* Cost data based on quotes for fully-installed solar panel systems submitted on our platform. Prices are shown after applying the 26% federal tax credit.
The investment return and savings that can be made by buying solar panels vary more by city and utility in Texas than in any other state in the country. This is largely due to the fact that the majority of Texas’s electric utilities are deregulated, making it possible for people in most cities to choose which retail electric provider they want to use. This causes a lot of variation in the amount of solar savings Texans can get.
In cities like Austin and San Antonio, upfront utility rebates are abundant. In the Dallas/Fort Worth area, Oncor offers a rebate program that can make installing solar plus storage a solid investment for homeowners. Available utility incentives, coupled with the 26% solar tax credit make it possible that a solar installation will pay back its cost in 10 years or less!
In other places in Texas, especially those served by rural electric co-ops, solar incentives are few and far between. However, many do offer solar buyback programs so their customers can still see some solar savings. In areas without upfront utility rebates, the solar payback can take up to 15 years.
The average cost for an installed residential solar system in Texas is currently $12,312 after claiming the 26% federal solar tax credit. This is $2.77 per watt. However, there is some variance in solar prices in different parts of the state. The graph below shows the average cost of installed solar systems in your part of the state.
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Prices based on a 5.5kW system, after 26% federal tax credit
Solar panels have fallen in price by more than 80% in the last ten years. In 2020 they also remain subsidized by the 26% federal tax credit and the net metering law, making them an excellent investment. They offer a return well above the long term average return from both the share market and also property investment.
Another way to look at this question is the levelized amount you will pay for each kWh of power you will use over the next 25 years with and without solar panels. As you can see below the savings are significant.
(forecast avg Texas electric rates over the next 25 years)
The most significant incentive to install solar panels for homes and businesses is the federal solar tax credit. At the end of 2022, the amount of the credit will decrease from 26% to 22% of the cost of the solar installation. If you want the largest incentive amount possible and to maximize your solar savings, you should consider going solar sooner rather than later.
Texas does not have any state-wide rules or regulations when it comes to net metering. Despite that, there are a few retail electric providers and many utilities who do offer some form of a solar buyback program to credit you for excess solar energy produced on your roof. What plans are available to you depends on if you’re in a deregulated part of the state or not. You can check out our comprehensive breakdown of net metering and solar buyback plans in Texas to get a better idea of what you can expect if you go solar.
A few utilities offer upfront incentives that you can use in addition to the solar tax credit. In Austin, you can get up to $2,500 from Austin Energy, in addition to their Value of Solar billing program. San Antonio residents also have access to a $2,500 incentive if the solar system qualifies.
If you live in Oncor’s or AEP Texas' service territory, you're also in luck. These transmission and distribution utilities offer incentives that can be worth thousands of dollars, so long as your system qualifies.
There are a few other local incentives that municipal utilities and towns may offer, so keep an eye out! The solar installer you choose will also be able to help you find all the ways to save in your area.
One statewide incentive that is available to Texans is a property tax exemption. That means all the value added to your home by solar panels is exempt from additional property taxes.
(After tax credit)
(After tax credit)
You will save most money by buying your solar system rather than leasing it. Read more about the pros and cons of leasing vs buying solar.
Minimum of 25 years but generally 30 or more
Solar panels power your house when they can but your home uses the utility company for power at other times. In 2022 "solar systems with battery storage" are becoming more popular. These are known as hybrid systems.
A grid-tied system is the most common type of solar system. It has no solar battery for backup power and utilizes net metering to maximize savings. Solar panels are mounted on your roof then wired together, and the power generated flows into an inverter where direct current (DC) electricity is converted into alternating current (AC) electricity. This electricity is either used by your home or is exported to the utility grid.
In hybrid solar systems, rooftop solar panels are connected to both a solar battery and the electric grid. The solar electricity generated by your panels that your home does not use is stored in the battery instead of being sent to the grid, which reduces your reliance on the utility while also providing backup power when needed. Battery storage is still expensive but you may be able to reduce costs by using state incentives.
Off-grid solar systems are not connected to the grid at all, so all of your energy needs must be met by the sun. There is no utility to fall back on. The solar installation needs to power your home not only during the day, but after dark as well, so many solar panels and a large battery system are required. These systems are often expensive and don’t make sense for homes that have access to the grid.
Read more about types of home solar systems.
No, but cleaning them can improve power generation if they are dirty.
Given this environment, and the effect of import tariffs placed on solar panels by the Trump administration during 2018, it is hard to see that solar power system prices in Texas will fall during 2022.
Depending on the location, solar panels will generate different amounts of electricity.
A solar system that is installed on a south-facing 20-degree pitch roof Texas will generate 1,360kWh of peak DC (direct current) capacity per year per 1kW in the Houston area.
Enter your details into the solar panel calculator to see how your location, roof tilt, and roof direction impacts solar panel production.
The biggest advantages in Texas for installing solar panels are the big-city solar rebates and the 26% federal tax credit. That property tax exemption for the value added to your home by solar panels is nice to have, too.
Texans also use a lot of electricity to run air conditioners in the summer, so they can stand to save quite a lot of money by installing solar. Not to mention, Texas gets a lot of sun, so solar panels can produce quite a bit of electricity here compared to not-so-sunny states.
The biggest con of solar in Texas is that most Texans don't have access to full retail net metering, which ultimately means lower solar savings. There's also a limited number of retail electric providers that offer solar buyback programs at all, so it really limits your choices on what company to go with if you live in a deregulated area of the state.
Plus, there aren't a ton of solar rebates offered outside of the big cities or service territories of major investor-owned utilities, which ultimately extends your solar payback period.
This solar calculator requires you to input your address, utility company, your average monthly power spend - it tells you:
If you want to see all of the above but also see live pricing, the three best solar deals available in your city and get binding quotes from each of these solar companies then use this Texas solar panels calculator. This calculator requires you to also input your name and contact details because most of our 200+ installer partners will only authorize the sharing of their live solar pricing where we have validated that you are a real homeowner with a home in their service area. We respect the privacy of your data and only share your contact details with the solar companies you ask us to get binding quotes from.
Note: Please keep in mind that the best source of up-to-date information on incentives are the solar installers who specialize in your area.