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Does Solar Power Make Sense in Texas?

texas residential solar

Solar jobs in America have sky-rocketed over the past decade with a more than 165% increase! This is solid proof of people’s growing interest in solar technology. And why not? Sun power is worth praising for its positive impacts on the environment as well as the budget.

In Texas, there are more than 230 days of sunshine, which is above average in America. The proverb – make hay while the sun shines – fits here so well. For you, the “hay” is solar power. The “hay” can bring you great savings but at hefty upfront costs of installation.

You deserve to know whether the solar culture is worth it in Texas. Are there any drawbacks? What are the installation costs and returns on investment? – So, just keep reading!

Is Texas Ideal for Solar Energy?

Texas is an ‘ideal-ish’ type of place for solar investment. It has the highest estimated solar potential in America. 

Sunlight is what solar panels crave. A 5-kW home solar system installed in Texas will generate much more kilowatt-hours as compared to the same system working in Ohio. Therefore, smaller systems are sufficient to power homes in Texas.

The handy net-metering facility is not available for Texans, state-wide. Net-metering allows to roll over extra units of solar electricity to the grid. This offsets the utility bill and makes savings. However, a battery-backed hybrid system can be deployed. Extra solar kilowatt-hours can be stored in the battery bank for later utilization.

Federal solar tax credit or Investment Tax Credit (ITC) offers a straight 26% cut on your installation costs. Some local utilities such as Austin Energy, Oncor, CPS, etc. offer local solar rebates in Texas.

Solar Power System Components

A solar system is not just an assembly of solar panels. There are other big-budget components involved also.

Solar Panels

Made of crystalline silicon cells, the solar panels trap the sunlight and use it to generate electric current.

The cost of the solar panels (only) is around $0.6 – $1.2 per watt in the US. 

The efficiency of the solar panels varies from 15% – 20%. PERC type solar panels are the most efficient, followed by monocrystalline, polycrystalline, and thin-film solar panels.

Naturally, efficiency and upfront costs are correlated. However, the more efficient (costly) panels may bring higher savings in the long run. The supremacy of durable solar panels is that they can last up to 40 years!


Your house cannot run on the direct current (DC) produced by the solar panels. A device called Inverter is needed to convert the DC into the AC (alternating current) that appliances are designed to use in order to operate. Inverters account for 6-10% of installation costs or about $0.20 per watt.

String inverters are most commonly deployed. However, shading over the solar panels significantly downgrades their output. They also make it troublesome to upgrade solar energy systems. 

Another type of inverters has been introduced, called Microinverters. They work on the one-to-one policy – a microinverter for each panel. Their output does not significantly suffer from shading over the solar panels. 

String inverters last 10-15 years, whereas the microinverters come with a solid 25 years warranty

Mounting racks

Mounting racks are used for – well, mounting the solar panels, of course. National Renewable Energy Laboratory (NREL) estimates that mounting racks cost about $0.10 per watt. That is roughly 3-4% of installation costs

Solar Batteries

Net-metering is not widely available in the Lone Star state. Some utilities provide the facility though. Therefore, as a solar customer, you may have to go for a Hybrid or an Off-grid solar system. Both of these methods incorporate solar batteries to store solar energy.

Two types of backup batteries are in use today. The good old, low-cost, Lead-acid batteries, – and the new-generation, compact, Lithium-ion batteries.

For an average house, the batteries may cost from $4,000 – $6,000 (lead acid) or $8,500 – $ 10,500 (Li-ion) prior to 26% federal tax credit.

Though they add a great deal to the cost, they may probably be worth it. Batteries provide uninterrupted power during outages. And, with an off-grid solar system, the utility bill can be totally eliminated!

Determine Your Home Electrical Consumption

To find out the required size of the solar energy system, you need to determine your home electrical consumption as well as daily solar peak hours. 

Your utility bill would give an accurate idea about your energy consumption.

Let’s do some maths. A resident of Texas consumes an average of 1,200 kWh per month or 40 kWh per day. There is an average of 5.0 solar peak hours per day in Texas. Therefore, a system size of 40/5 = 8 kW would be required.

Life Span of a Solar power system

Individual components have their specific lifespan. The life period of a solar system can be attributed to that of solar panels. During that lifespan, some components such as batteries and the inverter may undergo 2-3 replacements.

ComponentManufacturer’s warrantyExpected lifespan
Solar panels12-25 years20-35 years
Batteries3-10 years5-15 years
Inverters10-20 years12-25 years
Mounting20-25 yearsVery high

Texas Average Residential Solar Cost

A large system surely costs higher since the purchase of a greater amount of the components is involved. However, the per-watt cost may be less. It is because, with a greater component rating, the price tag is more economical. Secondly, manufacturers also offer bulk pricing discounts.

Standard size (W/ 350 Watt solar panels)Cost per watt (average)Solar system costsSolar system costs (after tax credit)
2.8 kW$3.10$8,680$6,423
4.2 kW$2.95$12,390$9,170
5.6 kW$2.81$15,736$11,645
7.0 kW$2.74$19,180$14,193
8.4 kW$2.70$22,680$16,783

Solar Federal Tax Credit

Good news – the government is recognizing your efforts as a solar customer. As you upgrade your energy game, you get a whopping 26% off in tax credit! You have to be the owner of the solar power system to claim this goody though.

Payback Period in Texas

It is a time by which your system has saved enough for you, which equals the original cost of installation.

The sun shines generously over the state of Texas. The result? – your system generates more electricity; thus, you enjoy greater returns on investment!

