Texas
In This Guide
Solar in Texas
Texas ranks 7th for residential solar installations nationwide, and with electricity prices increasing 28% from 2020 to 2024, more homeowners are exploring clean energy solutions. Whether you’re considering solar panels for your home or simply want to understand the process, you’re in the right place.
This guide covers everything you need to know about solar installation in Texas, from permits and incentives to choosing the right system for your home.
Key Takeaways
- Texas ranks 7th nationally for residential solar with 122,000 households already using clean energy to power their homes.
- Federal tax credits cover 30% of installation costs while Texas property tax exemptions provide additional long-term savings.
- Average Texas homeowners save $79,000 over 25 years with solar systems paying for themselves in about 8 years.
Solar Cost in Texas
Our Texas solar cost calculator uses real installation data from thousands of homes across Houston, Dallas, Austin, San Antonio, and Fort Worth. Get personalized pricing based on actual local projects, not industry estimates.
System
Cost
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 steadily 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 homeowners to generate their own electricity, reducing dependence on the grid and providing protection against these rising utility rates.
Over 25 years, solar systems can provide predictable energy costs while utility rates continue climbing, offering long-term financial stability for Texas families.
Price of Energy: Texas vs National Average
Texas Area Utility Providers
Texas utility companies offer electricity rates that are generally below national averages. In 2023, most major utilities charged between 10.3¢ and 14.7¢ per kWh compared to the 16.0¢ national average.
Texas benefits from diverse energy sources including natural gas, wind, and solar generation, helping keep electricity costs competitive. However, rates vary significantly by utility and region across the state.
Understanding your utility’s rates helps evaluate solar’s potential savings. With electricity costs rising 28% since 2020, solar panels can provide predictable energy costs for decades ahead.
Texas Utilities Electricity Rates
Texas Solar Incentives
Texas homeowners can significantly reduce solar installation costs through federal and state solar incentives in Texas.
The federal solar tax credit covers 30% of installation costs, while Texas offers property tax exemptions and net metering opportunities through most utilities.
These incentives can change over time, so research current programs thoroughly and consider acting promptly to maximize savings.
$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 who install qualifying renewable energy systems won’t pay property taxes on the added value these systems bring to their homes. This exemption applies to both solar panels and wind energy equipment that you install on your property.
The financial benefit varies based on your system’s value and local tax rates, but it can result in significant savings over time. For example, if you install a $30,000 solar system and your local property tax rate is 2%, this exemption could save you $600 annually in property taxes. The exemption covers the full appraised value that the renewable energy equipment adds to your property.
To qualify, your solar or wind system must be designed primarily to produce energy for on-site use. You’ll need to apply for this exemption with your local appraisal district using Form 50-123, and applications are generally due before May 1st. The exemption continues as long as you own the qualifying equipment, making it a long-term benefit that can help offset the initial investment in your renewable energy system.
Net metering and net billing programs in Texas vary significantly by utility company, but they all allow homeowners with solar panels to receive credit for excess electricity they send back to the grid. Unlike traditional net metering where you receive full retail credit, most Texas utilities now offer net billing, which provides credits at lower wholesale rates typically ranging from 3 to 8 cents per kilowatt-hour (kWh).
The financial benefits depend on your specific utility company. Some utilities like CPS Energy and Grayson Collin Electric Cooperative still offer true 1:1 net metering, while others provide export credits through programs like Shell Energy’s Buyback Plan at 7 cents per kWh. Many utilities charge additional monthly fees ranging from $4.95 to $30 for solar customers. Credits typically roll over month to month but are often forfeited each December without payout, though some utilities allow year-to-year carryover or cash out excess credits when they reach certain thresholds like $50.
Eligibility requirements vary by utility, but generally any residential customer with an approved solar installation can participate. Most programs require you to work with your local transmission and distribution utility (TDU) and may need to select specific retail energy providers (REPs) in deregulated areas. There are no statewide deadlines, but some utilities have changed their programs recently – for example, Shell Energy reduced their buyback rate from 15 cents to 7 cents per kWh in April 2024.
Important considerations include understanding that Texas has a deregulated electricity market in many areas, meaning you’ll need to choose both a TDU for delivery and a REP for supply. Monthly settlement is common, with excess credits typically not carrying significant value compared to the retail rate you pay for electricity. Before installing solar, contact your specific utility to understand their current net metering or net billing policies, as these programs can change and vary dramatically even within the same region.
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. High temperatures and occasional weather variations affect production, but proper system design maximizes year-round energy generation.
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 going solar! Explore this interactive map to discover which communities near you have already made the switch to clean energy.
Leasing Solar Panels
Texas homeowners have flexible solar financing options through Palmetto’s LightReach program, which varies by utility company. Most major utilities offer either Power Purchase Agreements (PPAs) or lease options, providing alternatives to traditional cash purchases.
With a solar lease, you pay a fixed monthly amount, while PPAs charge per kilowatt-hour of electricity generated. Both options eliminate upfront costs and include comprehensive maintenance, making solar accessible without the large initial investment required for ownership.
Palmetto’s LightReach program handles everything from design and installation to ongoing maintenance and monitoring. Unlike traditional ownership, you start saving immediately without worrying about system performance or repairs, backed by our 90% production guarantee and comprehensive protection program.
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. The state ranks 7th nationally for residential solar installations, with 122,000 households already benefiting from clean energy.
Texas homeowners save an average of $79,000 over 25 years with solar systems that typically pay for themselves in about 8 years. With abundant sunshine, federal tax credits covering 30% of costs, and property tax exemptions, solar provides both immediate and long-term financial benefits for Texas families.
Texas does not have traditional statewide net metering, but most utilities offer net billing or export credit programs that provide compensation for excess solar production sent to the grid.
Credit rates vary by utility company, typically ranging from 3-8 cents per kWh compared to retail rates of 12-15 cents. Some utilities like CPS Energy and Grayson Collin Electric still offer 1:1 net metering, while others use Shell Energy’s buyback program at 7 cents per kWh with monthly fees.
Yes, solar panels typically increase home value in Texas. Research from Zillow shows solar panels increase home value by 4.1% on average nationwide, with Texas homeowners seeing similar benefits.
Additionally, Texas offers property tax exemptions for solar installations, meaning you won’t pay higher property taxes on the added value solar brings to your home. This combination of increased market value and tax protection makes solar an attractive investment for Texas homeowners.
Solar installation costs in Texas average $27,296 for a typical 9.72 kW system. After applying the 30% federal tax credit, your final cost drops to approximately $19,107.
This system typically saves Texas homeowners $179 monthly on electricity bills and pays for itself in about 8 years. Over 25 years, most families save around $79,000 while protecting against rising utility rates.
Yes, solar is financially worth it for most Texas homeowners. With average savings of $79,000 over 25 years and systems that pay for themselves in about 8 years, solar provides strong long-term returns.
The 30% federal tax credit and Texas property tax exemptions reduce upfront costs, while monthly savings of around $179 provide immediate benefits. Rising electricity rates make solar’s fixed energy costs even more valuable over time.
We’re Palmetto Solar, a national company with deep Texas roots. Since 2020, we’ve completed 3,810 solar installations across Texas, serving communities from Houston to Dallas to Austin.
We offer competitive financing options and work with trusted local installation partners throughout the state. Our focus is on quality installations, transparent pricing, and long-term customer relationships that help Texas families transition to clean energy with confidence.