Texas
In This Guide
Solar in Texas
Texas homeowners are turning to solar as electricity prices jumped 28% from 2020 to 2024. With abundant sunshine, the Lone Star State now ranks 7th for residential solar installations nationwide.
This guide covers costs, installation timelines, and how home solar panels work in Texas to help you make an informed decision.
Key Takeaways
- Texas electricity rates have increased 28% since 2020, making solar panels a smart hedge against rising utility costs.
- The federal tax credit covers 30% of installation costs, plus Texas offers property tax exemptions for solar systems.
- Average Texas homeowners save $79,000 over 25 years with solar panels offsetting their electricity bills.
Solar Cost in Texas
Our solar cost calculator uses real installation data from thousands of Texas homes in Dallas, Houston, Austin, San Antonio, and beyond. Get personalized pricing based on actual local solar projects, not estimates.
System
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Savings
Looking for More Detailed Texas City Guides?
Explore our comprehensive solar guides for major cities across Texas to find location-specific information on incentives, installers, and solar potential.
Texas Electricity Prices
Understanding Texas electricity costs helps homeowners make informed energy decisions for their homes and budgets.
Texas electricity rates have risen 23% since 2021, climbing from 12.1 cents to 14.9 cents per kWh by 2024.
Solar panels generate electricity from sunlight, helping homeowners reduce their dependence on the traditional power grid and rising utility rates.
Over 25 years, solar systems can provide stable energy costs while traditional electricity rates continue climbing year after year.
Price of Energy: Texas vs National Average
Texas Area Utility Providers
Texas utility companies offer electricity rates well below national averages in 2023. Most major providers charged between 10.3¢ and 14.7¢ per kWh, compared to the 16.0¢ national average.
Lower rates stem from Texas’ diverse energy mix, including natural gas, wind, and coal resources. The state’s deregulated market also promotes competition, keeping prices competitive for consumers.
Even with favorable rates, solar can provide long-term savings and energy independence. Fixed solar costs protect against future rate increases while reducing monthly electricity bills.
Texas Utilities Electricity Rates
Texas Solar Incentives
Texas offers valuable solar incentives in Texas that help reduce installation costs through federal and state programs.
The federal solar tax credit covers 30% of installation costs, while Texas provides property tax exemptions and net metering opportunities through most utilities.
These incentives can significantly reduce your upfront investment and ongoing energy costs when going solar.
$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 system 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 1 deadline each year. The exemption can provide significant long-term savings since property taxes in Texas are locally assessed and can vary by location, but you’ll avoid paying taxes on potentially thousands of dollars in added home value from your solar installation.
Net metering in Texas varies significantly by utility company, with most areas offering either traditional net metering or net billing (export credit) programs. Traditional net metering allows your solar panels to spin your electric meter backwards when producing excess energy, giving you a 1:1 credit for each kilowatt-hour (kWh) you send to the grid. Net billing programs, which are more common in Texas, credit you for excess solar production at rates typically ranging from 3 to 10 cents per kWh, depending on your utility company.
The financial benefits depend heavily on your specific utility provider. Some utilities like Grayson Collin Electric Cooperative offer true 1:1 net metering with credits that roll over year to year. However, most Texas utilities provide export credits at rates lower than retail electricity prices – for example, Shell Energy’s buyback program (available through major transmission companies like CenterPoint, Oncor, and AEP Texas) offers 7 cents per kWh for exported energy. Many utilities also charge additional monthly fees ranging from $4.95 to $30 for solar customers, and most programs reset or forfeit unused credits annually in December.
Eligibility typically requires installing an approved solar system and may involve working with specific retail energy providers (REPs) in deregulated areas of Texas. Important considerations include understanding that Texas operates both regulated utility areas and deregulated markets where you choose your energy supplier, which affects your net metering options. Additionally, many programs have monthly settlement periods rather than annual true-ups, and excess credits often don’t carry significant value beyond offsetting your current bill.
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 QuoteTexas Solar Irradiance
Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Texas’ abundant sunshine and long summer days create excellent solar conditions. While extreme heat can reduce panel efficiency, proper system design maximizes year-round energy production statewide.
What Can the Average Texas Solar System Power?
Summer Production (July)
In July, your 10 kW system could power:
- 3.6 average Texas 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 Texas 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 Texas
We’ve mapped every solar installation across America to show you something exciting: your Texas neighbors are embracing clean energy! Explore this interactive map to discover which communities near you have made the switch to solar power.
Leasing Solar Panels
Texas homeowners have flexible solar financing options through Palmetto’s LightReach program. Depending on your utility provider, you can choose between leasing or Power Purchase Agreements (PPAs). With a lease, you pay a fixed monthly amount, while PPAs charge per kilowatt-hour of energy produced.
Unlike traditional solar ownership, LightReach eliminates upfront costs and maintenance responsibilities. Palmetto handles installation, monitoring, and repairs while you enjoy immediate energy savings. Our 90% Production Guarantee ensures your system performs as expected, with credits for any shortfall.
This approach offers predictable energy costs and professional system management compared to buying solar outright. You avoid the complexity of ownership while accessing clean energy benefits from day one, making solar accessible regardless of your financial situation or technical expertise.
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 Texas. With abundant sunshine, rising electricity rates, and strong incentives, Texas homeowners can achieve significant savings through solar installation.
Texas electricity rates have increased 28% since 2020, making solar panels an effective hedge against rising utility costs. The federal tax credit covers 30% of installation costs, while Texas offers property tax exemptions for solar systems.
Texas doesn’t have statewide net metering, but policies vary significantly by utility company. Most areas offer either traditional net metering or net billing programs that credit excess solar production.
Traditional net metering provides 1:1 credits for energy sent to the grid, while net billing typically offers 3-10 cents per kWh. Programs like Shell Energy’s buyback plan serve major areas including Dallas, Houston, and Austin at 7 cents per kWh.
Yes, solar panels increase home value in Texas. According to a Zillow study, solar panels increase home value by an average of 4.1% nationwide, which translates to approximately $10,000-$15,000 for typical Texas homes.
Texas also offers property tax exemptions for solar installations, meaning homeowners enjoy the increased property value without paying additional taxes on that improvement. This makes solar an attractive investment for Texas homeowners looking to boost their home’s market value.
The typical cost to go solar in Texas is $19,107 after federal tax credits for a 9.72 kW system that offsets 100% of electricity usage. Before incentives, the average system costs $27,296.
The 30% federal tax credit reduces costs by $8,189, while Texas property tax exemptions provide ongoing savings. Most Texas homeowners save $179 monthly with an 8-year payback period.
Yes, solar is financially worth it in Texas. Average homeowners save $78,676 over 25 years with monthly savings of $179 and an 8-year payback period.
With Texas electricity rates rising 28% since 2020 and the 30% federal tax credit plus property tax exemptions, solar provides strong returns while protecting against future rate increases.
We believe Palmetto Solar is the best solar company in Texas. Since 2020, we’ve completed 3,810 installations across the state, building trust through excellent customer service and quality workmanship.
Our financing options and professional install network make solar accessible to Texas homeowners. We focus on transparency, long-term relationships, and ensuring customers feel confident throughout their solar journey.