Solar Guide
Solar in Austin
Austin’s abundant sunshine makes it a prime location for solar energy, with Texas ranking 7th nationwide for residential solar installations. As electricity prices have surged 28% from 2020 to 2024, many homeowners are turning to solar panels for their homes to reduce energy costs.
This guide provides essential information about solar installation in Austin to help you make an informed decision.
Key Takeaways
- Austin receives excellent solar irradiance year-round with 300+ sunny days annually, making it ideal for solar energy production.
- Texas offers valuable solar incentives including a 30% federal tax credit and property tax exemptions for solar installations.
- Solar panels provide long-term energy cost stability while Austin electricity rates have increased 23% since 2021.
Solar Cost Calculator
Our Austin solar cost calculator uses real installation data from neighborhoods like Cedar Park, Round Rock, and Pflugerville. Get personalized pricing based on actual local projects, not estimates.
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Cost
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Austin Electricity Prices
Understanding Austin’s electricity costs helps homeowners make informed decisions about their energy future and potential savings.
Texas electricity rates have climbed from 12.1 cents per kWh in 2021 to 14.9 cents in 2024, representing a 23% increase over three years.
Solar panels allow Austin homeowners to generate their own electricity, reducing dependence on the grid and protecting against future rate increases.
With solar systems typically lasting 25+ years, homeowners can lock in predictable energy costs while electricity rates continue their upward trend.
Price of Energy: Texas vs National Average
Austin Area Utility Providers
Austin residents benefit from electricity rates below national averages in 2023. Austin Energy charged 13.0¢ per kWh, while Bluebonnet Electric and Pedernales Electric Cooperative offered even lower rates at 11.1¢ and 11.7¢ respectively.
These competitive rates reflect Texas’ deregulated energy market and abundant natural resources. All three utilities maintained prices below the national average of 16.0¢ and state average of 14.5¢ per kWh in 2023.
Even with favorable electricity rates, solar panels provide long-term price stability and protection against future rate increases. Solar energy offers predictable costs while reducing dependence on traditional utility pricing structures.
Austin Utilities Electricity Rates
Texas Solar Incentives
Austin homeowners can significantly reduce solar installation costs through various solar incentives in Texas and federal programs.
Texas offers a property tax exemption that prevents solar installations from increasing your home’s taxable value, saving hundreds annually on property taxes.
Net metering programs allow Austin Energy customers to receive credits for excess solar energy sent back to the grid.
$8,189
Average savings in Texas solar rebates
| Incentive | Type | Description | Source |
|---|---|---|---|
| Residential Clean Energy Credit | Federal tax credit | A federal tax credit worth 30% the cost of a solar panel system in the year it’s installed | Learn More |
| Property Tax Exemption | State tax exemption | No property tax increase from solar installations. Example: $20k system saves ~$400/year at 2% tax rate. | Learn More |
The Residential Clean Energy Credit lets people claim a tax credit worth 30% the cost of a solar panel system in the year it’s installed. The credit can only be used against taxes you owe or have already paid that year, but any excess credit can be rolled over to future years.
The credit is broadly available, though there are a few restrictions — you must own the panels and they must be on a house you live in — so be sure to consult a tax professional about your situation.
Texas offers a property tax exemption for solar and wind-powered energy devices, which means homeowners can exclude the added value of their solar installation from their property tax assessment. When you install solar panels on your home, they typically increase your property’s appraised value, but this exemption ensures you won’t pay additional property taxes on that increased value.
To qualify for this exemption, your solar energy system must be installed on property you own and use as your residence. You’ll need to apply for the exemption with your local county appraisal district using Form 50-123 before the May 1st deadline. The exemption continues as long as you own the property and the solar system remains installed. This benefit can result in significant long-term savings, as it protects you from paying higher property taxes due to your solar investment while still allowing you to enjoy the increased home value when you sell.
Net metering in Texas varies significantly by utility company, with most areas offering either traditional net metering or net billing (export credit) programs. Under traditional net metering, your solar panels’ excess electricity production is credited against your monthly consumption on a 1:1 basis, meaning you receive full retail value for the power you send back to the grid. With net billing programs, you receive credits for exported electricity at rates typically ranging from 1.4 to 9.9 cents per kWh, which is usually lower than the retail rate you pay for electricity.
The financial benefits depend heavily on your specific utility company and location within Texas. Some utilities like Grayson Collin Electric Cooperative offer true 1:1 net metering with credits that roll over year to year, while others like Shell Energy’s Buyback Plan (available through major transmission companies like Oncor and CenterPoint) provide 7 cents per kWh for exported electricity. Many utilities settle accounts monthly, meaning excess credits don’t carry forward, while others allow rollover until December when unused credits are typically forfeited. Some programs include additional monthly fees ranging from $4.95 to $30, so it’s important to calculate whether the export credits will offset these charges based on your expected solar production.
