Are solar panels worth it in Texas?

8 considerations in the Lone Star State

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a home in texas with solar panels on the roof

ConsumerAffairs has heard from hundreds of Texas solar customers who have already gone through the installation process. It’s generally worth it if you like the idea of lowering your monthly utility bills, helping the environment and gaining more energy independence.


Key insights

Depending on the size of your system and what financial incentives you qualify for, a typical residential solar panel installation costs $8,331 to $23,803 in Texas.

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On average, it takes solar panels approximately 7.5 years to pay for themselves in Texas.

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Over 25 years, Texas homeowners with solar panels avoid $61,774 in total utility costs on average.

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8 factors to consider before getting solar panels in Texas

The main drawback is the high upfront cost of purchasing and installing the panels and equipment. For many Texans, the long-term savings outweigh the upfront costs over time. But it doesn’t work out for everyone. Here’s what to consider before making the switch.

  1. Solar panel installation costs
  2. Your energy consumption
  3. If you want a battery
  4. Texas solar incentives
  5. Net metering rates
  6. How long you stay in your house
  7. How you pay
  8. The solar company you hire

1. Solar panel installation costs: $10,000 to $30,000

Average solar panel costs in Texas are comparable to the national average. Before the federal solar investment tax credit (ITC), a typical residential system ranges from $11,901 to $23,803. That price drops to $8,331 to $16,662 after the full 30% tax credit.

On the high end, Daniel in Richardson, Texas, told us he spent $68,000 going solar, and Michael in Humble, Texas, paid $75,000.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Texas, the average cost per watt is only $2.64.

Average solar panel installation cost by system size in Texas

2. Your current energy consumption

Look at your most recent utility bills to see how much electricity your house needs each month. This tells you what size and capacity your solar system needs to be. A typical Texas household needs a system with a capacity of 10.32 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

Once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself. In Texas, solar panels usually pay for themselves within 7.5 years.

3. If you want a solar storage battery

A solar battery backup gives you an extra layer of insurance against grid vulnerabilities. It has many advantages, particularly in Texas, thanks to the state’s unique energy infrastructure.

“I've been very satisfied going solar,” Ted in San Antonio, Texas, told us. “But if you don't go with the battery pack, it's a waste.” The downside is that solar batteries cost almost as much as the panels.

Solar batteries typically cost $7,000 to $18,000.

Edward Hirs, an energy economics expert at the University of Houston, emphasized the benefits of solar batteries, particularly in areas like Houston with regular or semiregular power outages. With solar panels and an energy storage battery, you can keep your lights on. You don’t have to worry about your food spoiling or staying in a hotel until the power comes back.

Keith in Baird, Texas, also recommends getting a battery: “Today, a truck ran through the power line and it knocked all the electricity out. Ours just barely clicked,” he said. “The battery gives five hours, which is more than plenty. The techs fixed the power line before we ran out of electricity.”

4. Texas solar incentives: tax credit and loan programs

The federal solar investment tax credit (ITC) is a major incentive that reduces the upfront cost of going solar in Texas. The ITC provides a 30% tax credit on your total system costs, including equipment, labor and permits. For example, if you spend $10,000 installing a solar panel system, the ITC is worth $3,000. If you owe $15,000 in taxes, the credit reduces your debt to $12,000.

Don’t get confused: The ITC is a credit, meaning it directly decreases the amount of taxes you owe. This is different from a deduction, which reduces your taxable income. It isn’t a rebate or a refund. It only offsets your tax liability; you can't take advantage of the ITC if you don’t owe taxes in the first place. However, the credit rolls over to the next tax year if you don’t use the full amount.

Residents may be able to combine the ITC with additional solar incentives in Texas, including: 

  • Rebates: Garland Power & Light, CPS Energy, Austin Energy, SMTX and other local rebates are available.
  • Property tax exemption: The State of Texas exempts 100% of the appraised value of all solar panel systems from property taxes.

» EXPLORE: Solar incentives by state

5. Net metering in Texas: no guaranteed buyback rates

Net metering is a system of give-and-take between you and your utility company. It lets you access power from the grid when your panels don’t generate enough electricity.

You can also earn credits for sending any excess solar energy to the grid. These credits can offset the cost of electricity consumed at other times.

Many Texas utilities offer some form of solar buyback program, but the specifics vary by company. Some utilities offer full retail rates, while others have a reduced or wholesale rate. For example, Rizwan in Katy, Texas, said their solar buyback program “is a joke. They sell me energy at an exorbitant high rate like 17c/kW and buy the power that I generate from my solar panels for like 2c/kW!”

