Sunshine is abundant in Texas, making the state an excellent place for residents and businesses to save money and generate electricity through solar power. Behind only California, Texas currently has the second-greatest solar generating capacity in the country, according to Statista.
However, the Texas power grid has occasionally left residents to manage rolling blackouts or extended power outages during storms and other high-energy-demand months. Because of this, more and more Texans have been turning to solar for increased energy independence.
According to the most recent data from the US Energy Information Administration, the average electricity bill in Texas is $150.56, placing it among the top 10 states with the highest average residential electricity rate. If you’re looking for options to help reduce those costs, consider solar panels.
Texas solar panel costs
The cost of residential solar panels has decreased over the past two decades, while stronger incentives and rebates are now available at the local, state and federal level. Texas residents installing solar panels can benefit from:
- A 30% federal tax credit on solar arrays
- Local net metering benefits that can reduce your electricity bill
- Plenty of options of solar panel companies and installers to choose from
The exact cost will vary depending on your home’s energy consumption and solar array size. The Lawrence Berkeley National Laboratory’s Tracking the Sun report releases annual data to help give a better idea of the cost of solar for Texas residents. Their data below “focuses on systems installed through year-end 2021 and is based on data from roughly 2.5 million systems.”
Texas solar system stats
| System size (kW) | Price per watt | Total cost | |
|---|---|---|---|
| High | 10.2 | $4.01 | $41,052 |
| Median | 7.4 | $3.80 | $28,888 |
| Low | 5.4 | $3.23 | $17,293 |
Texas vs. the US
| System size (kW) | Price per watt | Total cost | |
|---|---|---|---|
| Texas | 7.4 | $3.80 | $28,888 |
| Nationwide | 7.6 | $3.67 | $26,882 |
Solar financing options for Texas residents
Cash is the interest-free way to pay for solar panels in Texas. However, financing options are available, resulting in a lower upfront cost. Solar loans are available through most banks, credit unions and solar installers. Alternately, solar leases and Power Purchase Agreements let homeowners pay a flat monthly fee. The drawback is you will not qualify for tax incentives with these options, since you do not own your system. The average time to break even on the initial investment for Texas residents who finance is six to 10 years.
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Texas solar panel incentives and rebates
Texans buying solar panels between 2022 and 2032 can qualify for a 30% federal tax credit called the Residential Clean Energy Credit. This solar tax credit, once called the Investment Tax Credit, could save you more than $8,500 on the median solar system price of $28,888. Texas residents can apply for the Clean Energy Credit with IRS form 5695 using these instructions.
Below are other opportunities to save in Texas with local and state solar incentives.
Texas solar incentives
| Program | Description |
|---|---|
| AEP Texas SMART Source Solar PV Program | AEP Texas (Central and North) customers are eligible for solar incentives based on the maximum amount of energy produced ($/watt DC). Incentives apply only to solar systems installed by solar companies currently enrolled in the program. |
| Austin Energy solar rebate | Austin Energy customers can qualify for a $2,500 rebate by completing this solar education course and “installing a qualifying solar photovoltaic (PV) system.” |
| CPS Energy solar rebate | CPS Energy customers can receive up to $2,500 per project for excess solar energy. |
| El Paso Electric Interconnection | El Paso Electric credits qualified solar owners for “the amount of renewable energy generated against the consumption received from EPE.” The system size cannot be more than 10 megawatts. A base electricity bill of $30.25 will apply. |
| Garland Power & Light EnergySaver Program | Customers earn electric bill credits for each kWh of excess energy produced through solar panels that meet GP&L requirements. |
| Green Mountain Energy Renewable Rewards Buyback Program | Customers can earn electricity bill credits when they “install and activate a quality solar energy system at your home with a rated capacity of less than 50 kW.” |
| Guadalupe Valley Electric Cooperative Solar Simplicity | Homeowners can sell excess energy back to GVEC. According to the interconnection agreement, “energy produced by the Installation may be purchased by GVEC at the then-current GVEC renewable energy rate.” |
| Net Metering Programs | Texas offers net metering programs, which let you sell any excess solar energy generated by your system back to a utility company. Check with your electric provider to see if a net metering program is available in your area. |
| Oncor Residential Solar Program | Solar owners who meet the Oncor requirements may qualify for energy bill credits. |
| Residential Clean Energy Credit | Homeowners can claim a 30% federal tax credit for systems installed from 2022 to 2032. Apply through the IRS. |
| TXU Energy Home Solar Buyback | TXU customers “can offset up to 100% of your monthly energy charges” when enrolled in the Solar Buyback program. Renewable energy produced through solar or wind power is applicable. |
Texas solar panel companies
Texas residents have hundreds of options when selecting a solar panel installer. According to the Solar Energy Industry Association, over 500 solar companies operate across Texas, including several large-scale solar farms capable of providing power to tens of thousands of homes.
We can help you cut through the abundant options by narrowing down the Texas solar panels installers to several of the top trusted solar companies based on data from customer reviews and buying trends.
ADT Solar
ADT Solar has been installing solar panels since 2007 under the name Sunpro Solar. ADT acquired the company in 2021. ADT, the security company, has been around for nearly 150 years, so this well-established business now backs ADT Solar.
