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Solar Incentives in Texas (Rebates, Tax Credits & More in 2023)
By Dan Simms /
Your Guide to Solar Panels in Texas: 7 Steps to Convert to Solar
Here’s what we’ll cover in this guide:
- The process for installing solar equipment and maximizing energy production in TX
- How much solar electricity you can expect your panels to produce in TX
- The incentives available in TX and how they help
If you’re considering going solar conversion in Texas, you’re far from alone. The state ranks second in the country for solar adoption, according to the Solar Energy Industries Association (SEIA).1
The cost of converting to solar in Texas is well above the national average at $30,935, but relatively high energy needs and decent Texan solar incentives available make it an outstanding investment for most homeowners.
Over the lifespan of your solar panels, the average energy savings in Texas you can expect from your system amounts to $21,350. Keep in mind, that’s after the panels pay for themselves – which typically about 13 years in the state.
Overall, following the seven steps to solar adoption below is well worth it in Texas for most homeowners and can end up saving you thousands of dollars on your utility bills.
Step 1: What to consider when Buying Solar Panels
Step 2: Getting a Quote from a Solar Provider
Step 3: Signing a Solar Contract
Step 4: What to Expect on Solar Panel Installation Day
Step 5: Final Inspection for Installed Solar Panels
Step 6: Permission to Operate (PTO)
Step 7: Set Back and Enjoy Your Solar Energy
SunPower
Best National Provider
Pros
- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
Cons
- Expensive
- Customer service varies by local dealer
Blue Raven Solar
Best Solar Financing
Pros
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
Cons
- Doesn't offer solar batteries (coming 2022)
Freedom Solar Power
Solar Veteran
Regional Service
Average cost
Pros
- Outstanding customer service
- Representatives are experts on local policies
- Great warranty coverage
- Offers products from leading manufacturers
Cons
- Expensive
- Limited service offerings
- No leases or PPAs
Step 1: What to Consider When Buying Solar Panels in Texas
While going solar can have a host of benefits for homeowners in Texas, it’s best to do your research before diving in. Make sure you understand the potential value panels will bring, what size system you need and the solar incentives and rebate programs available to bring your residential solar panel installation costs down.
We’ll discuss each of these points below to help guide you through the process.
Research If Solar Panels Are a Good Fit For You in Texas
Solar is massively beneficial for the majority of property owners in the Lone Star State, but you should always confirm that they’re right for your specific home and financial situation.
You can start by looking at how valuable panels are in general in your area and deciding if the return on investment is worth it, in your opinion.
If you’re paying for your solar panels with cash, your initial costs will likely total around $30,935. However, your costs after taking advantage of incentive programs will likely be a lot less. For example, if you can file for the federal solar investment tax credit (ITC), you could drop that cost down to $21,655, provided you owe enough in taxes to take the full amount.
This is just the average, though, and your price will be determined largely by how many panels you need to meet your specific home’s energy demands. Texans use more energy than residents of most other states, which means you’ll probably need a larger and more costly system to meet those demands.2 However, that also means you have more potential to save money over time on your utility bills.
Many parts of the state, like Austin, see over 300 sunny days per year, which is ideal for solar production and well above the national average.3 However, if you live in an area that sees more cloudy days, you may need to consider solar production in low-sun conditions. You may need higher-efficiency panels to meet or exceed your home’s energy needs in cloudy conditions. These types of panels are often more expensive, but they can provide more value to you over your system’s lifespan.
Another crucial thing to consider that can determine savings and panel value is the net metering program available to you. Net energy metering (NEM) is an energy buyback policy that essentially lets you sell power to your utility company when you produce more energy than your home needs. You receive credits that can offset your bills whenever you need to draw power from the grid.
This buyback program is not mandated by the state’s Public Utilities Commission, so it’s not available to all homeowners. However, some utility companies and municipalities do offer the program. These include:
- The City of Brenham
- El Paso Electric Company
- Austin Energy
- Green Mountain Energy
- San Antonio City Public Service (CPS Energy)
- American Electric Power (AEP)
- TXU Energy
Unfortunately, the largest provider in the state – Oncor – does not currently offer NEM. You can always contact your provider to see if net energy metering or an equivalent is available to you. Just be sure to ask about the credit rate per kilowatt-hour (kWh), the basic unit of measurement for energy production. Earning credits at the retail rate is ideal and most beneficial, followed by the avoided-cost rate and then the wholesale rate.
