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Solar installation costs do not include the 30% federal investment tax credit or local incentives. Savings estimates do not account for utility net billing rates.
With some of the strongest sunshine in the country and lower-than-average solar costs, the Lone Star State is a great state for solar.
As the heart of America’s energy industry, Texas plays an outsize role in all electric industry trends. While the state has installed a considerable amount of solar to date, solar only provides a small portion of the state’s total energy. Nevertheless, with strong solar incentives–such as utility solar rebate programs, renewable energy property tax exemptions, and feed in tariffs for solar–going solar in the Lone Star state has never been easier.
From Texas data, it is shown that the average cost of a solar panel installation ranges from $11,560 to $15,640. On a cost per watt ($/W) basis, a solar panel installation in Texas ranges in price from $2.31 to $3.13. See how Texas compares to solar panel costs across the U.S.
How long does it take to earn back your initial investment in solar panels? A solar payback period is the amount of time it takes for property owners who install solar panels to recover their initial investment through electricity savings. In Texas, the average solar payback period is 10.71 years.
Regardless of the exact cost of installation, there are many affordable financing options for solar panel systems. Cash purchases are one common method to pay for solar and often lead to the most long-term value for your money. If an upfront purchase isn’t right for you, solar loans and solar lease/PPAs are available to help finance a solar energy system.
For property owners, you now can customize your solar panels, inverters, racking systems, and batteries, as well as the general aesthetic of the installation. This customizability has made it important for solar consumers to understand these various factors. For example, the best solar panels available may have premium efficiencies and warranties, but will typically be more costly. However, depending on the size of the installation, you’ll need to determine whether high-efficiency solar panels that can produce more electricity are worthwhile. Also, your appetite for risk can help determine which solar warranties best fit your needs. These are just a few of the many factors to consider when selecting solar panel equipment.
Aside from the power output of the solar equipment you choose to install, the amount of energy you generate with solar panels in Texas is directly related to the amount of sunlight that hits your panels. Fortunately, Texas has some of the strongest sunshine and receives high average peak sun hours, making it easier for your solar panels to save as much money as possible.
There are additional factors that determine how much solar electricity you can produce. These include shading and panel angle, which are used to calculate your total production estimate. a prediction of how much energy your solar installation will produce over time. This evaluation offers a clear estimate of how much energy your solar installation will produce. You can see how much solar panels can save you based on factors like geographic location and shading by using the EnergySage Solar Calculator.
Solar incentives in Texas can help you reduce the overall price of going solar. Learn more about why solar panels are such a great investment in Texas.
Learn about solar incentives in TXThe federal investment tax credit, now referred to as the Residential Clean Energy Credit for residential systems, has been one of the most reliable and impactful incentives for solar across the U.S. This solar incentive allows you to deduct 30 percent of the total system cost from your federal taxes. For example, a solar energy system installation that costs $15,000 out of pocket will qualify for a tax deduction of $4,500. For residential systems, this advantageous incentive lasts until the end of 2032 at which point it steps down to 26 percent. The federal ITC drops to 22 percent in 2034 and is eliminated for residential solar installations in 2035. Commercial systems are eligible at least through 2024, but may not be eligible for the full 30 percent depending on certain labor and domestic manufacturing requirements; they also may be eligible for specific ITC adders.
Besides the federal ITC, Texas has additional incentives for going solar that are dependent on your area and utility company. Of note are solar rebate programs through Austin Energy, CPS Energy, Oncor, and other companies. Additionally, Texas has renewable energy systems property tax exemption and net metering availability. To learn more about Texas’ best financial incentives for solar, check out our complete overview of the state’s best solar incentives.
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Learn more about EnergySageSolar energy has an interesting history in the Lone Star state. While the state ranks 5th on SEIA’s 2018 national rankings with nearly 3,000 megawatts (MW) of solar capacity deployed, solar advocates feel the state’s solar industry has much room to grow. In fact, only 0.85 percent of the state’s electricity comes from solar, demonstrating the massive potential for solar in Texas.
The state’s first solar policy came in 1981, when the state issued a Renewable Energy Systems Property Tax Exemption. The policy ensures homeowners they would be exempt from the increased property tax value from their energy installations such as solar panels. Texas quickly followed up with another piece of solar legislation with the adoption of Solar Rights in 1982. Although the policy didn’t focus on financial incentives, it recognizes solar energy usage as a property right and ensures that proper sunlight is made available to those who operate solar-energy systems.
Texas passed no further solar policies until 1999, when the state’s electric-utility restructuring legislation implemented their first renewable portfolio standard (RPS). Across the country, state energy requirements have been instrumental to the development of clean energy, including in Texas. The state’s original goal required utilities to supply 5,880 MW–or 3 percent of their electricity sales–with renewable energy by 2015. The state set a further voluntary goal of 10,000 MW of renewables by 2025. With the state’s abundant natural resources, both goals have already been easily met, mostly through wind power, with no new, more ambitious RPS passed to date.
The most rewarding solar policies for residents in Texas are the multitude of rebates offered by utilities that have been available since the late 2000s and early 2010s. Despite no statewide rebate program an already-met RPS requirement, large and small utilities offer some attractive incentives for going solar. For example, customers of Austin Energy are eligible for a generous $2,500 rebate when they install solar panels. Another example is CPS Energy’s rebate of up to $1.20/W. Lastly, Oncor provides eligible homeowners with a cash rebate of $538.83/kilowatt, or approximately $0.54/W. Overall, these rebates provide solid incentives for Texan solar residents.
On the downside, Texas has no statewide net metering program. Net metering programs have been crucial for the solar energy industry by allowing residents to send surplus net energy to the electric grid and receive compensation for it on their energy bill. In Texas, individual utilities offer feed-in tariffs to customers for every kilowatts-hour (kWh) a solar panel generates, as a way to still provide compensation for solar generation. Austin Energy, for instance, began offering a $0.097 kWh compensation rate for solar generation in 2004. Similarly, Green Mountain Energy – Renewable Rewards Program provides a compensation rate close to the retail value of electricity to its solar customers.
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