- Year founded: 2007
- Headquarters: Florida
- Types of panels sold: Monocrystalline panels
- Battery options: Tesla Powerwall and Enphase IQ
- Financing options: Cash purchase, solar loan
- Warranty: 25-year agreement covers labor, production guarantee, solar panel manufacturer and Enphase microinverter
Palmetto Solar
According to Wood MacKenzie, Palmetto is among the 10 largest solar installers in the US. Palmetto handles the entire solar installation process, from design to permitting applications, to long-term customer support.
- Year founded: 2010
- Headquarters: South Carolina
- Types of panels sold: Monocrystalline panels
- Battery options: Sonnen
- Financing options: Cash purchase, solar loan, lease or PPA
- Warranty: 12-year minimum product and 25-year performance warranty
SunPower Solar
SunPower is known for its proprietary solar panels and batteries made by its sister company, Maxeon. Maxeon panels are among the most efficient residential solar panels available. However, the high quality comes with a higher price tag, as SunPower panels are several hundred dollars above the industry average.
- Year founded: 1985
- Headquarters: California
- Types of panels sold: Monocrystalline panels
- Battery options: SunPower SunVault
- Financing options: Cash purchase, solar loan or solar lease
- Warranty: 25-year system warranty; 10-year battery warranty
Sunrun
Sunrun encourages solar leases and PPAs, which means the customer pays less money upfront for installation. Sunrun retains ownership of the system, so the homeowner cannot benefit from solar rebates and incentives, including the 30% Clean Energy Credit. Sunrun is the largest US solar company, boosted by its acquisition of the second-largest solar company, Vivint Solar, in 2020.
- Year founded: 2007
- Headquarters: California
- Types of panels sold: Monocrystalline panels
- Battery options: Tesla Powerwall or LG Chem
- Financing options: Cash purchase, solar loan, solar lease or PPA
- Warranty: 25-year warranty with Sunrun lease agreement; manufacturers’ warranty when purchased
Tesla Solar
Tesla offers solar panels or solar shingles (also known as the Tesla Solar Roof), and the Powerwall battery lineup. Tesla is one of the only solar companies offering a free online quote without scheduling a technician visit.
- Year founded: 2006
- Headquarters: Texas
- Types of panels sold: Monocrystalline panels
- Battery options: Tesla Powerwall and Powerwall Plus
- Financing options: Cash purchase, solar loan
- Warranty: 25-year panel performance and 10-year comprehensive system warranty; 10-year battery warranty
Installation factors to keep in mind
None of us wants to invest thousands of dollars in home improvements unless we’re sure it’s the best decision for our circumstances. Homeowners considering solar panels should consider these questions before continuing their renewable energy journey.
Do you own or rent your home? If you rent, you can inquire with your landlord about installing solar, although renters are often prohibited from making the types of changes to the property that solar panels entail. Renters may be eligible for community solar programs, such as Arcadia, instead. A community solar subscription can provide bill credits from energy produced by solar panels at an off-site location.
What is the shape of your roof? Roofs needing repair may be subject to additional upkeep before solar panels can be applied. The size and slope of your roof can affect the placement of panels and how much electricity a solar system can create. Roofs with a slope between 15 and 40 degrees are most efficient, according to the Department of Energy. A reputable solar installer will determine if your roof requires maintenance before installation.
- Where is your home? Yes, solar panels can generate energy under cold and shady conditions. But solar efficiency is improved when direct sunlight is available for at least part of the day. Living in an area with a lot of tree cover can negatively affect the amount of energy generated by a solar array.
- Are there HOA or neighborhood rules in your community? Texas is among the states with solar rights laws, which means HOAs cannot ban solar panels. However, neighborhood regulations may have rules around the placement or aesthetics of solar installations. Check your local bylaws to see what is allowed.
- Can you add solar panels to your home insurance? Check with your home insurance company to ensure you can add a solar system to your policy and notify them once the installation is completed.
Texas solar power FAQs
Does Texas subsidize solar panels?
No. Texas does not subsidize solar panels. The Federal Clean Energy Credit allows solar owners to claim a 30% tax credit. Plus, many rebates and incentives are available on the state and county levels to Texas residents. Net metering, which offsets your electricity bill by sending excess energy back to the power grid, is another way that solar panels in Texas earn a return on their investment.
What are the pros and cons of solar panels in Texas?
Overall, Texas is a great place to install residential solar panels because the state receives plenty of sunlight year-round. Texas solar rebates and incentives can offset the out-of-pocket cost and net metering benefits from Texas electricity providers can reduce electricity bills for qualified customers. On the other hand, Texas solar panels may not be a good choice if you already have a relatively low electric bill or if trees or buildings extremely shade your home. Additionally, if your roof needs replacement, that extra cost could extend the time it takes to see a return on your solar panel investment.
Does Tesla install solar panels in Texas?
Yes. Tesla installs solar in Texas. In Austin, Texas, Tesla has created a solar community where Tesla solar packages are available for purchase with the sale of new homes.