Over 1 million homes have gone solar in the Lone Star State. Texas continues to lead all other states in the number of new home solar installations. The most popular reason is that solar can reduce or even eliminate your annual electric bill.
Are solar panels worth it in Texas and how much can you save? We’ll cover this and more in this article.
Key Points
- Solar power is worth the investment if the conditions are right for your home. We recommend using the guide below and/or getting real quotes from solar providers to learn more
- The average system sizes in Texas in 2022 was about 12.5-13.5 kW, meaning the average system cost in Texas was about $33,000-$36,000 before incentives.
- If you qualify for the solar tax credit worth 30% of your system cost, a solar installation in Texas will cost about $23,000-$25,000.
- You can save an estimated $40,000 over 25 years, but your system should continue to save you money even longer into the future.
- Texas doesn’t have a state wide solar incentive program, but other incentives are available.
In This Article
- Are Solar Panels Worth It In Texas?
- How Much Do Solar Panels Cost In Texas?
- How Much Can Solar Panels Save In Texas?
- Pros and Cons Of Solar Power
ARE SOLAR PANELS WORTH IT IN TEXAS?
Solar panels could be worth the investment in Texas if your home meets the right conditions. Many people living in Texas will qualify for large cost savings for installing solar power, in addition to being able to save thousands of dollars on electricity costs.
Some of the most important considerations are
- How much solar power costs in Texas
- How much electricity you use
- Incentives available based on where you live in Texas.
How Much Do Solar Panels Cost In Texas?
In Texas, the cost of solar power is about $2.67 per watt. The average system sizes in Texas in 2022 was about 12.5-13.5 kW, meaning the average system cost in Texas was about $33,000-$36,000. If you qualify for the solar tax credit worth 30% of your system cost, a solar installation in Texas will cost about $23,000-$25,000.
Keep in mind that this is just an estimate based on statewide averages. Your exact costs will vary.
If you’d like to figure out how much solar will costs for your home in Texas, check out our guide on going solar. There, you’ll find step-by-step instructions to figure out exactly how much solar power you need based on your electricity use.
We provided a quick summary below, but you can also check out our recommend solar provider over at EnergySage.
Step 1: How Much Electricity Does My Home Use In Texas?
Electricity costs Texas are about 14.8 cents per kWh and the average home in Texas consumes nearly 1000 kWh per month for a total cost of about $150 per month.
Knowing how much you spend on electricity is an important first step in determining how much solar power will cost you. To do so, simply look at your utility statement to see how much electricity your home used in the past 12 months. If you are not able to do so, you may use the average of about 1000 kWh per month.
Step 2: How Much Solar Power Do I Need In Texas?
The average solar installation sizes in Texas in 2022 was about 12.5-13.5 kW. Your exact needs may be different. To figure out how much solar power you need, we recommend using the tool PVWatts, which you can also learn more detail about on our guide to going solar
In PVWatts, you punch in your address and use the “Draw Your System” tool to map out where you would like your solar installation to be. You can either install solar on your roof or on the ground if you have enough property.
PVwatts will then tell you what size solar system you’ll be able to fit in that area based on a number of assumptions.
One of the important assumptions is the amount of shading your solar installation will face. Texas is the 4th sunniest state and typical flat, with little shading. There is little overcast and about 233 sunny days per year.
With that in mind, you may be able to lower the amount of shading estimated by PVWatts.
Once you’ve filled out all the required fields, you can go to the results tab to see how much electricity can be generated on the system you drew on your property, based on the actual amount of solar your home gets each year.
Compare the kWh estimate for your solar installation with the amount of electricity you use each month.
- If the estimate for your solar installation is greater than the amount of electricity you use in a year, you may be able to decrease the system size.
- If the estimate is less than the amount of electricity you use in a year, you may need to increase the system size or efficiency, or reduce shading.
Step 3: Calculate System Cost Before Incentives
Solar Installation Cost
Once you find a system size that is able to meet your electricity needs, multiple the size by $2.67 per watt. This will give you a rough idea of how much your system will cost before incentives
Battery Installation Cost
In order to have power during outages such as those caused by natural disasters, you’ll need an energy storage system. If you are interested in batteries, the average size battery system in Texas is about 10 kWh and the average cost per kWh to install such a system is about $1200 per kWh, for an additional cost to your solar system of about $12,000.
Step 3: Calculate System Cost After Federal And Texas Solar Incentives
Many people living in Texas will qualify for the 30% solar federal tax credit. Depending on where you live, you may be able to qualify for additional incentives.
Solar Federal Tax Credit
The solar federal tax credit is a dollar for dollar reduction you can get on your federal income tax. In order to use the tax credit, you must pay federal income tax at some point during the year. If you don’t owe any federal income tax, you won’t be able to get the solar tax credit.
Keep in mind that you don’t have to owe federal income tax upon filling to qualify, you simply need to pay federal income during the year. For example, many people have federal income tax deducted from their paycheck. This means they would have federal income tax to apply the tax credit dollars.
The solar federal tax credit, also known as the ITC tax credit is worth 30% of the total applicable costs for your solar installation.
