What is the Average Cost of Solar Panels in Texas in 2023?

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Texas is a focal point for renewable energy. The Lone Star State’s scorching summers and commitment to sustainable power have made solar energy increasingly important.

Not only does solar power offer the potential to slash electricity costs for homeowners and businesses, but it also champions environmental sustainability.

Just how much do solar panels cost in Texas? This article will provide an up-to-date snapshot of solar panel prices in the state.

Understanding Solar Panels

Texans have many options to harness the Lone Star State’s sunshine for clean energy. Let’s cover the types of solar panels, system sizes, and other components.

• Monocrystalline vs. Polycrystalline. Monocrystalline panels have high efficiency and sleek aesthetics, but have a slightly higher upfront cost. Polycrystalline panels are more budget-friendly and perform admirably in sunny Texas.
• System Size Matters. The size of your solar panel system determines its cost and energy production. A 5 kW system may cover around 20 solar panels and cost between $15,000 to $25,000 before incentives.
• Inverters and Solar Batteries. Inverters convert solar energy into electricity, while solar batteries store excess energy for use during outages or at night. These raise the initial cost but enhance your solar power system.

Understanding these factors is crucial when exploring financing options like solar loans, power purchase agreements (PPA), or cash purchases. Texans can also receive federal solar tax credits, local incentives, and property tax exemptions, reducing the overall system cost.

For more details on solar energy production, check out our article on how much energy a solar panel produces.

Factors Affecting Solar Panel Cost

Let’s dive into financing options, rebates, and tax credits that make clean energy even more cost-effective.

Upfront Installation Costs

Curious about the average cost of installing solar panels in the Lone Star State? In Texas, the price tag for going solar hovers around $2.51 per watt, lower than the national average of $2.85 per watt. A typical 5 kilowatt (kW) solar panel system will set you back approximately $12,550 in Texas.

Now, let’s break down the factors of these costs:

1. System Size. The size, and therefore the cost, of your solar panel system is tailored to your home’s energy needs. The average Texan household consumes around 1,132 kilowatt-hours (kWh) per month. To cover this level of energy usage, you’d want an 8 or 9 kW system, costing between $20,080 and $22,590. Energy-efficient home upgrades can also trim costs.
2. Solar Equipment Quality. High-efficiency panels or monocrystalline panels are pricey but offer better performance. The same goes for inverters and batteries.
3. Solar Incentives. Solar incentives like tax credits, rebates, and local incentives from your utility provider make your system more affordable.
4. Net Metering. Texas utilities offer net metering, allowing you to offset your electric bill with excess energy your panels produce. This reduces the need for expensive solar batteries.

Local Installation Company Options:

• ADT Solar. Homeowners’ preferred choice thanks to reliability and accessible solar options.
• Freedom Solar. Best for off-grid setups and Tesla solar power systems.
• Elevation. Best for seamless whole-home integration. Offers a 25-year labor and system warranty.
• SunPower. Best for extensive industry expertise. Offers a 25-year labor and system warranty.
• Momentum Solar. Best for tailored solar system configurations for homeowners.

Federal and Texas Solar Incentives

Federal Solar Tax Credit (ITC). The Federal Solar Tax Credit, commonly known as the Investment Tax Credit (ITC), reduces the cost of solar panel installation and solar energy systems. Solar PV systems installed between 2022 and 2032 are entitled to a 30% tax credit. If you spend $20,000 on a solar system, a 30% ITC provides a $6,000 tax credit.

Texas Solar Rebate Program. In Texas, there isn’t a statewide solar rebate initiative for homeowners; however, the state provides a property tax exemption for residential and commercial renewable energy systems.

Property Tax Exemption. Solar energy systems in Texas aren’t subject to property tax increases corresponding to the added value of your home. For instance, if a Dallas homeowner possesses a $300,000 property and incorporates a $20,000 solar panel system, the city’s property tax assessment would remain at $300,000.

Local Solar Incentives.

• Oncor Electric Delivery Residential Solar Program. Oncor Electric Delivery extends rebates or solar systems with a battery backup. Your solar panel installation must be carried out by an authorized company and include a grid interconnection.
• CPS Energy Rooftop Solar Rebate. Small businesses, educational institutions, and nonprofit organizations in Texas can receive a rebate of up to $0.60 per watt for their installed solar capacity.
• Sunset Valley Solar Rebate Program. The city of Sunset Valley operates a rebate initiative offering $1 for each watt of solar capacity installed, with a maximum rebate limit of $3,000. Rebates are distributed on a first-come, first-serve basis.
• Austin Energy Solar Photovoltaic (PV) Rebate & Incentives. By completing Austin Energy’s solar education course and installing an eligible solar photovoltaic (PV) system in your residence, you can qualify for a rebate of $2,500.

