Demand for solar panels in Texas is surging. Partly this is because solar prices have dropped so much in recent years. And partly it’s because of the continuing fallout of the major power outages affecting millions across the state in the winter of 2021.

Solar Panels Texas Guide for Homeowners

Whether you’re looking to save money, become energy independent, and/or power your home with green energy, solar is a very appealing option for many in Texas. If you’re a Texas resident thinking about going solar, you’ll find information below about the costs, incentives and whether solar is worth it in the Lone Star State.

How Much Do Solar Panels Cost in Texas?

Solar is generally priced on a per watt basis. And, in Texas, most of the estimates peg the cost of solar panels around $2.75 to $2.80 per watt. For an average size solar installation, that puts the total cost for installing solar panels in the $12,000 – $15,000 range.

But honestly, those averages aren’t really going to tell you much.

Because the cost of putting solar on your house can vary widely. Things such as:  

  • Your goals for solar (ie. do you want to go off grid or just reduce your electric bills)
  • How many solar panels you need
  • The company you choose
  • The brand/type of solar panels you get, and…
  • Whether you want a battery storage system will play a big role in what your cost will be

Not only that, but when considering solar, it’s not just the upfront costs you’ll want to consider. You also need to factor in the incentives you may be able to get that can reduce your overall costs.

How Much Can You Save With Solar?

You’ll also want to factor in the savings you’ll be able to get on your electric bills. Because, for many homeowners, investing in solar panels now leads to big savings down the road. Over a 20-year period, many solar panel owners can save tens of thousands of dollars by switching to solar and getting rid of (or significantly reducing) their electric bills.

So the only way to know how much solar will cost you, what incentives you can get and how much you can save is to get a quote (or better yet, a few of them) from local solar installers.

Texas Solar Incentives

The state of Texas doesn’t have many statewide solar incentives. There’s mainly a patchwork of incentives offered by some municipalities and power companies.

Renewable Energy Property Tax Exemption

One incentive that is statewide is the Renewable Energy Property Tax Exemption. Many states have this incentive for solar. What it does is prevents any increase in property taxes on your home due to the increased value of putting solar on your roof.

One nice benefit of solar is that it does increase the value of your home. With this tax exemption, however, it’s nice to know that you won’t pay more in property taxes due to this bump in your home’s value.

Solar Rights Law

Texas also has a Solar Rights Law. This means if you live in a development that has a Homeowner’s Association, your HOA can’t prevent you from putting solar panels on your home.

Net Metering

When it comes to solar incentives, net metering is a big one. Net metering comes into play if your solar panels produce more electricity than you need. If you have net metering, then you can sell this “extra” electricity back to the power company.

There is no statewide net metering in Texas. However, there are net metering programs offered by some power companies in the state such as American Electric Power, Amigo Energy, Austin Energy, CPS Energy, El Paso Energy, Green Mountain Power, ITC, Reliant and TXU.

How much you get paid for the excess power you produce can vary widely. To see how net metering works in your area, check with your power company or a local solar installer.

Texas Solar Rebates

As with solar incentives, the solar rebates available in Texas depend on where you live and what energy provider you have. The amount of the rebate also depends on the size of your solar installation.

Many of the municipalities and/or energy providers that offer rebates only have a limited amount of money set aside for these programs. So, depending on when you get solar, the money may have already run out (another good reason to get solar sooner rather than later!).

Here are some of the solar rebates that are currently available in Texas.

American Electric Power offers a rebate of $1,500 for 3kW – 5kW systems, $2,500 for 5kW – 7kW systems and $3,000 for over 7.5kW systems.

Austin Energy has a $2,500 rebate plus a nice net metering program that gets you a solar credit of 9.7 cents per kWh

CoServ Electric offers a tiered structure that can get you a rebate of up to $3,100 per system. They also offer a net metering program.

CPS Energy’s program aims to increase solar panel installation for low-income homeowners. This program has a rebate of $1,500 per installation. But funds are limited so you’ll want to check on the availability of the rebate.

