State & Local Programs

Texas Solar Panel Cost & Incentives

How much do solar panels cost in Texas? Compare solar panel installation costs across 0 state, utility & local incentive programs. Find solar panels for your home, heat pump rebates, EV charger incentives & more.

Last updated: March 1, 2026

Federal update: The 30% solar ITC (Section 25D) and home improvement credits (Section 25C) expired Dec 31, 2025. Programs listed below are state, utility, and local programs sourced from Rewiring America.

Programs Available in Texas

0 Programs

No programs found for Texas yet.

Program data sourced live from the Rewiring America API. Utility rates from OpenEI. City solar costs from EnergySage. No data is hardcoded. Run the calculator for your personalised estimate.

Solar Panels for Home in Texas: Overview

Texas is the second-largest solar market in the US by installed capacity, and residential installations have been growing at over 30% annually since 2022. The state's appeal for solar comes down to three things: abundant sunshine, rising electricity costs on the deregulated ERCOT grid, and a competitive installer market that keeps prices below the national average.

That said, Texas has no state-level solar rebate or tax credit — and it can't, because Texas has no state income tax. The federal 30% Investment Tax Credit (ITC) expired for new installations in December 2025 under the One Big Beautiful Bill Act, which means Texas homeowners installing solar in 2026 are relying on the property tax exemption and utility buyback plans as their primary financial incentives.

The Texas electricity market is deregulated in most of the state (the ERCOT zone), which creates both opportunities and complexity. You choose your Retail Electric Provider (REP), and some REPs offer solar buyback plans where they credit excess generation — but rates vary dramatically. Choosing the right REP is as important as choosing the right installer.

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Texas Solar at a Glance

Avg. Electric Bill

$145–$175/month (varies widely by region and REP)

Solar Market

Top 2–3 nationally for total installed capacity

How Much Do Solar Panels Cost in Texas?

Texas spans enormous geographic and climate variation. West Texas and the Panhandle receive 5.5–6.5 peak sun hours per day — rivaling Arizona. The Dallas-Fort Worth metro averages 5.0–5.3, Houston and the Gulf Coast average 4.8–5.0, and Austin/San Antonio sit around 5.0–5.5. Even the lowest-sun areas of Texas outperform most of the eastern US.

The state added more utility-scale solar capacity than any other state in 2024, and residential rooftop installations are following the same growth curve. Major installer competition in the DFW, Austin, Houston, and San Antonio metros keeps pricing aggressive — typical costs run $2.40–$2.90/watt, below the national average of $3.00+.

Three Transmission and Distribution Service Providers (TDSPs) serve most of the state's residential customers: Oncor (DFW, Waco, parts of West TX), CenterPoint (Houston metro), and AEP Texas (Corpus Christi, parts of South and West TX). These companies own the wires and meters but don't sell you electricity — that's your REP's job. In the regulated (non-ERCOT) territories, Austin Energy and CPS Energy in San Antonio operate as municipal utilities with their own solar programs.

Is Solar Worth It in Texas? Installation Cost & Savings

Solar remains a strong investment for most Texas homeowners in 2026, even without the federal ITC. The fundamentals are sound: excellent sunshine, rising electricity costs, and a property tax exemption that compounds in value every year.

Typical economics (2026, no federal credit): • Average 8 kW system cost: $19,200–$23,200 • Property tax exemption value: $400–$700/year (ongoing) • Annual electricity offset savings: $1,400–$2,200 (depends on rates and system size) • Estimated payback period: 10–15 years • System warranty/lifespan: 25–30 years

Where solar works best in Texas: • Austin Energy or CPS Energy territory (structured buyback programs) • Deregulated areas with a competitive REP solar buyback plan • Homes with high electricity consumption ($180+/month bills) • South-facing roofs in the 5.0+ peak sun hour zones • Homeowners planning to stay long-term (10+ years)

Where returns are weaker: • REP plans with no solar buyback • Low-usage homes (under $100/month electricity) • Heavily shaded properties or north-facing roofs • Short-term homeownership planned

After payback, your system generates free electricity for the remaining 15–20 years of its warranty. Factoring in Texas's history of rising and volatile electricity rates (ERCOT wholesale prices have been unstable since Uri), solar provides valuable long-term cost certainty.

Net Metering in Texas

Texas does not have a statewide net metering mandate. How your excess solar generation is handled depends entirely on your utility territory and provider:

Deregulated ERCOT territory (most of TX): • Your REP determines the buyback rate for excess solar energy • Some REPs offer "solar buyback" plans with per-kWh credits ranging from $0.04–$0.12/kWh — shop carefully on PowerToChoose.org • Other REPs offer no buyback at all — if you're on a non-buyback plan, your excess generation earns nothing • TXU Energy, Green Mountain Energy, Chariot Energy, and Rhythm Energy have historically offered competitive solar buyback plans, but rates change frequently • The buyback rate is almost always lower than your retail rate — size your system accordingly

Austin Energy (municipal): • Offers a Value of Solar (VOS) tariff, currently around $0.097/kWh credited for all generation • This is not traditional net metering — it's a separate credit applied to your bill • VOS rate is set annually by the Austin City Council and has trended downward

CPS Energy (San Antonio): • Offers a solar buyback program with per-kWh credits • Credits vary by time of generation and system size • CPS has one of the more transparent solar programs among Texas utilities

If you're in the deregulated market, lock in a favorable REP plan before connecting your solar system. Switching REPs after installation is possible but may involve contract termination fees.

