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Solar power in Texas

High electricity rates in Texas encourage customers to explore alternatives to lower their monthly bills. While electricity rates continue to rise, the cost of solar energy in Texas has decreased by 53% in the last decade. 

Texas is a leader in the solar industry, with enough solar installed to power nearly 2 million homes and room to grow. The state expects to increase its solar capacity by four gigawatts (GW) over the next five years.

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Texas solar panel cost

Cost is a major factor in determining whether to install solar panels. The cost of solar in Texas is higher than the national average, but with rising electricity rates and hot Texas summers, installing solar panels may save you thousands on your energy bills. 

Based on data from the Lawrence Berkeley National Lab, the average solar system in Texas costs $4.01 per watt, while the average price in the U.S. is $3.67. The average system size in the U.S. is 8.6 kW, which costs $34,486 in Texas, $2,928 more than the U.S. average total of $31,558.

The payback period, or time it takes for the solar system to pay for itself, is about 13 years. The payback period will vary based on your energy usage and system size. By switching to solar, you could save nearly $13,300 on energy bills over 20 years. Claiming available solar incentives could quicken your payback period and increase your savings. 

The best Texas solar panel incentives or rebates

Incentives and rebates offset the total cost of solar to make it more affordable. The federal government offers the Residential Clean Energy Credit, a 30% tax credit on the total cost of your solar system. The federal credit alone could save you $10,346 on an 8.6 kW solar system in Texas. 

Explore other Texas solar incentives in the following table. Solar incentives in Austin

AEP Texas SMART Source Solar PV Program

• AEP Texas customers can receive funding to offset upfront costs based on the size of their solar system.

Garland Power & Light EnergySaver Solar Rebate Program

• Customers receive credits toward their utility bills for each kWh of excess generated solar energy.

Green Mountain Energy Renewable Rewards Buyback Program

• Customers receive bill credits for excess energy produced by their solar system.

Net Metering

• Texas has no statewide policy, but several utility companies offer net metering programs. Check with your utility to learn about potential benefits and specific rates.

Oncor Electric Residential Solar Program

• Oncor customers with new solar panel systems including battery storage qualify for incentives. Additional requirements include a roof angle between zero and 15 degrees and a solar system between 3 kW and 15 kW in size.

Property Tax Exemption

• The state offers a property tax exemption for solar panels. File for exemption is due between Jan. 1 and April 30 of the year you’re requesting an exemption.

TXU Energy Home Solar Buyback

• Residential customers enrolled in the TXU Energy Home Solar Buyback program can offset their electricity bill with credits from excess solar generation.

Solar incentives in Austin

Austin Energy provides a $2,500 rebate for solar system owners. To receive the rebate, you must complete a solar education course and choose a participating contractor. The rebate application is submitted on your behalf by the solar contractor. 

Solar incentives in Houston

Houston partnered with Solar United Neighbors to launch a group-buying program to help reach the city’s goal of five million MWh of solar per year. Texas Solar Switch Houston provides residents with a discounted price for rooftop solar.

Why choose Texas solar power?

Installing solar panels can lower your energy costs, establish more energy independence, and increase your use of green energy.

Lower energy bills

Reducing monthly energy bills is an appealing reason to install solar panels. Based on data from the Energy Information Administration (EIA), the average electricity bill in Texas is $156, which is about $18 more than the national average. You can save thousands on energy bills over the lifetime of your solar system. 

Gain energy independence

With a solar panel system, you generate your own energy instead of receiving power from the traditional electricity grid. Covering your energy usage or adding battery storage can keep power to essential rooms or appliances during an outage. Using solar energy also protects you from electric rate spikes during peak hours or times of high demand. 

Use green energy

The traditional electricity grid uses limited fossil fuels like coal and gas to generate electricity. Fossil fuels negatively impact the environment by emitting greenhouse gases that pollute the air and water. Solar energy is a renewable source that does not create harmful emissions during production. Investing in green energy is beneficial to your wallet and to the environment. 

How to pay for solar panels

There are many ways to pay for or finance solar panels. A cash purchase provides the highest return on your investment but is not the best option for every budget. Other payment methods include a solar loan, lease, or power purchase agreement (PPA). Pay attention to a solar company’s rate structure before signing a lease or PPA, as they can increase rates based on your contract terms. 

• Cash purchase: Pay upfront, incentive eligible, no interest fees
• Solar loan: Eligible for incentives, low or no initial cost, interest fees
• Solar lease: Little or no initial costs, a solar company installs, owns, and maintains the panels. You pay a fixed monthly fee, not eligible for incentives 
• Power purchase agreement: Little or no initial costs, a solar company installs, owns, and maintains the panels; you pay a monthly fee for the kWh of energy used, not eligible for incentives.

Texas solar panel companies

With 617 solar companies in Texas, making a decision can be a difficult task. Fill out the form on this page to receive an estimate of your potential savings from solar and a system size recommendation for your home. If you’re ready to take the first step, call the number on your screen to start your solar journey today. 

If you need more time to decide if solar is right for you, consider switching to a provider with green energy plans like Chariot Energy, Gexa Energy, and Green Mountain Energy. All Texas electricity companies include a percentage of green energy found on the Electricity Facts Label (EFL), but these companies offer 100% renewable energy plans. 

Solar panel installation factors to consider

Ask yourself the following questions to determine if powering your home with solar energy is right for you.

• Are you a renter? Renters are usually not able to make significant changes to the property. Inquire with your landlord about installing solar or consider a community solar program, like Arcadia, a subscription-style service to receive power from nearby solar panels. 
• What is your roof condition? If your roof is old or worn, it will need repairs before installation. Factor repair expenses into your total cost. 
• Is your home shaded? Solar panels generate electricity when shaded but are less efficient without direct sunlight. Consider removing any obstructions. 
• What is the angle of your roof? The U.S. Department of Energy explains that solar panels perform best on south-facing roofs angled 15 to 40 degrees. 
• Are you part of an HOA? Homeowners Associations (HOA) cannot ban solar panels in Texas. However, HOAs or other neighborhood associations may have placement restrictions. Review guidelines before signing a contract. 
• Does your insurance cover solar panels? If your homeowner’s insurance does not cover solar panels, contact your agency to adjust your policy. 

Solar power FAQs

Will solar panels save money?

Yes. Solar panels can save you money depending on your system size and energy usage. Based on Texas’s average monthly electricity bill and price per watt, you could save about $13,300 over 20 years with solar panels. Rising electricity rates and solar incentives may result in even more savings. 

How much does solar cost in Texas?

The average solar system cost in Texas before incentives is $35,740 for an 8.92 kW system, the state’s average size. The total cost of your system will vary based on location, system size, energy usage, roof repair, and other factors. 

Does Texas have solar incentives?

Yes. Cities like Austin and Houston have specific programs to make solar more affordable. Check your city and local utility’s website for incentives in your area. Texas solar owners are eligible for a property tax exemption and the 30% federal solar tax credit. 

How much solar power does Texas have?

Texas currently has 17,247 megawatts (MW) of solar installed, providing over 10,000 jobs to the state. Texas is expected to surpass California in installed capacity, investing in 34,324 MW installations over the next five years.