The table below includes some information on how the average solar power system in Texas compares to the average system in the U.S. as a whole. This can help you determine how valuable solar conversion might be for you and whether or not it’s a good financial decision.
| Texas State Average | United States National Average | |
| Solar System Size Required | 11.5 kW | 9 kW |
| Typical Cost Per Watt to Install Photovoltaic (PV) Equipment | $2.69 | $2.66 |
| Average Total System Cost Before Federal Solar Tax Credit | $30,935 | $23,940 |
| Average Federal Credit Value | $9,281 | $7,182 |
| Average Total System Cost After Federal Credit | $21,655 | $16,758 |
| Average Panel Payback Period | 13 years | 12 years |
| Average Lifetime Savings of Converting to Solar | $21,350 | $22,379 |
Research How to Finance Solar Panels
Going solar can be costly. Since the initial price is likely going to be well above what many residents are able to pay, most homeowners will need to find financing. This next step in the process should be a quick and relatively straightforward one, although you will need to consider the different options you have available to you.
You can start by using our solar calculator to figure out what a system designed specifically for your home and energy needs will cost.
Once you have an estimate for the price you’ll pay for your panels, you can consider the all-in savings and the panel payback period to determine if the investment is worthwhile for you. We recommend weighing the pros and cons of solar conversion, including lower energy bills and an increased home value as well as the initial investment.
Once you confirm that solar is a good option overall, you should look into the different payment options for PV equipment. These include:
- Cash payments
- Solar loans
- Solar leases
- Power purchase agreements (PPAs)
Paying cash is typically the best deal, yielding the greatest long-term savings and creating helping you break even the quickest. However, it also means you’re digging deeper into your pocket the most. Loans have lower upfront costs, but you’ll end up paying more for your solar panel system over time because of the interest that accrues. Both of these options let you take the federal credit.
With solar leases, somebody else actually owns your solar panels but your home has access to the power they generate. You simply pay a set monthly fee. PPAs are similar, but you pay by the kWh of energy you use. Neither of these give you access to the tax credit, but they usually come with no down payment requirements and lead to the fastest realized savings. However, long-term savings are significantly lower.
Step 2: Getting a Quote from a Solar Provider
Once you’re certain that solar is right for you and you know how you want to pay for your panels, you can find a solar installation company to handle the installation process for you. There are around 160 installers that operate within the state of Texas, so you should have no shortage of providers from which to choose.4
Picking a Solar Installer
When you’re choosing a solar company, make sure to consider several factors:
- Their overall reputation
- Their years of experience
- Their certifications and qualifications
- The products they carry
- The price they typically charge per watt
- The warranty coverage included with your installation
- Financing options they offer
Some of the best national solar providers that operate in Texas include SunPower, ADT Solar and Blue Raven Solar. Smaller regional installers can be great options, too, including Momentum Solar and NRG Solar. You can check out our complete guide to choosing a reliable solar provider in your area for more information on these installers.
What to Expect After Requesting a Quote
Most installation companies will let you begin the quote process online, and a representative will reach out to discuss your needs and set up an in-person consultation. During the phone call, you will likely need to provide some personal information, like your name and address, as well as your most recent energy bill.
We strongly recommend avoiding companies that don’t require an in-person visit. Satellite images can be great to get a quick estimate, but they don’t tell the full story. You’ll want your solar installer to take measurements on-site to get a truly accurate estimate.
Once the virtual and in-person assessments are completed, your installer should move your solar project over to the design phase. The company will determine the size, brand and number of panels that will fit your home best and meet your energy demands – and your budget. This information is provided to you through a formal proposal.
The proposal will include information about your future solar PV system and how much it’s expected to produce. Look for details on:
- The total size of your system in watts or kilowatts
- The number of panels needed
- Where your panels will be installed (front, back or side roofs, for example) and how they will be arranged
- How the wiring will be run and connected to your electric meter
- Placement of batteries or inverters, if you need them (some panels include microinverters that won’t require a separate inverter mounted to your home)
- The total price for your installation — and be sure to ask your provider if this price is pre- or post-federal credit. Reputable installers should include both numbers for the sake of clarity
- How much energy your panels are expected to produce per month or annually, on average
- The total expected savings you’ll see from your solar system, based on the utility bill you provided
- How quickly you will break even on your panels
Your proposal should also include information about how you can finance your system, which your installer will have discussed during the initial consultation.
