Solar Panels in Texas: Cost and Savings

Texas is an industry leader when it comes to solar power generation. The state began investing in solar energy in the late 1970s and has become the second-largest generator of solar power in the nation today. 

With the rise in popularity of residential solar systems, many homeowners are left asking: Is solar worth it? To answer that question, we’ll explain some of the benefits of installing solar panels, including cost savings, energy independence, and environmental protection. But we’ll also share what to look out for before making such a big investment so that you know all the ins and outs of going solar.

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Solar panels cost roughly $31,500 on average according to Berkeley Lab’s Tracking the Sun report, but with the Residential Clean Energy Credit, you could recoup 30% of the cost of your solar panels on your taxes. The average cost after the solar tax credit is about $22,000. 

Cost factors for a residential solar system include the size, configuration, type of solar panels, and regional installation price differences, to name a few. These systems can cost an average of $3.67 per watt, according to Berkeley Lab data. Depending on the company you work with, you may have the option of financing or leasing your solar panels, which will also affect your overall price tag.

Buying your solar panels upfront is the most cost-effective way to purchase a solar system, but it’s not always an option for everyday homeowners. Your next best option may be a solar loan. The least economical option overall is a solar lease or power purchase agreement (PPA).

When it comes to getting your solar system set up, there are several types of equipment you’ll need for your solar panels to work, including:

• Solar panels: The most important part of your solar setup is the panels themselves. The most common types of solar panels are monocrystalline, polycrystalline, and thin-film panels. Each type of solar panel comes with its own unique costs and performance.
• Racking and mounting equipment: You’ll need a fixed mount system to keep the panels in place on your roof. Ground installations require other mounting equipment. 
• Inverter: The solar inverter takes the energy from the solar panels and converts it to the correct type of electricity to power your home outlets.
• Battery: Installing batteries with your solar system provides essential backup power. Solar batteries can store the energy from your solar panels for when solar energy is unavailable or you experience a power outage.

Choose Energy can help you get connected to a reputable solar panel company near you. To get started with your free quote, call our solar experts or fill out the form on this page and start exploring solar energy options.

Solar panels can be a significant investment, but financial incentives help ease the cost burden. A few solar incentives available to Texas residents include:

• Federal tax credit: The federal government offers a 30% solar panel tax credit to homeowners who install solar systems on their primary or secondary homes from the beginning of 2022 through 2032. The credit will decrease to 26% in 2033 and to 22% in 2034 before expiring in 2025.
• Austin Energy: Austin homeowners may be eligible for a $2,500 rebate when they install solar panels on their property.
• CPS Energy: Customers of CPS Energy may be eligible for financial incentives for each watt of solar energy generated by their panels.
• Guadalupe Valley Electric Cooperative: GVEC customers may be eligible for certain financial incentives.
• City of Sunset Valley: Residents of Sunset Valley may be eligible for a rebate thanks to net metering, which allows you to receive bill credits for generating extra solar power and sending that energy to the grid. 

In addition to the savings provided by tax credits and rebates, you will also save money on your electric bill when you switch to solar. Electricity is calculated in cents per kilowatt-hour (kWh). The average electricity rate in Texas as of February 2023 is 14.63 cents per kWh. When your home is powered by solar energy, you can avoid the bulk of that cost. Solar power can reduce your electricity bill by 50% or more, depending on your location.

Let’s look at an example. The average electricity bill in Texas is about $160 per month. Over the course of a year, that adds up to about $1,920. At that rate, after twenty years, you would have saved over $16,350. 

If you initially paid the national average of about $31,500 for your solar system, it would take about 11.4 years for your system to pay for itself based on your electric bill savings alone. Since solar panels last anywhere from 25 to 30 years, you could save between $26,000 and $35,500 throughout your solar panel’s lifespan. These calculations include the 30% tax credit; you could end up saving more after applying any state or local incentives you are eligible for.

One of the great benefits of solar panels is the potential to achieve more energy independence. Having a solar system will allow you to be far less reliant on the electricity grid to power your home. When you provide your own power, you also won’t have to worry about a high monthly electricity bill. 

Looking at recent events, we’ve seen just how important energy independence can be. In early 2021, Texas suffered a winter storm that left millions of residents without power — in some cases for many days. Customers with energy independence during the storm maintained their electricity without paying the exorbitant bills many people faced.

Installing batteries on your solar system can help you reach energy independence by storing excess energy. When the sun isn’t shining, you can rely on the power stored in the batteries. Other alternatives for energy independence include installing a solar generator system or owning a portable power station for emergencies.

When buying solar panels, it’s important to thoroughly research and shop around for the best solar panels for your home or business. As you shop for your solar system, you will also want to consider:

• Whether you have an HOA. Depending on your neighborhood, an HOA might have rules around a solar system on your property or require approval before installation.
• The angle of your roof. The U.S. Department of Energy says that solar panels work best on south-facing roofs with a slope of 15 to 40 degrees.
• The condition and age of your roof. It may not make sense to install solar panels on old roofs in poor condition. Any roof maintenance or replacement will need to be included in your total costs.
• The amount of sun your home gets. The more sun exposure your roof gets, the more money you can save on electricity. If your home doesn’t get much sunshine, solar panels may not be a wise investment.

Texas is a leader in renewable energy, ranking second in the nation for solar energy, behind only California. According to the U.S. Energy Information Administration (EIA), Texas is on track to have the most utility-scale solar capacity in 2023 — nearly double that of California. With the rapid rate of solar generation, Texas is well on its way to becoming a solar energy powerhouse. The state currently generates more than 9% of the nation’s solar power. 

Solar installations and solar production in Texas have increased dramatically in recent years, going from nearly zero solar energy generation in the early 2000s to approximately 15,000 megawatts of solar as of 2023. Utilities make up most of the growth, but residential solar systems have also increased steadily.

One factor that makes solar systems so attractive to homeowners is cost savings. Homeowners who can acquire full or partial solar energy systems can have incredible lifetime savings on electricity and a significant increase of energy independence.

But it’s not just the cost savings that lead many to embrace solar power. Traditional electricity generation emits greenhouse gas emissions, contributing to climate change and polluting the air and water. Using green energy like solar power reduces your home’s carbon footprint and helps reduce your impact on the environment. 

Do solar panels save you money in Texas?

Solar panels can save you hundreds of dollars per year on electricity, depending on how much energy you can retain and save. These savings can amount to thousands over a long period of time. How much you’ll save depends on the size of your system, how much sunlight your panels receive, and whether you acquire your panels with cash, a loan, or a lease.

How does solar power help the environment?

Solar power can help your impact on the environment. Traditional electricity generation causes greenhouse gas emissions, which contribute to climate change and pollution. But when you use solar power, you largely avoid those emissions and reduce your home’s carbon footprint, helping to preserve our environment.

Is it better to buy or lease solar panels?

When you install solar panels on your property, you can choose to buy, finance, or lease your system. While leasing might come with fewer upfront costs, it will make you ineligible for the federal tax credits that make solar installation so attractive. You can buy the panels at the end of a lease at market value, but otherwise, you won’t ever own your panels or receive free electricity once you’ve paid the system off. Typically, buying solar panels is the best option.

What percent of Texas energy production is solar?

According to the Solar Energy Industries Association (SEIA), solar power makes up 4.81% of the state’s total electricity generation. However, the state generates 16% of the nation’s total power according to the EIA. As the demand for solar power increases, these statistics may change.