Financing Options

Solar Loans. Solar loans allow you to own the system and benefit from incentives, often with a lower long-term cost than other options.

Power Purchase Agreements (PPAs). PPAs let homeowners access solar energy without upfront expenses. You pay a predetermined rate, and the system is owned and maintained by a third party.

Solar Leases. Solar leases reduce initial installation costs but come with long-term contracts and limited system ownership. They have minimal upfront expenses but may have higher overall costs.

Cash Purchase. Paying in cash offers full system ownership and immediate savings by avoiding interest payments, typically providing the best long-term cost savings for solar panel systems.

Payback Period and ROI Calculation

Calculate your solar system’s payback period by dividing the installation cost by annual savings. ROI is found by comparing total savings to the upfront cost, expressed as a percentage. Shorter payback periods and higher ROI indicate better financial returns on your solar investment.

Impact on Home Value and Property Taxes

Installing solar panels elevates a home’s market value. It’s an attractive feature due to lower energy bills and environmental benefits. Consult local real estate experts to understand the specific benefits.

Calculating Total Cost and Savings

Let’s explore how to assess the finances of your solar panel investment, from initial costs to long-term savings.

Estimating Energy Savings

Calculate savings by multiplying the system size (in kW) by daily sunlight hours and 30 days. Multiply by the cost per kWh to estimate monthly savings.

Example: 5 kW system x 5 hours x 30 days x $0.12/kWh = $900 monthly savings at $0.12 per kWh.

Reducing Utility Bills

Follow these tips to reduce monthly utility bills:

• Earn credits for excess energy
• Lower reliance on utility companies
• Invest in energy-efficient appliances

Excess Energy and Net Metering

Net metering allows homeowners with solar panels to send the excess energy they generate back to the grid. It offsets your electricity bill and provides credits for the surplus power you contribute to the grid.

Carbon Footprint Reduction

Solar panels cut a household’s carbon footprint. For each kWh generated from solar, the environment is spared from the carbon emissions of traditional power sources.

Texas-Specific Considerations

In Texas, adopting solar power involves city-specific policies, Homeowners’ Associations (HOAs), and solar panel warranties. Consider these factors to make informed decisions on your solar journey.

Solar Energy in Texas

Let’s explore the distinctive aspects of solar power adoption in four major Texan cities: Austin, Dallas, Houston, and San Antonio.

• Austin. Austin is recognized as one of the top cities in the United States for going solar thanks to electricity provider Austin Energy. Austin Mayor Steve Adler has committed to achieving 100% carbon-free energy by 2035 for the city, in part through Austin’s solar roof programs.
• Dallas. In 2019, the Dallas City Council embraced the Green Energy Policy, formalizing its commitment to procuring 100% renewable energy.
• Houston. Houston has joined forces with Solar United Neighbors to introduce an innovative initiative known as Texas Solar Switch Houston, which provides Houston residents with a streamlined avenue for incorporating rooftop solar panels and battery storage into their homes or small businesses.
• San Antonio. In the past two years, San Antonio has doubled its solar capacity, partly thanks to its Renewable Energy Incentive Program for homeowners who install solar panels.

HOAs and Solar Panel Installation

Homeowners’ associations (HOAs) can raise concerns when installing solar panels. It’s crucial to review HOA guidelines and educate them about the benefits of solar energy to address any reservations. Texas law also limits HOAs’ ability to outright ban solar panels, offering homeowners some protection.

Solar Panel Warranty and Long-Term Reliability

Solar panel warranties are vital for long-term reliability, especially in Texas’ climate. Look for panels with robust warrantiesHigh-quality panels can withstand the Texas heat and storms, ensuring your investment in solar energy is long-term. Regular maintenance extends your system’s lifespan and energy production.

Illuminating Your Solar Future in Texas

The average cost of solar panels in Texas for 2023 is between $12,000 to $25,000. Texas energy companies and major Texas cities are supporting homeowners and small businesses through rebate programs and other incentives.

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