We recommend getting a few quotes for your system, even if you’re satisfied with the first one. Getting two to three quotes lets you compare pricing and equipment as they relate to warranty options and power output.
Not only can you choose the best equipment for your purposes, but you might be able to get a company to price-match another quote you have on hand if they want your business.
Consider Purchasing Solar Accessories
The last part of your quoting process should be to consider add-on products, like solar batteries, electric vehicle (EV) chargers, solar carports and other items, depending on what the installation company offers.
Remember: You only get to take the federal credit once, so including all the equipment you think you might want in the future when you first go solar is the smartest and most affordable way to have your system installed. In particular, you may want to carefully consider batteries if you don’t have NEM available, as many residents don’t. This can help you save thousands over time.
Step 3: Signing a Solar Contract in Texas
After you’ve fine-tuned your quote to meet your needs and your budget exactly, you can move forward with signing your solar contract.
Be sure to read the entire document thoroughly, and consider hiring an attorney to review it for you if you feel at all uncomfortable about the language in it. Every contract is different, so signing one that will yield a system and installation that meets your expectations will, of course, lead to the best experience overall.
How Do Solar Warranties Work in Texas?
One of the most important things to read carefully in your contract is the section on solar warranty coverage. Most solar companies statewide will offer three types of warranties, all of which are important:
- Product or equipment warranties. Sometimes called a manufacturer’s warranty, this covers defects in the equipment that leads to system malfunction or damage. The standard option is a 25-year warranty
- Performance or production warranties. These guarantee that your panels will lose no more than a predetermined percentage of their efficiency over a given time period. A typical performance warranty guarantees a minimum efficiency of 80% after 20 years.
- Workmanship warranties. These guarantee that the installation process will be done properly, avoiding any issues with your system or damage to your home. Some of the best workmanship warranties cover roof leaks, too, although these aren’t usually necessary in more arid areas like Texas.
When Can I Expect Solar Service to Go Live?
The time period between signing your solar contract and system commissioning — when you see production and energy savings from your panels — can vary. Based on current permitting timelines and waitlists for installation services in Texas, you’re likely looking at between two to three months. This includes time for the design, permitting and installation.
Timelines can also vary based on the municipality. If you live in a larger city where more building permits are filed — like Austin, Dallas, Fort Worth, Houston or San Antonio — you may wait three to five months between contract signing and commissioning.
Solar Panel Permits in Texas
All solar installations completed in the state of Texas must have proper permits filed with the local building department. These help ensure that your home can safely support the weight of the panels and that the installation and connection to the electric grid are completed properly.
Your installer will generally file for the permits for you, so you don’t need to worry about this step of the process. However, it’s worth being knowledgeable about the process. Your local government’s website should have information about solar permitting on its inspection department page. The review process can take a few weeks, though, depending on how backed up the building department is, which can delay your installation quite a bit. You will generally need to pay a permitting fee, which can vary significantly based on where you live. The fee is generally between $100 to $250, though it can be as high as $550 for residential installs and will depend on your city 5. For example the city of Tyler changes $150. This should be included in your initial solar quote.
Solar & Utility Interconnection
Most solar power systems in your area are tied to your area’s electricity grid, which allows energy to flow back and forth between your solar array and the power grid. Utility systems use a device called a bidirectional meter to monitor how much energy flows in each direction. This is how your credits are calculated for net metering, if that’s available to you.
The PUC requires an application for interconnection, which most installers will fill out and submit for you. The process to connect to the grid can also delay the commissioning of your system a bit, but it’s usually well worth the wait.
Grid-tied systems can generate electricity for your home and reduce your electric bills, but they are also equipped to pull energy from the grid when your panels underproduce, like at night or on cloudy days. The result will be overall lower utility bills and no interruption to service when your panels fail to meet your energy demands.
