Texas
In This Guide
Solar in Texas
Texas ranks 7th for residential solar installations nationwide, with electricity prices rising 28% from 2020 to 2024. More homeowners are turning to solar for energy independence and long-term savings.
This guide covers everything about solar panels for your home in Texas, from installation basics to financial benefits.
Key Takeaways
- Texas ranks 7th nationally for solar installations with 122,000+ households already making the switch to clean energy.
- Federal tax credits save Texas homeowners $8,189 on average when combined with the 30% residential clean energy credit.
- Solar systems pay for themselves in 8 years while providing $78,676 in total savings over 25 years.
Solar Cost in Texas
Our Texas solar cost calculator uses real installation data from homeowners across Houston, Dallas, Austin, San Antonio, and Fort Worth. Get personalized pricing based on actual local installations, not estimates.
System
Cost
Savings
Texas Electricity Prices
Texas electricity costs are climbing steadily, making energy bills a growing concern for homeowners across the state.
From 2021 to 2024, Texas electricity rates jumped from 12.1 to 14.9 cents per kWh—a 23% increase that directly impacts monthly budgets.
Solar panels offer Texas homeowners a way to generate their own electricity, reducing dependence on the grid and rising utility rates.
Over 25 years, solar systems can provide predictable energy costs while traditional electricity rates continue climbing, offering long-term financial protection.
Price of Energy: Texas vs National Average
Texas Area Utility Providers
Texas utility companies charged between 10.3¢ and 14.7¢ per kWh in 2023, with most rates falling below both state (14.5¢) and national (16.0¢) averages.
Lower rates stem from Texas’ diverse energy mix, including natural gas, wind, and competitive deregulated markets that drive down costs in many regions.
Even with competitive rates, solar can provide price stability as utility costs fluctuate. Fixed solar payments protect against future rate increases while reducing monthly bills.
Texas Utilities Electricity Rates
Texas Solar Incentives
Texas solar installation costs are offset by valuable federal and state solar incentives in Texas designed to make clean energy more affordable.
Federal tax credits reduce upfront costs significantly, while Texas offers property tax exemptions that protect homeowners from increased assessments on solar installations.
Net metering policies allow you to sell excess energy back to utilities, creating ongoing savings opportunities.
$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.
The exemption applies to the full value added by qualifying solar or wind energy equipment installed on your property. To be eligible, the system must be designed primarily to produce energy for on-site use, though it can be connected to the utility grid. You’ll need to apply for this exemption using Form 50-123 with your local county appraisal district, and applications are generally due before May 1st each year.
This exemption is particularly valuable because it protects you from ongoing tax increases due to your clean energy investment, making solar more affordable over the long term. The exemption guidelines are established by the Texas Comptroller’s office to help ensure consistent application across all counties in the state.
Net metering and net billing programs in Texas vary significantly by utility company, allowing homeowners with solar panels to receive credit for excess electricity they send back to the grid. The specific benefits depend on your local utility provider, with some offering traditional 1:1 net metering (where you receive full retail credit for exported power) while others provide net billing with lower export credit rates.
Financial benefits range widely across Texas utilities. Some companies like Grayson Collin Electric Cooperative offer true 1:1 net metering with credits that roll over year to year, while others provide export credits ranging from $0 (Xcel Energy Option 1) to around 12 cents per kWh (some cooperative utilities). Many utilities in deregulated areas work through retail energy providers like Shell Energy, which currently offers 7 cents per kWh for exported electricity. Be aware that some utilities charge additional monthly fees for solar customers, ranging from $4.95 to $30 per month.
Eligibility typically requires installing an approved solar system and completing your utility’s interconnection process. Important considerations include understanding whether excess credits roll over month-to-month or are forfeited annually (many utilities reset credits each December), and whether your area is in the deregulated market where you’ll need to work with a retail energy provider. Since Texas utilities have vastly different policies, it’s essential to check with your specific utility company to understand the exact terms and rates that will apply to your solar installation.
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 storms are manageable with proper system design and quality equipment.
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 can choose between Power Purchase Agreements (PPAs) and lease options depending on their utility provider. PPAs let you pay a set rate per kilowatt-hour for the electricity your panels generate, while leases offer fixed monthly payments regardless of production.
Unlike traditional solar financing, Palmetto’s LightReach program handles everything from installation to maintenance at no upfront cost. You get immediate savings without the responsibility of system ownership, equipment maintenance, or performance monitoring.
This approach offers predictable energy costs and peace of mind with our 90% production guarantee. Compare your financing options to find the best fit for your situation and start saving from day one.
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 (up 23% since 2021), and strong federal incentives, Texas homeowners can save significantly with solar.
The average Texas solar system costs $19,107 after federal tax credits and saves $78,676 over 25 years. With an 8-year payback period, solar provides long-term energy independence and protection from rising utility costs.
Texas doesn’t have statewide net metering, but policies vary significantly by utility company. Some offer traditional 1:1 net metering while others provide net billing with lower export credits.
Credit rates range from $0 to 12 cents per kWh depending on your utility. Many Texas utilities in deregulated areas work through retail energy providers like Shell Energy, which currently offers 7 cents per kWh for exported electricity.
Yes, solar panels increase home value in Texas. Research shows solar installations can boost property values by an average of 4.1% nationwide, translating to thousands of dollars in added equity for Texas homeowners.
Texas offers property tax exemptions on solar installations, so you gain the value increase without paying additional property taxes. This makes solar a smart investment that pays dividends both in monthly savings and long-term home equity.
Solar costs in Texas average $19,107 after federal tax credits for a typical 9.72 kW system. Before incentives, systems cost around $27,296, but the 30% federal tax credit reduces this by $8,189.
Monthly savings average $179, with systems paying for themselves in 8 years. Over 25 years, Texas homeowners save approximately $78,676 in total electricity costs.
Yes, solar is financially worth it in Texas. With an average investment of $19,107 after federal tax credits, homeowners save $179 monthly and break even in 8 years.
Over 25 years, solar provides $78,676 in total savings while protecting against rising electricity rates. Texas’ abundant sunshine and strong federal incentives make solar a smart long-term financial investment.
We’re a national solar company with deep Texas roots, having completed over 3,810 installations across the state since 2020. Our proven track record includes excellent customer reviews and comprehensive service from initial consultation through system activation.
We offer competitive financing options and work with trusted local installation partners throughout Texas. Our focus is providing quality solar solutions with transparent pricing and reliable customer support for Texas homeowners.