Are Solar Panels Worth It In Texas: Pros and Cons

The US is taking significant steps toward going solar. It’s estimated that about 4 million photovoltaic units will be installed in 2023, and Texas will join the forerunners in the number of installed PV units. Are solar panels worth it in Texas, you might ask??

Texas is theoretically an ideal place for solar panels as a state with a sunny and warm climate and some of the best solar tax incentives. However, there are some things to consider before you decide to go solar in Texas, so we’ll discuss the pros and cons of solar panels in Texas.

Key Points

  • How the Climate in Texas Affects Solar Energy Harnessing Possibilities
  • Are Solar Panels Worth It in Texas: The Benefits
    • Renewable Energy
    • Save Money on Electricity
    • Protect Home From Outages
    • Cost-Effective
  • Disadvantages of Solar Panels in Texas
  • The Best Solar Panel Orientation in the Texas Area

How the Climate in Texas Affects Solar Energy Harnessing Possibilities

The climate of Texas is diverse due to the state’s large size. The state has subtropical weather in the southeast, becoming tropical along the coast. Central Texas has a temperate climate, while the mountain areas in the west have an alpine climate. The Panhandle region has a semi-arid climate. So how does this affect solar energy production in Texas?

How Much Sunlight Hours Does Texas Receive?

Data show that Dallas receives around 2,850 hours of sunshine per year. However, the amount of sunlight that Texas receives can vary from year to year, especially when hurricanes hit.

Are Solar Panels Worth It in Texas: The Benefits

To start on a good note, we’ll first present the benefits of solar panels in Texas. Let’s dig in. 

Renewable Energy

Unlike fossil fuels, which are finite and release harmful emissions, solar energy is virtually limitless and clean. Solar panels work by capturing sunlight and converting it into electricity, which can be used to power homes, different facilities, and even cars. You can even use solar energy to create steam or heat water.

Save Money on Electricity

While the initial cost of solar panels in Texas (and elsewhere, of course) may be higher than traditional energy sources, the long-term savings and environmental benefits make solar a wise investment in the long term. You will produce and use your own electricity, spending less on electrical bills.

If your electrical bill is still high even though your home is equipped with a solar energy system, the system can be faulty, or there may be another problem.

Protect Home From Outages

Solar panels will still generate electricity when the power goes out because they’re not connected to the typical power grid. As simple as that.

Cost-Effective

The electricity rates in Texas are among the highest in the US, and solar panels in Texas can significantly reduce monthly costs. In addition, this state offers a variety of financial incentives for installing solar panels.

Nex Metering

Net metering is one of Texas’s most beneficial solar incentives and many other states. It’s a billing arrangement between utility customers and their electricity providers. Since Texas has an unregulated grid, net metering in Texas allows eligible customers who generate their electricity from renewable sources to receive a credit on their electric bill for the surplus power they produce. Consumers can use this credit to offset the cost of future electricity consumption.

Federal Tax Incentive

The federal solar tax credit for 2022 (Investment Tax Credit or ITC) allows homeowners to claim a credit of 26% of the solar panel installation cost by the end of the year. If you plan on installing a solar panel system in 2023, expect an incentive of 23%. The credit is available for both new and existing homes.

Local Solar Panel Rebates in Texas

The state of Texas doesn’t yet have statewide solar credits or rebates. Likewise, there are no universal solar buyback plans in Texas. Still, many local governments offer some form of incentive for solar energy systems for residential and commercial installations. Here are some examples of solar tax credit options you can take advantage of in 2022:

  • Austin Energy: a rebate of $2,500 and its Value of Solar Tariff
  • CPS Energy (refers primarily to San Antonio solar power)
    • Residential property: a rebate of $2,500 per project plus a $500 premium for projects that utilize local modules
    • Commercial property: $0.60 per AC Watt for the first 25kW, $0.40 after, plus a $0.10 premium for projects that utilize local modules
  • Oncor: Residential Solar Program connects you with your local providers to help you calculate the value of these Oncor Texas solar panel incentives
  • AEP Texas Incentive
    • Residential property (fixed incentives): $0.5 per Wdc up to 2.999 kWdc, $1,500 for up to 4.999 kWdc, $2,250 for up to 7.499 kWdc, and $3,000 for up to 30 kWdc $0.50/Wdc
    • Commercial property (tiered incentives): $0.50 per Watt for up to 25 kWdc, $0.25 per Watt for up to 200 kWdc
  • Dallas and Houston don’t have a regulated market, and each consumer can choose their provider. That means that providers’ rebates and solar buyback programs for solar panels in Houston and Dallas are variable.