Step 4: What to Expect on Solar Panel Installation Day in Texas
When your installation date arrives, you can expect your local crew to arrive early and begin the installation on the outside of your home. They’ll be drilling through your roof to attach the panels, so it can get a bit noisy inside your home. At least one of the installers will likely need access to your home to run wiring or make connections inside.
One of the most common questions residents in your area ask about the process is, “Do I need to be home for solar panel installation?” Yes, absolutely. Be prepared to have someone home all day. Your installer may need access to the interior of your home, and having someone available to let them in is a good way to avoid delays.
Depending on the size and complexity of your system, the installation can take anywhere from around four to 12 hours to install. In some cases, the installation can take more than one working day. If this is the case, your installer should let you know how long they expect it to take so you can make arrangements to be home.
Step 5: Final Inspection for Installed Solar Panels in Texas
All building department permits require an inspection from a city inspector before they are completed. Your installer will contact the building department to let them know once the installation is completed, and a representative from the department will contact you to schedule the inspection. Chances are, your installer will handle the entire inspection process.
You will likely need to be home to allow a building inspector inside if you have batteries or other equipment installed on the interior. Your installer should let you know if that’s the case. Panel-only installations can usually be inspected from the exterior of the home.
Batteries have some particular rules about where they can be located. National fire safety codes require batteries to be installed in:
- Attached garages
- Detached garages
- In utility closets
- Mounted to exterior walls at least three feet from doors or windows
- Ground-mounted outside at least three feet from doors or windows
Your solar installer should understand and abide by local regulations, but you can contact your building department for requirements prior to installation if you want to be prepared.
Solar monitoring in Texas is done remotely by your installer or by you as the homeowner. Most modern panels can be monitored via a smartphone app, which shows you live-time production, output and energy pulled from the grid.
Step 6: Permission to Operate (PTO) in Texas
The final step before commissioning your system — that is, turning it on — is getting PTO clearance from your local utility company. This clearance confirms that your inspection was completed, no major issues were discovered and it’s safe to activate your system.
Unfortunately, given the massive uptick in solar installations in the state, some customers have experienced delays with this process. If inspectors cannot give you the green light, you could be stuck with an inoperable system that just needs a final PTO.
*Please note: You MUST have Permission to Operate (PTO) from your utility company before turning your system on.
Most reputable installers will not take final payment for the system until it’s commissioned, but some providers will. In that case, you could be stuck paying for a system that has yet to provide you with any value.
We recommend asking your installer before the process begins when they will take payment for the system. Feel free to ask your provider when your system will be commissioned. They will activate the system for you, and they’ll usually show you where the emergency shut-off is and how to operate it. It typically gets installed on an exterior wall near your power box.
Finally, your installer should discuss if and how you can monitor your solar production and energy usage. They can help you install the related app or navigate to the monitoring website used by the panel manufacturer. They’ll sync your system with your account and explain how to use the software.
Whether you’re serviced by Oncor Electric Delivery, AEP Texas, CenterPoint Energy or Texas-New Mexico Power, you should also be given an emergency contact number for your utility company. You can use this number for issues with your system that don’t demand contacting local fire authorities.
Step 7: Sit Back and Enjoy Your Solar Energy in Texas
Once your system is up and running, you can relax knowing that the hard work is done. Best of all, that hard work should start paying off immediately. Your panels will begin generating power and offsetting your electric bills.
Some homeowners will be able to eliminate their electric bills altogether. This would equate to an average savings of over $130 per month in Texas, according to the U.S. Energy Information Administration.6 Not only will you be saving money on your utility bills, but you’ll see several other benefits as well:
- Your fossil fuel consumption will be lower in favor of renewable energy.
- Your carbon footprint will be significantly reduced.
- If you have batteries installed, you’ll insulate yourself against blackouts through energy independence. Blackouts are more common in Texas than in nearly every other state.7
- The value of your home will have increased by an average of 4.1%, thanks to the lower cost of clean energy.8
How Much Energy Can I Get From Solar Panels in Texas?
Solar panel energy generation depends on many different factors, so it’s difficult to provide an accurate estimate for production on your home without doing a site inspection. These factors include:
- The intensity of the sun on your roof: The more intense the sunlight is on your panels means a greater level of energy production. Homes in North America with south-facing roofs can direct the rooftop solar panels toward the path of the sun in the sky. This provides more intense sunlight, which leads to more electricity generation.
