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Solar Panels in Texas: Cost and Savings

Cost of solar panels in Texas

The cost of a residential solar system depends on the size, configuration, and a variety of other factors. These systems can cost between $3 and $5 per watt, with an average total cost of $15,000 and up. Plus, 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.

Solar panel setup

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

  • Solar panels: Perhaps the most important part of your solar setup is the panels themselves. There are several types of solar panels to choose from with the most popular being monocrystalline, polycrystalline, and thin-film. Each type of solar panel comes with its own unique costs and performance.
  • Racking and mounting equipment: To create a solar panel roof, you’ll need a fixed mount system to keep the panels in place on your roof. Another type of mounting system will be required for ground installation.
  • Inverter: The 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. These batteries can store the energy from your solar panels to be used when solar energy is not available.

Solar incentives and rebates in Texas

Solar panels are definitely an investment, but there are financial incentives in place to help ease the cost burden. A few financial options available to Texas residents include:

  • Federal tax credit: The federal government offers a tax credit to incentivize homeowners to install solar panels. The 26% solar panel tax credit is available to homeowners who install solar systems on their primary or secondary homes in 2021.
  • 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 for the energy your solar panels generate.

Solar energy in Texas may help lower your electric bills

In addition to the financial incentives provided by tax credits and rebates, you will also save money on your electric bill. Electricity is calculated in cents per kilowatt-hour (kWh). The average electricity rate in Texas as of January 2021 is 11.39 centers per kWh, just slightly below the national average. But when your home is powered by solar energy, you’re able to avoid the bulk of that cost. In fact, solar power can reduce your electricity bill by 50% or more, depending on where you live.

Let’s look at an example. The average electricity bill in Texas is about $135.31 per month. Assuming that solar panels reduce your cost by 50%, you could save $67.66 per month. Over the course of a year, that adds up to about $812. At that rate, after five years you would have saved over $4,000. If you initially paid $15,000 for your solar system, it would take you about 18.5 years to break even based on your electric bill savings alone.

However, remember that break-even calculation doesn’t account for any tax credits or rebates you’d be eligible for, which would help you to recoup your costs even faster.

Energy independence in Texas can help you

One of the great benefits of solar panels is the potential to achieve energy independence, meaning you aren’t dependent on the electricity grid to power your home. There are several benefits to energy independence. First, when you provide your own power, you don’t have to worry about a high monthly electricity bill. And 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 homeowners 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.

One way to reach energy independence is to install batteries on your solar system to store excess energy. That way, when the sun isn’t shining, you can rely on the power stored in the batteries.

How to buy solar panels in Texas

When buying solar panels it’s important to do your research and shop around. As you shop for your solar system, you may 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. If your roof is old and will need to be replaced soon, it may not make sense to install solar now.
  • The amount of sun your home gets. The more your solar panels are exposed to the sun, the more money you can save on electricity. But, if your home doesn’t get a lot of sunshine, solar panels may not be a wise investment.

The future of energy is solar in Texas

Texas is a leader in solar energy generation, ranking second in the nation behind only California. The state generates more than nine percent of the nation’s solar power. 

Solar installations and production in Texas has increased dramatically in recent years, going from nearly zero solar energy generation in the early 2000s to well over 3,000 megawatts in 2020. Most of the growth has been the result of utilities, but the number of residential solar systems has also increased steadily.

One of the factors that make solar systems so attractive to homeowners is cost savings. Homeowners who can achieve full or partial energy independence can have incredible lifetime savings on electricity.

But it’s not just the cost savings that lead so many to embrace solar power. Traditional electricity generation emits greenhouse gas emissions, contributing to climate change and polluting the air and water. When you use green energy like solar power, you reduce your home’s carbon footprint. It’s likely that we’ll see solar generation in Texas continue to increase significantly moving forward.

Texas Solar energy FAQs

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 are able to retain and save. These savings can amount to thousands over a long period of time.

How does solar power help the environment?

Traditional electricity generation causes greenhouse gas emissions, contributing to climate change and air and water pollution. But when you use solar power, you avoid those emissions and reduce your home’s carbon footprint.

Is it better to buy or lease solar panels?

When you install solar panels on your property, you can choose to either 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.

What percent of Texas energy production is solar?

Based on data from August 2020 from the Electric Reliability Council of Texas, solar power makes up just 1.1% of the state’s total energy generation, yet the state generates more than 9% of the nation’s total solar power.