Calculate how much you can save on your AEP bill with solar panels

Average 25 year solar savings for a AEP customer: $55,623

Average solar panel cost: $14,379 - $17,574*

Estimate solar panel cost and savings based on your location, roof and power use.

*Solar panel cost varies by location, solar panel mqanufacturer, system size and the amount of electricity your home uses.

Adding solar panels and switching rate plans can lower your American Electric Power electric bill

Updated: October 22, 2020

There are three ways you can reduce your AEP bill: changing your habits, switching your rate plan, and adding solar panels.

You've probably heard a lot about reducing energy consumption by doing things like switching to LED lightbulbs and adding insulation to your walls, but these fixes are relatively easy compared to the far more impactful step of making changes to your lifestyle.

The second thing you can do is switch your rate plan. AEP doesn't offer time-of-use billing that can help you save money by shifting your usage of energy-intensive appliances to off-peak hours, but there may be other options for you .

Finally, you can reduce or even eliminate your electricity bill by installing solar panels on your home.

Solar panel cost calculator

How much can I reduce my American Electric Power bill by switching to a different rate plan

For some people, the savings from switching rate plans may only be a few dollars per month, but for many it can be $20-$100 per month. That's between $240 and $1,200 that you may now be paying to American Electric Power each year for no reason.

Finding out what's available to you is as simple as a phone call or email to American Electric Power. Even a small savings can be worth it.

Are solar panels worth it for American Electric Power customers?

Probably. With the Federal solar tax credit, and available Texas solar property tax exemption, home solar panels are an investment worthy of your careful consideration as an American Electric Power customer. When signing up with a retail electricity provider, look for one which offers solar net metering rates. Then you can also get some credit on your power bill for the excess solar electricity your panels produce which you can’t use onsite. Your credits, while potentially accruing at a lower rate than you pay for electricity, will roll over to the next month’s bill.

Does American Electric Power offer full 1 for 1 net metering credits for exported solar power

AEP Texas is what's known as a transmission and distribution utility. They run the grid and deliver your power, but the energy you buy comes from a retail electric provider (REP).

The rates you can get for excess solar power will vary based on which REP you choose, and there are several who currently offer programs very much like net metering, where you earn a 1-to-1 credit for every kilowatt-hour you send to the grid that reduces your bill based on the retail price.

When you speak to solar companies in your area, be sure to ask which REP to choose to getthe most value out of your solar panels.

What incentives, tax credits and rebates are available to AEP customers for installing solar?

The major financial incentive currently available until the end of 2023 is the 30% federal solar tax credit. The way this works is that the full cost of the system needs to be paid to the installer, and this tax credit can then be claimed back as cash when you next do your taxes.

Many states, local governments and utilities also offer incentives for homeowners who go solar. This help can take the form of state tax credits, rebates, tax breaks, SRECs or even performance-based incentives. The best part is that all of these incentives apply in addition to the federal credit.

Here is every incentive you may be eligible for as a AEP customer:

Table 1: Incentives
Upfront Incentives Value*
Residential Clean Energy Tax Credit (Federal) -$6,847
Renewable Energy Property Tax Incentive (State)

100% of cost of solar system not included in property taxes.

TOTAL -$6,847

*Based on 9.76 kW system, average installation cost $22,824

Who are the best solar installers near you?


How much does installing solar panels save the average American Electric Power residential customer?

If you input the details for a AEP customer with a power bill of $210 per month into the best online solar panels calculator, it tells you that you need a 9.76 kW solar system that will produce 13,719 kWh per year and that this system will return the owner a $55,623 profit after repaying the cost of the system.

The solar savings possible for you as an AEP customer will depend on the amount of electricity you use and the cost of the solar system you buy. Savings also vary based on the direction of your roof or any shading of your roof that affects output.

Here is a monthly and lifetime solar savings estimate for the same relatively typical AEP customer with a $210 per month electric bill prior to solar and who installs a 9.76 kW solar system.

How much do residential solar panels cost for AEP customers?

Showing data for:

Utility provider: AEP Texas Central Company
Utility bill: $ 241

Prices based on a 9.8kW system, after 30% federal tax credit

Solar prices near you

Cost range of local prices


Net profit (savings less system cost)


Payback period

4.5-5.5 years

Recommended size for the selected utility bill


Solar panel cost calculator

Detailed information about your estimate

Table 2: Estimate details

System Size (for 100% usage offset)

9.76 kW

Annual Power Generation

13,719 kWh

Pay-back time (assuming Cash purchase)

7.7 Years

Internal Rate of Return (IRR) on Investment


Gross cost


Total Upfront Incentives and Rebates


Net Cost of System after rebates and incentives


Total Cost of Utility Power Avoided over 25 years


Please note that the investment return figures do not include the possible increase in property value.

What are the environmental impacts of American Electric Power customers installing solar panels?

While most homeowners decide to install solar panels because of financial savings over time, the environmental impacts of this choice are the primary motive for others. Here is a breakdown of the environmental benefits from an American Electric Power customer installing a 9.76 kW solar system on their property:

A solar system generating 13,719 kWh per year will save you money AND make the world a nicer place

Saves you


on average per year

Reduces CO2 emissions


tons per year

Equivalent to planting

48 trees

per year

Equivalent to driving

15,023 mi

less per year

CO2 emissions calculation based on the electricity generation and emissions data for your state in 2015 as published by the US Government Energy Information Administration.

What factors affect the price of solar panels for American Electric Power customers?

The cost of installing solar panels will vary with brands of solar panels and inverters you choose and also the installation company you choose to install them.

It is common to see really good systems, using quality brands of equipment, being sold for around $2.34 per watt or $16,892 for a standard 9.76 kW solar system after the customer claims the 30% federal solar tax credit.

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