Is Solar Worth It in Texas?

We explore whether solar panels are worth the investment in Texas. Among other aspects, we take into consideration the average cost of the panels, the average payback period, and the average savings.

Adam Graham
Published May 24, 2022
·
6 min read

Average cost, average payback and average savings of installing solar panels in Texas

With the price of energy skyrocketing across the nation as a whole and in the state of Texas, one option homeowners can consider is switching to solar energy. Some of the main benefits of going solar include the cut in long-term costs, a lower environmental footprint and a greater energy independence. But with a large upfront cost, many homeowners question whether solar is worth it, and more specifically, if it is worth it in Texas.

Texan households are one of the nation's largest electricity consumers. The vast majority of the state’s electricity goes to the residential sector, with three in five Texas households using electricity as their main energy source for home heating. In summer, the state's electricity demand peaks because of the increase in the use of air conditioning. As the state has an abundance of sunlight - which has pushed it to the top of the list for solar states -  homeowners within the Lone Star state have the potential to save a substantial amount of money if they determine that solar panels are an effective solution for their particular needs.

However, there are many aspects to consider. In this article, we will explore if solar is worth investing in for homeowners in Texas and the potential costs/savings.

Average Cost to Install Solar Panels Before Tax Incentives (Texas) $14,280 - $18,840
Average Payback Period (Texas) 12.6 Years
Average 25 Year Savings (Texas) $24,188 - $29,563

Cost vs Savings on Solar Panels in Texas

Installation Costs

Texas is a large state with various climates and varying rates of sunshine. The size of the system and the installation costs will depend on what area of the state you live within, among other factors.

The cost to install solar panels in Texas ranges from $14,280 to $18,840 with the average homeowner spending approximately $16,650 for a 6kW system that relies on monocrystalline roof mounted panels, before applying any incentive and rebate. The costs vary due to the types of panels used, installation location, and whether or not the system has a battery backup.

Find the best solar installers near you

Savings

Whereas the upfront costs may be steep for many, the long term savings could be worth it in the long run. In Texas the average 25-year savings are around $24,188 to $29,563. The average payback period is 12.6 years. The payback period is determined by how long it takes a homeowner to recover the initial cost of installing the solar panels through savings. This period can vary depending on the size of your unit and initial costs as well as your location. With the price of solar panels continuously falling in the last decade by 80%, the panels remaining subsidized by the federal tax credit, and the net metering law, solar continues to prove an excellent investment in the sunny state of Texas.

What Incentives Are There in Texas?

In addition to the savings on monthly bills, there are tax incentives to help entice Texans to switch to solar.

Federal incentives

Texas homeowners can claim a tax credit of 26% off the cost of a solar system using the federal Investment Tax Credit (ITC). The solar tax incentive covers the cost of both labor and equipment.

Once installed, your installation might also qualify you for an exemption on property tax. No matter where you live in Texas, you can take advantage of the incentive and save with the 26% ITC or Residential Renewable Tax Credit. People should note that in 2023, this tax credit will lower to 22%.

Other incentives can vary depending on where you live in Texas:

Austin

The city of Austin provides its residents with the residential solar rebate program. Under the program, residents must complete a solar education course and then follow through with the installation of a quality solar photovoltaic (PV) system. Homeowners will receive a $2,500 rebate.

Houston

In Houston, you can also receive rebates via net metering credits from Green Mountain Power, Reliant, ITC, and Amigo Energy.

Dallas

Dallas is a huge city but much of the land surrounding the city is still untouched farmland. Owners of farmland can enjoy an incentive of up to $1,000 for any upgrades if they belong to the Farmers Electronic Cooperative. The rebate is given during the year of installation as long as all requirements have been satisfactorily met. Oncor offers incentives with local service providers which will also help offset the cost of solar panel installation.

San Antonio 

Residents of San Antonio who are CPS energy customers can use their utility’s solar rebate program. Residential projects are typically granted up to $2,500 for each project and have a $500 premium for solar installations as long as homeowners use locally produced solar modules.

Depending on where you live in Texas, you’ll want to check to see if your city offers any residential incentives that might help lower the cost of solar panels.

Is It Sunny Enough in Texas?

Texas is a big state with varying degrees of sunlight. This is a key aspect for those considering whether solar is worth it in Texas. In Austin, Houston and San Antonio, the sun reaches the ground 59% to 60% of the year. El Paso, on the other hand, experiences the most sun each year with the sun reaching the ground 84% of the time. Clearly, the ample sunlight makes Texas an ideal choice for solar.
 

Other Considerations

Less Dependent on the Power Grid

Texas suffers severe storms which often lead to power outages that can last days (or even weeks if a hurricane affects the state). Each year the state experiences approximately 740.32 hours in 31 events of power failure. Moreover, the state suffers from an aging power grid that has proven to be not ready for extreme weather conditions in the past. If installed as a hybrid or off-grid system (with backup batteries) solar power can provide a homeowner with power in the event of an outage.

Maintenance and Running Costs

Maintaining solar panels is relatively simple. You can have them inspected and cleaned twice a year. During the inspection, a technician will look for any signs of damage or wear. If any problems are found, then they can be promptly addressed. Usually, the cost of cleaning solar panels costs approximately $150 per visit and any repairs and maintenance can run around $450. Solar panels require no more maintenance in Texas than in other locations.

Compare quotes from local solar installers

Is Solar Worth It in Texas?

Yes, in general solar is worth it in Texas. It can help you reduce your carbon footprint and your dependence on the power grid and save you money every month.. With federal and state incentives, the overall savings outweigh the initial cost burden for many. All of these considerations make Texas a good candidate for going solar. If you are considering having solar installed in Texas, consider all the options carefully and contact a reputable local solar professional.

Author:
Adam Graham is an industry analyst at Fixr.com. He analyzes and writes about the real estate and home construction industries, covering a range of associated topics. He has been featured in publications such as Better Homes and Gardens and The Boston Globe, and written for various outlets including the National Association of Realtors, and Insurance News Net Magazine.