- The abundance of sun on your roof: Similarly,the placement and direction of your panels matter. If anything obstructs the sunlight hitting your panels at any time of the day, you’ll lose out on some energy generation. Trees, nearby buildings and even nearby electrical poles and lines can cast shadows on your panels. Shading will always reduce energy efficiency a bit.
- The efficiency of the panels you install: The equipment you install will also play a role in how much energy your system produces. Solar panel brands all come with different levels of efficiency and will generate different amounts of electricity based on that. This is such an important factor that homeowners who install high-efficiency panels — like Maxeon panels from SunPower — sometimes need fewer panels installed to cover electricity consumption.
- The size of your system: The number of panels you have installed will directly affect how many kilowatt-hours (kWh) your system produces each day. Installing more panels always means more electricity, although larger systems aren’t always cost-effective.
- The weather: Finally, the weather plays an important role in energy production because your efficiency will plummet on rainy or cloudy days. You can lose up to 90% of your energy generation during cloudy weather.
Although there are a bunch of factors that affect your energy generation, it is possible to estimate your production based on average sun intensity and the number of sunny days in the area. The chart below provides a rough estimate based on the size of your system.
| SOLAR POWER SYSTEM SIZE | EXPECTED DAILY ENERGY GENERATION | EXPECTED MONTHLY ENERGY GENERATION | EXPECTED ANNUAL ENERGY GENERATION |
| 9 kW | 30 kWh | 900 kWh | 10,800 kWh |
| 10 kW | 33.3 kWh | 1,000 kWh | 12,000 kWh |
| 11 kW | 36.6 kWh | 1,100 kWh | 13,200 kWh |
| 12 kW | 40 kWh | 1,200 kWh | 14,400 kWh |
| 13 kW | 43.3 kWh | 1,300 kWh | 15,600 kWh |
| 14 kW | 46.6 kWh | 1,400 kWh | 16,800 kWh |
| 15 kW | 50 kWh | 1,500 kWh | 18,000 kWh |
For a more personalized calculation, you can use our solar estimates tool to see how much energy your panels will generate on a daily and annual basis.
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FAQs About Solar Panels in Texas
Below, we’ll answer some of the most pressing questions we get from Texas residents about the process of going solar.
Thankfully, no. The state enacted solar rights legislation in 2011 that prevents homeowners associations and other governing bodies from prohibiting solar installation.9 All homeowners have the right to go solar, and no permission for installation is required from HOAs or similar entities.
HOAs can, however, restrict when installations occur, which can help avoid disrupting neighbors during certain hours of the day.
Yes, definitely. Texas is one of the best places to go solar in the country, thanks to a particularly sunny climate. This is partially why the state ranks second in the U.S. for solar adoption, with over 16,000 megawatts (MW) installed already and future projections that should double that number in the next five years.10
The state sees abundant sunlight, providing maximum energy generation and savings. Second, residents see above-average electric bills, which means a higher potential for savings. Third, the state has decent incentives — including a property tax exemption and local energy efficiency rebates — to help make solar more affordable and valuable.
All in all, Texans typically see energy savings that pay for their solar power systems in about 13 years. After that, they’re expected to save an average of over $22,000 on utility bills over the lifespan of the system. This could be even higher if energy prices continue to climb.
Texas solar panels coupled with solar storage solutions are especially valuable because they let you avoid the common power outages. With batteries, you can go off-grid and maintain power even during blackouts, which is not possible with panel-only installations.
Solar energy systems should last for around 20 years or more in the Lone Star State. A lifespan of between 20 and 30 years is typical in the U.S., but the intense weather like thunderstorms, hurricanes and tornadoes that frequent the state can put excess stress on rooftop solar systems and limit their longevity. Still, a solar power system that lasts 20 years in the area is expected to provide massive energy savings and should be well worth the investment.
Comparing authorized solar partners
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- Most efficient panels on the market
- National coverage
- Cradle to Cradle sustainability certification
- Great warranty coverage
- Expensive
- Customer service varies by local dealer
A+Best National Provider1985SunPower Panels25-year all-inclusive warranty
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