Homeowners with solar panels typically save $20,000 to $90,000 over 25 years.

Another resident, Anthony in Center, Texas, told us they live in “one of those areas where they do some buyback, but they won't take our bill down to zero. We still have a connection fee that we have to pay every month — no matter what.”

The Electric Reliability Council of Texas (ERCOT) operates the state’s electrical grid. ERCOT’s primary role is to keep the grid reliable as more distributed energy resources are integrated. It doesn't directly affect net metering policies for solar panel owners, but it does play a part in the larger context of integrating renewable resources like solar into Texas's electric grid.

6. How long you plan to stay in your house

Solar panel installations are expensive, and it takes years for electric bill savings to make up for the initial cost. In Texas, they typically pay for themselves within 7.5 years. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

Solar panels last 25 to 30 years.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years, according to Zillow. But you miss out on some of that $61,774 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Instead, consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen.

7. How you pay

If you can, it’s often financially strategic to pay for the whole thing upfront. You own the system from day one and receive the benefits of available tax credits; plus, you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans, leases and other agreements come into play.

  • Solar loan: Solar loans work like any other type of loan. They have relatively low fixed interest rates. Once you pay it off, you own your system outright.
  • Leasing options: Leasing panels is one way to get the benefits of solar energy without the high upfront cost. A solar lease works like a car lease — you get to use the panels but don’t own them. Leasing can be good if you have limited savings. Solar lease agreements typically last 20 to 25 years.
  • Home equity loans or lines of credit (HELOC): Eligible homeowners can borrow against equity in their house to finance a solar panel system. These often have variable interest rates, meaning monthly payments can increase over time.

8. The solar company you hire

People have had mixed experiences with solar companies. In the best-case scenario, it’s easy, and you’re happy with the system’s performance. In the worst-case scenario, you end up paying thousands for mid-tier solar equipment from a company with poor customer service and no follow-up or support.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision. Use the National Renewable Energy Laboratory’s PVWatts Calculator to estimate how much electricity a solar panel can produce over a year on your house — just type in your address. Project Sunroof is a free solar savings estimator powered by Google Earth imagery. 

Monthly costs: solar payments vs. savings

Think of going solar in terms of your monthly costs. Given rising energy costs in Texas and elsewhere, financing solar panels makes sense as long as your monthly loan payment is less than what you would be paying the utility company anyway.

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support a solar panel installation. Here’s what to think about before you commit:

  • How old are my appliances? The first step is to ensure that your electrical loads are as small as possible. If you have an older refrigerator or air conditioning unit, for instance, it’s smart to upgrade those before investing in solar panels. That way, you can get a smaller system, which will be cheaper overall.
  • How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Texas averages three to five peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.
  • What is the size and angle of my roof? Texas (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.
  • What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels.

Pros and cons of solar panels in Texas

It’s a common misconception that solar panels will completely eliminate your monthly power bill — but this is not always the case. On the bright side, you’ll likely be paying much less than you would for traditional utility bills.

“I like that I have solar, but it's not entirely financially liberating,” Christopher in Pflugerville, Texas, told us. “The energy I produce covers the cost of the electricity itself on my bills, but there is also a delivery fee that I wasn't entirely aware of how that was billed, which I still pay.”

Another resident, Virginia in Houston, Texas, said her bills were $400 or $500, but she hasn’t paid more than $50 per month since going solar. The only thing Lisa in Venus, Texas, pays is a grid connection fee, which is $26.

» EXPLORE: Where your solar savings go the furthest

Pros

  • Long-term savings
  • Better for the environment
  • Low maintenance costs
  • May increase home resale value
  • Tax breaks and rebates

Cons

  • Upfront costs
  • Seasonal production variations
  • Potential roof leaks

Benefits of solar panels in Texas

  • Better for the environment: Traditional energy sources like coal and natural gas release carbon dioxide and other harmful pollutants into the air. Solar panels generate electricity from sunlight, a clean and renewable energy source. Installing solar panels on your roof helps the environment primarily by reducing greenhouse gas emissions and dependence on fossil fuels.
  • Higher home resale value: Installing solar panels can significantly increase a home's value. According to the study mentioned above, houses with solar panels sell for 4.1% more on average. The exact increase in value varies by location, with homes in active solar markets sometimes seeing even higher boosts.
  • Cheaper energy bills: The average homeowner in Texas uses a lot of power, which adds up to a lot of savings when you switch to solar. Going solar now means that your monthly energy expenses will be more predictable (and very often significantly lower). Even if your solar power system doesn’t generate 100% of your power, you can still save money by not being fully dependent on traditional utilities. Solar panels also protect you from future energy cost increases.