- Solar Panels (electric or hot water)
- Inverters
- Mounting equipment
- Wires
- Labor
- Applicable fees such as permits and taxes
- Battery storage (over 3 kWh)
If your tax liability is low, you can roll any unused dollars over the the following years. The tax credit is set to drop to 26% in 2033, then 22% in 2034, and expire in 2035.
If you qualify for the solar tax credit worth 30% of your system cost, a solar installation in Texas could cost about $23,000-$25,000.
Texas State Solar Incentives and Rebates
Texas does not have a state-wide solar incentive or any solar rebate programs. However, there are some incentives you may qualify for depending on the city you live in and your utility provider.
Texas Average Electricity Buy-Back Rates
In Texas, you need to choose your utility provider, so be sure you select a provider that will buy back the excess solar you generate, if such a program is offered. Not all utility companies will do so and if you don’t have net metering this can be an important factor on how much solar can save you.
- Austin Energy: 9.7 cents
- CPS Energy: 11.3 cents
- El Paso Electric Company: 11.11 cents
Net Metering
An important consideration to going solar in Texas is that net metering is available in certain parts of the state or from certain utility companies. Net metering is a program offered by your utility company that allows solar providers to design your solar installation such that it will meet all of your electrical needs in your home across the year on average.
This means, in certain months, your solar system will generate more electricity than your home uses. The utility company can store any extra amount of electricity generated as a credit. Then, on cloudy days or days where your system generates less electricity than what you need, net metering allows you to use your credits to make up for the difference.
This means you don’t need to install batteries to smooth out the highs and lows throughout the year. Without net metering, you wouldn’t be able to store any extra power generated, and you would need to have a larger solar system so that it is always able to meet your needs.
At the moment El Paso Electric, the City of Brenham, CPS Energy, and Green Mountain Energy offer net metering. If you live in these areas or use these utility companies, net metering can help you save money and decrease the amount of time it takes to pay off your solar system.
Other Solar Incentives In Texas
Property Tax Exemption: Texas has a renewable energy property tax exemption. Going solar has shown that it can increase your property value by about 4%. With this exemption, your taxes won’t also increase as a result of higher property value.
Solar Rights Law: Texas also has a solar rights law, which means an HOA cannot prevent you from going solar in most cases.
Oncor: Oncor serves about 100 counties in Texas, including major cities like Dallas. If you live in one of their service areas and install a solar system with a battery, you can qualify for a rebate as long as the solar system meets certain technical requirements. The rebate will change based on your system, but it could help you save up to $8500. This rebate will simply bring down the cost to go solar, rather than come to you as a rebate
Austin: If you live in Austin, you can get a rebate for $2500, in addition to the 30% federal tax credit. To earn the rebate, you must complete their brief solar course, use an approved contractor, install a system larger than 3 kW, and receive a letter of intent, in addition to having a property that is connected to an Austin Energy account.
The City of Sunset Valley: Residents of Sunset Valley $1 per W of solar installed, up to $3000. This can be combined with the Austin Energy rebate, if you qualify, as well as the 30% solar federal tax credit. In fact, you must first apply for the Austin Energy rebate and your system cannot cost more than $6 per W.
How Much Can solar Panels Save In Texas?
It’s hard to say just how much you can save or how quickly any system will take to pay off, because each home has different characteristics. You may be able to save about $45,000 in 25 years, maybe even more if electricity prices increase. Based on some of the numbers above, on average it takes about 13 years to pay off a solar system in Texas, although many see faster payback periods.
Keep in mind thats an average between all homes, even those without net metering. If you have access to net metering and solar incentives it may take you less time to pay off the system.
Your financing option maters as well. If you pay cash you can expect to save the most money. If you pay with a solar loan, you’ll have slightly less savings that paying in cash. This is because your system will be designed such that you are paying equal or less than what you pay for your electric bill. This potentially lets you save money right away, since you’ll have a much lower or non-existent electric bill.
Pros and Cons of Going Solar In Texas
Pros
- You can save thousands of dollars in the long run. Solar power can save an estimated $40,000 over 25 years, but will continue to save you money longer into the future as well.
- Solar power is good for the environment. It takes about 2-3 years to generate enough clean power for solar to account for its impact.
- Solar can increase the value of your home. Your taxes are protected against as a result of higher home value.
- If you have a battery system, solar can still power your house even during power outages.
Cons
- Some people won’t qualify for the solar tax credit. In Texas there aren’t a lot of additional incentives. Without the right incentives, going solar in Texas may be expensive or have long payback periods.
Recommended Solar Installers
If you are interested in going solar and want to get access to solar providers that are all licensed, insured and vetted with great reviews by their customers, check out EnergySage.
A major advantage of using EnergySage is their solar providers cannot annoy you with unwanted calls, texts, emails, or even house visits. The entire experience of finding solar providers and comparing quotes can be done online.
By comparing quotes among many trusted companies, you may even save money without sacrificing quality. You can also get connected to an energy advisor. Be sure to get multiple quotes so that you choose the solar provider with the best price, work history and customer reviews.