Solar Tax Exemptions in Texas

Texas offers a 100% property tax exemption for the appraised value increase from a solar energy system, codified in Texas Tax Code §11.27. If your solar panels add $20,000–$30,000 to your home's value, you pay zero additional property tax on that amount. Given Texas's relatively high property tax rates (typically 1.8–2.3% of appraised value, depending on the county), this exemption saves homeowners $400–$700 per year — a meaningful ongoing benefit.

What Texas does NOT offer: • State income tax credit (Texas has no state income tax) • Sales tax exemption specifically for solar equipment (the 6.25% state sales tax applies, plus local taxes typically adding 1–2%) • A state solar rebate program

The sales tax on solar equipment in Texas can add $1,500–$2,500 to a typical residential installation. The property tax exemption is the single most valuable ongoing state-level incentive, and it's permanent — you benefit every year you own the home.

Battery Storage Incentives in Texas

Battery storage interest in Texas surged after Winter Storm Uri in February 2021, when millions of homes lost power for days in below-freezing temperatures. The ERCOT grid's vulnerability to extreme weather events — both winter storms and summer heat waves — has made backup power a genuine priority for many Texas homeowners, not just a financial calculation.

Popular residential battery options in Texas include the Tesla Powerwall 3, Enphase IQ Battery 5P, and Franklin WH5000. Installed costs range from $10,000–$16,000 depending on capacity and installer. Without the federal battery ITC (which expired alongside the solar ITC in December 2025), the full cost is borne by the homeowner.

Battery storage makes the most economic sense in these Texas scenarios: • Homes in areas prone to extended outages (rural areas, areas affected by ice storms or hurricane-related grid damage) • Homeowners on REP plans with time-of-use pricing, where batteries can store cheap off-peak solar and discharge during expensive evening peaks • Self-consumption maximization — if your REP buyback rate is low, a battery lets you use more of your own solar instead of selling it cheaply

Austin Energy and CPS Energy customers may also benefit from storage through demand management programs.

Frequently Asked Questions About Solar in Texas

Does Texas have a state solar tax credit?

No. Texas has no state income tax, so a state solar tax credit is not possible. The primary state-level incentive is the 100% property tax exemption for solar system value under Tax Code §11.27. The federal 30% solar ITC expired in December 2025 for new installations.

Is net metering available in Texas?

Texas has no statewide net metering law. In the deregulated ERCOT market, your Retail Electric Provider determines whether and how excess solar generation is credited. Austin Energy and CPS Energy (municipal utilities) offer their own buyback programs. Compare REP solar buyback plans on PowerToChoose.org before installing.

How much do solar panels cost in Texas in 2026?

Typical residential solar costs in Texas range from $2.40 to $2.90 per watt — below the national average. An 8 kW system costs approximately $19,200–$23,200. Without the federal ITC (which expired December 2025), payback periods are 10–15 years depending on your REP plan and electricity usage.

Are solar panels worth it in Texas without the federal tax credit?

For many homeowners, yes. Texas's excellent sunshine, the property tax exemption (worth $400–$700/year), and rising electricity rates make solar viable even without the ITC. Homes with high usage ($180+/month) and favorable REP buyback plans see the best returns, with payback periods of 10–15 years and essentially free electricity for 15–20 years after that.

What happens to my solar power during a Texas grid outage?

Standard grid-tied solar systems shut down during outages for safety reasons — even if the sun is shining. To keep power during outages, you need a battery storage system (Tesla Powerwall, Enphase, etc.). After Winter Storm Uri, many Texas homeowners have added batteries specifically for backup during grid failures.

Does my HOA allow solar panels in Texas?

Texas Property Code §202.010 protects homeowners' right to install solar panels. HOAs can set reasonable aesthetic guidelines but cannot effectively prohibit solar installations. Get your HOA's solar policy in writing before starting, but Texas law is on your side.

Reviewed by the Net-Zero USA editorial team

Last reviewed: March 1, 2026

Sources: Texas Tax Code §11.27, Texas Property Code §202.010, ERCOT, Oncor interconnection standards, Austin Energy VOS tariff, CPS Energy solar program, PowerToChoose.org, EIA State Electricity Profiles, SEIA Texas Solar Spotlight, Congress.gov (One Big Beautiful Bill Act)