Drawbacks of solar panels in Texas

  • Solar equipment is expensive: Even with rebates and other financial incentives, the price typically starts between $10,000 and $30,000. It’s even more expensive if you want a solar battery for energy storage. Solar battery costs are generally between $7,000 and $18,000. Getting a solar battery might be strategic if net billing rates continue to decline in Texas. That way, you can store energy at home instead of tapping into the local grid when you need to.
  • Potential roof leaks: The installation process involves drilling holes into the roof to anchor the panel mounting systems. If not done correctly, this can lead to leaks or structural damage.
  • Energy production varies: Solar panels are dependent on weather conditions and seasonality. Solar panels still work on cloudy days, but less available sunlight does affect how efficiently they produce energy. Snow cover may also temporarily reduce efficiency until it's removed or melts off.

» MORE: Solar energy pros and cons

Find solar companies in Texas

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for the top solar companies in Texas to learn more.

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FAQ

Does Texas really pay for solar panels?

No, the state of Texas does not pay for solar panels. We’re not aware of a totally free solar option in Texas. Unfortunately, scams that promise free solar panels can end up costing people quite a bit of money. However, you can lease solar equipment to reduce your upfront costs.

Do solar panels increase property taxes in Texas?

No, solar panels should not increase property taxes in Texas. There is a property tax exemption in Texas that allows homeowners to exempt 100% of the increase in their property taxes based on the appraised value of their solar system.

Can I get a power purchase agreement in Texas?

Power purchase agreements (PPAs) are legal in Texas but are currently only used by utilities and commercial-scale projects. There isn’t a widely used resident-level PPA option in Texas.

What solar scams are common in Texas?

In recent years, the Texas Attorney General has received a significant rise in complaints against solar companies, from 80 in 2020 to 378 complaints by November 2023.

With solar scams on the rise in Texas, be cautious of offers that seem too good to be true. Common lies include the government paying for your entire system (it's a tax credit with eligibility rules), eliminating your electric bill entirely (utility fees still apply) and having power during outages (additional batteries are needed).

To protect yourself, consult with your tax professional to verify tax credit eligibility, assess your roof's condition to avoid unexpected repairs and choose a reputable company that handles sales, installation and service for streamlined accountability.

How long does it take to install solar panels in Texas?

Installation times depend on a range of factors, especially seasonality and supply chain issues. The actual installation might take only a day, but it takes time to design and plan, you also have to activate the system.

Remember, approval delays from utility companies are common in Texas, so factor that into your solar project timeline. Homeowners in Texas also complain of months-long delays in getting their solar panels connected to the grid by CenterPoint Energy. The backlog could be caused by a combination of surging demand for solar installations and the utility potentially struggling to manage the influx of new solar projects.

Bottom line: Is going solar in Texas worth it for you?

Going solar in Texas might be easier than you think. The main obstacle to going solar is the high upfront cost of purchasing and installing solar panels, inverters and other equipment. For a lot of homeowners, it ends up being worth it as long as their cost savings over time outweigh the initial investment. Others are happy to go solar for the environmental benefits alone. Overall, Texas is one of the better states for going solar.

Solar costs vs. savings: Texas and nearby states

*For 100% usage offset; **Over 25 years

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. DSIRE, "Texas Programs." Accessed March 29, 2024.
  2. EnergySage, “The cost of solar panels in Texas.” Accessed March 29, 2024.
  3. Solar Energy Industries Association, "Texas Solar." Accessed March 29, 2024.
  4. SolarReviews, “How much do solar panels cost in Texas?” Accessed March 29, 2024.
  5. Office of Energy Efficiency & Renewable Energy, "Homeowner's Guide to the Federal Tax Credit for Solar Photovoltaics." Accessed May 6, 2024.
  6. Public Utility Commission of Texas, “Net Metering.” Accessed May 8, 2024.
  7. Public Utility Commission of Texas, “Rules and Laws.” Accessed May 8, 2024.
  8. Go Solar Texas, “Solar Rights & Regulations.” Accessed Aug. 22, 2023
  9. MSN, “Texans file growing number of complaints against solar companies.” Accessed May 28, 2024.
  10. Click2Houston.com, “KPRC 2 Investigates: Solar panel sales exploding in Houston; Here’s what you need to know to keep from being taken advantage of.” Accessed May 28, 2024.
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