Are Solar Panels Worth It in Texas?

7 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. How long you stay in your house

6. How you pay

7. The solar company you hire

1. Solar panel installation costs

Average solar panel costs in Texas are comparable to the national average. A typical residential solar panel installation costs $28,755 in Texas. That doesn’t include a solar battery, which can add $7,000 to $18,000 to your total system costs.

On the high end, Daniel in Richardson told us he spent $68,000 going solar, and Michael in Humble 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 $2.25.

Average solar panel costs 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 12.78 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 8.9 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.

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 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

The 30% federal residential solar tax credit has expired, and Texas doesn’t offer a statewide solar rebate. But homeowners may still qualify for local incentives and a property tax exemption.

• Local rebates: Austin Energy, New Braunfels Utilities, AEP Texas and San Marcos currently offer incentives for qualifying solar installations.

• Property tax exemption: Texas exempts the added home value from qualifying solar systems from property taxes. That means installing solar generally won’t increase your property tax bill.

What to know about net metering in Texas

Net metering lets solar customers earn credits for excess electricity they send to the grid. Texas doesn’t have a statewide net metering policy, so compensation depends on your utility or retail electricity provider.

Some plans credit exports at or near the retail energy rate, while others pay considerably less. Even with a 1-to-1 energy credit, you may still owe delivery charges and other fees.

Rates, fees and rollover rules can also change when your plan renews, so compare the details carefully.

The Electric Reliability Council of Texas (ERCOT) operates the grid serving most of Texas.

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.

Real-world examples

Rizwan in Katy 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!”

Another resident, Anthony in Center 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.”

“I like that I have solar, but it's not entirely financially liberating,” Christopher in Pflugerville 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 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 pays is a grid connection fee, which is $26.

» MORE: Solar incentives in Texas

5. 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 8.9 years. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A 2019 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.

But you miss out on some of that $52,762 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.

6. 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 you don’t have to pay interest on a loan. Of course, paying cash is not always an option. That’s when loans and leases come into play.

• Solar loans work like any other type of home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.

• Leasing solar panels lets you set up a system without the high upfront costs. Monthly payments usually range $150 to $250. Agreements last 20 to 25 years.

» SOLAR PANELS: Lease vs. buy

7. 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.

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.

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.

FAQ

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.

Solar costs vs. savings: Texas and nearby states