Farmers Electric Cooperative used to offer a modest $500 rebate. But this program is currently closed. It may reopen some time in 2022 so you’ll want to look into this if you use FEC.

Guadalupe Valley Electric Cooperative had a rebate of up to $3,000 but it’s subject to availability and may soon be gone.

Heart of Texas Electric Co-op offers up to a $500 rebate for solar installations.

New Braunfels Utility will give homeowners who put solar on their homes up to a $3,000 credit on their bill.

Oncor has a program that’s only available to homeowners who get a solar + battery backup system. The amount of the rebate varies so you’ll want to check what you may qualify for. However, the rebate here could be up to $5,000.

Federal Solar Tax Credit For Texas Homeowners

There is one solar credit that all homeowners in Texas qualify for and it’s a nice one. It’s offered through the Federal government.

This gives you a 30% dollar for dollar tax credit on your federal taxes on the cost of your solar installation. The cost it’s based on includes everything that goes into installing solar – the panels, labor costs, battery storage and any other equipment needed to get solar on your home.

If your system costs $15,000, that means you’ll get a $4,500 tax credit on your tax return. In this situation, if you were to owe the IRS $5,000, after the tax credit you would only owe them $500.

Are Solar Panels Worth It in Texas?

It’s a great time to buy solar for many in Texas. A combination of a lot of long, sunny days, below-average solar costs, and wildly unpredictable electric prices (and supply) make Texas one of the top states for solar right now.

But the window may not last much longer.

Right now we’re in a sweet spot of low solar panel costs (costs have fallen more than 70% over the past 10 years) and a great tax credit from the federal government.

Is Time Running Out?

But if you don’t act soon, you may lose out. Why?

  • Costs on solar panels look to be on the rise. A combination of material shortages, tariffs on imported panels and supply chain issues lead many to believe prices for panels may surge fairly soon.
  • As already mentioned, the 30% tax rebate is going away soon and those that wait will miss out on thousands in tax credits to offset the cost of their solar installation. (This is no longer the case with the August 2022 passage of the Inflation Reduction Act which increased the federal tax credit and extended it for 10 years. All this is GREAT news for homeowners who want to go solar.)
  • Many solar tax rebates/credits in Texas have limited availability and you may miss out (if you haven’t already).
  • More extreme weather and continued power grid problems aren’t going away anytime soon. This is increasing the demand for solar panels and batteries. This means wait times for installation are on the rise.
  • The longer you hold off, the more you miss out on saving money on your monthly electric bill. Estimates are the average Texas homeowner who goes solar can save tens of thousands of dollars over the lifetime of the panels (20+ years).

Solar in Texas: The Bottom Line

The average electric bill in Texas is around $140 a month. But due to the disaster in the winter of 2021, many Texas homeowners (who had to endure days without power) saw their bills spike to ridiculous levels.

However, customers who were energy independent due to solar + battery storage kept their lights on and were not hit with huge electric bills.

For many reasons, solar makes sense for a lot of Texas homeowners. Not all. But many. If you haven’t already, you owe it to yourself to at least see how much solar would cost you and how much you can save.

We highly recommend you get at least one of your quotes from the #1 Solar Advisor in the U.S., UnderstandSolar. They have relationships with the largest, most trusted solar installers to provide homeowners with free, accurate, no-obligation solar savings estimates.

To get started, just enter your zip code below and fill out the form on UnderstandSolar’s site to get an accurate savings estimate from a trustworthy local Texas solar installer.

At least get some numbers to see if solar makes sense for you or not. If it doesn’t, that’s totally okay. There’s no obligation. But at least you’ll do so know knowing you’ve made an informed decision.

And, by taking this first step now, you may just end up saving yourself a HUGE amount on your electric bills in the years and decades to come. So it’s a good idea to get a savings estimate now while you can still take advantage of low solar panel costs and fat tax credit from the government.