill zeroes. And above 900 kWh a month, the upper usage tiers push the all-in marginal rate above the credit rate, so a heavy user's bill outruns its credits. The knee is tightest near typical usage.
So tier position does matter, in the direction few would guess: the biggest consumers need proportionally more over-sizing to zero the bill, not less.
What this argues for sizing
Everything left of the knee earns the full credit rate; everything right of it earns nothing. Sizing near 100% of usage keeps a system on the paying side for every profile here, and anyone selling a system far past the knee is selling panels the bill can't use.
The 110% line is Austin Energy's rebate-program gate, not physics: the rebate paperwork requires a signed acknowledgement, with a stated reason, for systems expected to produce past 110% of historical annual consumption.
Reading the payback panel
Each curve is divided by that home's own best payback, so 1.0× marks the optimum and 1.4× means the money comes back 40% slower than that home's best case. We plot it this way on purpose: exact payback years depend on your roof, your usage, and your actual quote, and pretending otherwise is how solar marketing goes wrong. The shape is what generalizes. Payback improves steeply as a small system grows, flattens near the optimum, and worsens past the knee.
Notice where the optima sit: at the proposed credit rate they cluster right around the 110% line. The best-paying system and the largest sensible system are nearly the same system, which is why an honest estimate starts from your usage rather than your roof area.
The fine print
Computed from Austin Energy's published 2026 inside-city residential schedule: $16.50 customer charge, four usage tiers, 6.525¢/kWh in riders, 1% city sales tax, and the Value-of-Solar credit at today's 9.91¢ or the proposed 12.88¢ (November 2026, pending City Council approval). Production assumes an Austin-typical 1,400 kWh per kW-dc per year and 3% annual utility escalation. Three modeled homes at steady monthly usage; outside-city AE rates differ, and so does your home. The chart teaches the shape. Your estimate does the arithmetic on your actual usage, roof, and utility.
More on how these mechanics show up in sales pitches: Myth 08, savings claims and the glossary entry on the Value of Solar tariff. And the honest flip side: when solar isn't worth it.