Property Tax Exemptions

Homeowners in the Lone Star State who install solar panels on their property can receive a tax exemption equal to the appraised value of the solar system. This exemption applies to both the installation cost and the value of the solar panels themselves in both commercial and residential properties. It applies to both new construction and retrofit projects.

Solar Rights Law

This law prevents homeowners associations from banning solar panels on their properties. This means that no HOA regulations can prevent you from installing a residential solar system in Texas.

Disadvantages of Solar Panels in Texas

While solar panels are a renewable energy resource, they also have drawbacks. Here’s why solar panels are not worth it for some homes and what you need to consider before purchasing a solar energy system.

Not the Best for Every Home

Even though Texas is one of the sunniest states in the US, not all homes get an equal amount of sunlight. For example, northern Texas may not receive as much sunlight as homes in southern Texas, making solar panels less effective. Plus, there are multiple other conditions your home must fulfill for solar panels to generate enough power to get you off-grid ultimately.

However, there are some problems you can solve quickly, one being possible solar panel inefficiency due to the home’s position in the shade. Learn more about the possible workarounds.

Upfront Cost

The average solar panel installation cost in Texas ranges from $11,432 to $15,468. This means that the average cost of solar panels in Texas is only about $2.69 per Watt before federal tax credits and other financing options.

Of course, the cost to install solar panels in Texas varies depending on factors such as monthly electricity usage, type and brand of solar panels, number of peak sunlight hours, and number of solar panels. Feel free to check the solar panel cost calculator for Texas to see the cost estimates.

Though it’s safe to say that the upfront cost of going solar in Texas is no longer as high as it once was, it can still be too much for many homeowners.

Payback Time

The average payback time for solar panels is around 12 years. Again, it may seem like an eternity to some people. But hey, according to Energy Sage, you stand to save more than $16,000 after 20 years

Maintenance Cost

Solar panels are not too expensive to maintain, but improper care can lead to inefficient and possibly forever broken systems (which leads to more money spent), so you must regularly clean the panels to ensure they are working properly. You may also need to replace the panels every few years.

Here’s what you can expect to pay for maintaining your solar system—the national average cost of inspection and cleaning of a 2kW system of ten panels falls between $300 and $700.

The Best Solar Panel Orientation in the Texas Area

While there may be variations depending on your exact location, the south is generally considered the best orientation for solar panels in Texas. Not only is the sun in the southern sky for most of the year, but panels that are oriented towards the south also experience less shading from trees and other objects throughout the day and receive more direct sunlight.

Best Tilt Angle

It would be best to tilt solar panels at an angle that captures the maximum sunlight possible. Texas solar panels are typically tilted between 30 and 45 degrees (or they should be). So, how much are properly tilted solar panels going to improve the power output? You can see up to 25% more energy production.

Our Takeaway

Lone Star State property owners are becoming increasingly aware of Texas’s solar power harnessing possibilities and solar energy benefits. With the state’s high electricity rates, solar panels can save a lot of money on the energy bill. In addition, there are several solar panel incentives in Texas, including various rebate programs and property tax exemptions. 

Is solar energy worth it? It will cost you more money upfront to install solar panels than other forms of power. However, the long-term savings make them worth the investment, especially in a state like Texas, where the sun shines brightly throughout the year.

Solar Panels in Texas │FAQs

Do solar panels add value to a house in Texas?

Solar panels are typically seen as a valuable addition to a home. According to a Lawrence Berkeley National Laboratory study, a properly installed solar system could increase the property value by as much as $15,000. However, if not installed properly, solar panels could decrease the home’s value.

How much can you save with solar panels in Texas?

The average household in Texas spends about $1,801 a year on electricity, but that number can be decreased by up to $960 a year with solar panels.

Can you get solar for free in Texas?

Unfortunately, you can’t get free solar panels in Texas. Still, many programs are available that allow you to get solar panels installed for free or at a significantly discounted rate. Some of these programs are offered through the state government, while utility companies provide others.

Can you sell electricity back to the grid in Texas?

If you have a renewable energy source (solar panels, wind turbines, etc.), you may be able to sell the excess electricity that you generate back to the grid. In deregulated electricity markets like Texas, you can choose your electricity provider. This means that you may have the option to sell electricity back to the grid if your provider offers this option (net metering).

How long do solar panels last in Texas?

Most manufacturers provide a 25-year warranty on their panels. However, the actual lifespan of a solar panel depends on many factors, including the quality of the panel and the amount of sunlight it receives. Generally, solar panels last less in extreme conditions, be it extreme heat or cold. So are solar panels worth it in Texas heat? You can expect them to last up to 30 years in Texas (even longer with proper maintenance).