Since a solar system in Texas makes more savings, the payback period in Texas is good, averaging 12 years. So, after 12 years, you start taking the profits!

Average Buy-Back Rates in Texas

Some power companies and retail electricity providers offer the facility of net-metering in Texas. The surplus electricity from solar panels is sent to the grid. In essence, the utility ‘buys back’ the kilowatt-hours at a certain rate.

UtilityBuy-Back Rate per kWhRetail Rate per kWh
Austin Energy9.7 cent~10.40 cent (average)
CPS EnergySame as Retail rate11.30 cents
El Paso Electric CompanySame as Retail rate11.11 cents

Calculate your Payback Period

Whenever you use solar electricity, you’re basically saving kilowatt-hours on your electric bill. If you use 100 kilowatt-hours of energy coming from your rooftop, you are actually avoiding 100 units on your electric bill. These are your “savings”. The more your system produces, the more you save on utility bills. These are the financial benefits of solar energy for you!

Do you want to find your solar return period? We’re here to help!

Multiply your system size by 1700 and then by the electricity buy-back rate. This gives you an estimate of your yearly savings. Divide your system’s cost by the yearly savings. Voila – you have the answer!

Solar Panel Efficiency in Texas

Don’t worry about this. The intrinsic efficiency of solar panels is dependent on the manufacturer and the technology – not the state you’re living in. Some factors, however, do affect the net output of solar panels.

Solar Panel Orientation

The solar panels need to be facing the sun to generate the most electric power. Therefore, orientation matters a lot. In Texas, reorient the solar panels to face the south. If the solar panels are facing south-west or south-east, you may lose 5-10% of maximum generation.

Solar Panel Tilt Angle

With solar panels facing south, the ideal tilt angle is 30o – 45o. It works well in most cases.

Solar Tracking

You can make your system follow the sun! That’s solar tracking for you. It makes sure to extract the most juice out of sunlight every day – and, sadly, out of your wallet too.

The solar tracking equipment may cost you 30% of your system’s cost. In most cases, it is not worth the investment.

Benefits of Solar Energy

Solar energy holds a treasure of benefits. For those who can afford it, it is definitely rewarding.

Lower cost of electricity

With the solar panels on your side, you control the energy game. It makes you less dependent on the grid and brings huge savings on monthly bills.

Higher home resale value

Homebuyers now prefer properties with a pre-installed solar panel system. A study from a real estate company revealed as much as a 10% increase in home resale value by installing solar panels.

Lower taxes

The government is offering a 26% waive-off in tax credits for solar panels installation before 2023.

Note that after 2022, the discount will be lowered to 22% and in 2024, will plunge to 0%.

Minimal maintenance costs

One of the many reasons to love the technology is that it requires minimal maintenance. Just a regular checkup is needed to ensure that the solar panels are dust-free and there are no accidentally broken wires.

Reduced environmental impact

Profits and the environment usually don’t go well together. However, with solar, you can paint a picture where the carbon footprint is reduced while also making appreciable savings.

Drawbacks of Solar Energy

How do we phrase it? – “with great benefits come certain drawbacks. Solar energy suffers from some setbacks as well, mentioned next.

Upfront cost

Perhaps the dark side of all this “solar euphoria” is its price tag. The technology is enticing for most but only a few can afford it.

However, there are other purchasing options available such as solar loan, solar lease, or a PPA.

Payback time

Solar energy does payback but not soon enough. As a Texan, you have to wait for an average of 12 years to taste the fruits of your investment.

The states of New Jersey and Massachusetts, however, present only a period of 5.5-6 years for payback.

Not ideal for every home

Solar panels take up a lot of space. Not every home can provide the space to install them. There may be unavoidable shades and obstacles present that just don’t work with the solar system idea.

Net Metering in Texas

Texas has no state-wide net-metering policy. However, you can still go solar with the help of a battery bank. There are some utilities including Austin Energy, CPS Energy, El Paso Electric Company, etc. that provide the facility. They give solar tariffs on the generation of renewable energy.


Let’s have a look at what people are asking and find their answers in this FAQ section.

How much does it cost for installing solar panels in Texas?

The average cost of solar panel installation in Texas is estimated to be $2.75 per watt. However, depending upon your exact location, local permits, condition of your house roof, rebate programs around you, – the cost may vary significantly.

Do you need a permit for solar panels in Texas?

To install solar panels you will have to go through the construction as well as wiring work which raises a safety concern. Therefore, two approvals are usually needed: one from the building authority and the other from the company that is providing electric services.

Do you really save money with a solar system?

Yes, but – in the long run. After the solar payback period is over (average 12 years in Texas), the electricity production of your system literally saves you hundreds to a couple of thousand dollars every year!

Can I install my own solar panels in Texas?

Yes, you can. There are DIY kits available that enable you to do just that. However, it is better for your house and your own health that you let the professionals do it. Experts are available who handle the installation of residential solar systems.

Is Solar Worth It in Texas?

So, is solar worth it in Texas then? A big yes!

Solar is almost worth it anywhere. It gives you energy independence, saves you around a thousand dollars per year, and helps you reduce your carbon footprint. Moreover, you get to use renewable energy. Your savings increase with your energy consumption and so does your home value!

Texas is naturally itself a solar power hub. It has the highest solar potential in the whole of the US. The payback period of 12 years is also great. Compare that to at least 25 years of the system’s life.

That’s not all. The smooth 26% federal tax credits cut off a big chunk of the required upfront cost. 

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