Are Solar Panels Worth It In Texas?

Choosing solar is always a good idea when you are aiming for environmental friendliness, but is it a good idea when you are aiming for budget-friendliness? That is what we are here to find out.

If you call Texas home, chances are you have noticed a lot of new solar panels going up in your area. Texas has seen a drastic increase in solar use over the last few years, so much so that it is now the number two state in the country for solar power use. With just over two-thirds of the year bringing sunny weather, it’s really no surprise that Texans would want to take advantage of this abundant, clean energy source.

Even if all your neighbors are switching to solar, purchasing a full solar system can still be an intimidating prospect. Well, not to worry, we’ve crunched the numbers to help give you a better perspective of what this investment would entail as well as when you can expect to start seeing the financial benefits.

The Cost of Solar In Texas

The best place to start this investigation is to determine the cost of a full solar installation. As you’re surely aware, Texas is a big place and prices can vary drastically from city to city. With that in mind, we have had to base the information in this article on the state average. If you’re interested in an estimate for your specific area, try our solar cost calculator.

The average cost for solar in Texas is approximately $2.70 per watt. This means that a 5kW system should cost between $11,000 and $16,000. This is slightly above the national average, but the number of peak sunlight hours per day in Texas is also above average which can help to make up for the increased cost.

The system size that you need will depend on the amount of electricity you use and how much of that usage you would like to switch to solar. If you use approximately 39kWh per day (the average in Texas), you would need a 10kW to go completely solar. Keep in mind that many solar systems can be expanded, meaning that you can start small and build up. Just remember to discuss this with your installer from the very beginning to avoid any problems down the road.

Here is a handy chart showing the average cost of solar systems in a variety of sizes.

For more information on the cost of solar panels and what can effect that cost, check out this article.

Remember, these prices are based on the state average, so they will vary by company and location. Even if you find a system that is slightly below the average cost, you’re still looking at a fairly hefty investment. Thankfully, most states offer tax breaks and other incentives for solar users and Texas is no exception.

Solar Incentives In Texas

Although there aren’t any state-wide solar incentives, you can expect some pleasant rebates depending on your electricity provider. In addition, Texas is a net metering state. Net metering allows you to earn credit on any extra electricity that your solar system generates. That credit can then be used to pay for any extra electricity you may need on those less sunny days.

Here are some of the incentives offered by Texas’ biggest electricity providers:

Austin Energy offers a $2500 rebate for solar users, plus you could be eligible to receive $0.097/kWh through net-metering.

CPS Energy also offers a $2500 rebate for completing their solar energy course and installing an approved solar system.

Guadalupe Valley Electric Coop offers $1.00/W on approved solar systems with a maximum of a $4,000 rebate.

Other providers offer rebates as well, but they often have strict requirements and guidelines so be sure to check with your electricity provider before making any big purchase decisions.

Federal Tax Credit
Who doesn’t love a good tax credit? It’s even better when you get that credit for going Green. With the Investment Tax Credit, you can deduct 26% of your installation cost off of your federal taxes. That percentage is going to drop to 22% in 2023 and disappear in 2024, so don’t hesitate too long if you want to take advantage of this tax credit.

The Cost Of Electricity In Texas

According to the Energy Information Administration, the average cost of electricity in Texas as of August 2021 was 12.03 cents per kilowatt hour (kWh). This is slightly lower than the national average which can make it seem like you may not need solar, but let’s dig a little deeper.

The average Texas home uses approximately 39.2kWh per day, that’s more than 10kWh more than the national average. This could be caused by increased air conditioning and other climate control equipment among other things. This high electricity usage results in monthly electricity bills ranging from $126 to $142 per month.

When Will Your Solar System Start Paying Off?

A little bit of math shows us that Texans spend about $1,500 to $1,700 on electricity every year. Although this is just an estimate, we can use these numbers to help us get a general idea of when your solar investment will start to truly pay off, at least in terms of financial gain.

Throughout most of the United States, the average peak sunlight hours rest at about 4 hours per day. Lucky for Texas residents, the Lone Star State enjoys 19% more peak hours per day which means more solar energy each day. The following chart is based on premium power generation, so final numbers will vary, but it will give you a general idea of what to expect.

Looking at these numbers may make you hesitate, 8 to 10 years seems like a long time at the onset, but now is the time to look at the big picture.

In general, solar panels are designed to work at peak efficiency for 25 to 30 years. Most manufacturers will guarantee their solar systems for up to 30 years. After the 30 years are over, the system will start to lose efficiency, but not immediately and typically at a very slow rate.

How Much Money Will You Save In The Long Run?

Considering all the numbers we have already discussed, you might be a bit overwhelmed, but here are the most exciting numbers. Based on the averages, you could save somewhere between $30,000 and $35,000 over the 20 years after the system has paid for itself.

These numbers are based solely on the average monthly electricity bills in Texas. This does not include any extra you may gain from net metering or the power your system will generate after the initial 30 years. If your system is well-maintained, it could continue to generate high levels of power for many years to come, which means more savings for you and your family.

Is Solar Worth It In Texas?

If you have made it this far into this article, you already know the answer to this question. Solar is definitely worth it in Texas! With more sunny days and longer peak sunshine hours throughout those days, Texas is basically the prime location for a solar installation. Add in Texas’ solar incentives and you have a recipe for a solid investment that you won’t regret.

Interested in trying solar, but not ready to invest in a full solar system? Check out our Green Living page for loads of useful information about products you can use to start integrating solar power into your everyday life. If you are interested in a full system, don’t forget to check out our solar cost calculator for a slightly more personalized estimate.