Ready to start saving with solar?
Speak with a Palmetto solar expert to find out exactly how much you can save with Texas incentives.
Get a Free QuoteAustin Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Understanding how seasons affect your solar system helps set realistic expectations for your investment.
Austin’s abundant sunshine and mild winters create excellent solar conditions year-round, despite occasional cloudy days and summer heat affecting panel efficiency slightly.
Solar Production in Austin by Month
What Can Your Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average homes (15 kWh/day per home)
- or Run central AC for 18 hours AND power all other appliances
- or Fully charge 5.4 Tesla Model 3 electric vehicles
Winter Production (December)
In December, your 10 kW system could power:
- 2 average homes (15 kWh/day per home)
- or Keep your home heating system running for 15 hours
- or Fully charge 3 Tesla Model 3 electric vehicles
Annual Production
Over a year, your 10 kW system could:
- Offset 10 tons of carbon dioxide emissions
- or Equal the environmental benefit of planting 175 trees
- or Save approximately $4,234 in electricity costs
Want to know exactly how much solar can power your home?
Get a personalized solar analysis based on your actual home, energy usage, and roof characteristics.
Get My Custom EstimateSolar Installations in Austin
We’ve mapped every solar installation across the United States to show you how Austin neighborhoods are embracing clean energy. Click any hexagon to discover how many of your neighbors have already made the switch to solar power!
Leasing Solar Panels
Austin homeowners have flexible financing options beyond traditional cash purchases. Austin Energy customers currently have no LightReach availability, meaning traditional leasing and PPA options aren’t available through this utility. However, other financing solutions exist.
With traditional ownership, you handle all maintenance and repairs yourself. LightReach eliminates these concerns by providing comprehensive maintenance and monitoring services. This approach removes the burden of system upkeep while delivering immediate solar savings.
For Austin residents, exploring solar financing alternatives helps determine the best path forward. While direct ownership offers maximum long-term savings, alternative financing can provide immediate benefits without large upfront investments or ongoing maintenance responsibilities.
Go solar without the investment
With LightReach, there are no investment costs to recoup, loan payments to manage, or maintenance needs to take on. As soon as your panels are active, your solar savings are too!
Learn MoreFrequently Asked Questions
Yes, solar makes excellent sense in Austin. The city receives over 300 sunny days annually with abundant solar irradiance, creating ideal conditions for solar energy production year-round.
Austin residents benefit from Texas’ 30% federal tax credit, property tax exemptions for solar installations, and protection against rising electricity rates. With average 25-year savings of $79,000 and payback periods around 8 years, solar provides strong financial returns while supporting Austin’s clean energy goals.
Austin does not have traditional net metering. Austin Energy uses a “Buy-All, Sell-All” system called Value of Solar, where all solar production is credited at $0.0991/kWh and all consumption is charged at retail rates.
This means even electricity you use directly from your panels is charged the retail rate plus given the solar credit. Excess credits roll over monthly but are forfeited each December without payout.
Yes, solar panels increase home value in Austin, TX. According to a Zillow study, solar panels increase home value by 4.1% on average nationwide. For Austin’s median home price of approximately $550,000, this translates to roughly $22,550 in added value.
Additionally, Texas offers a property tax exemption for solar installations, meaning homeowners won’t pay higher property taxes on the increased value while still benefiting from the home value appreciation when selling.
Solar costs in Austin vary by home size and energy needs. A typical 10 kW system costs around $27,296 before incentives, but the 30% federal tax credit reduces this to approximately $19,107 after rebates.
Smaller homes (5-7 kW systems) range from $14,179-$17,000 after incentives, while larger homes (10+ kW) typically cost $19,000-$25,000. Most Austin homeowners see 8-year payback periods with $79,000 in 25-year savings.
Yes, solar is financially worth it in Austin. With Texas electricity rates rising 23% since 2021 and abundant sunshine year-round, solar panels provide excellent returns for homeowners.
Austin residents typically see 8-year payback periods with $79,000 in 25-year savings. The 30% federal tax credit and property tax exemptions significantly reduce upfront costs, while solar systems protect against future rate increases and provide predictable energy costs for decades.
We are Palmetto Solar, a national company with local focus. We’ve completed 3,810 installations across Texas since 2020, demonstrating our proven track record in the Lone Star State.
Our comprehensive approach includes some of the industry’s best financing options and an extensive install network. We handle everything from permits to activation, ensuring a smooth solar experience for Austin homeowners seeking reliable, professional solar installation services.