As one of the sunniest states in the US, Texas is the perfect location for solar energy investment. Considering the abundant amount of sun exposure and numerous solar incentives, installing solar panels on your property in Texas is definitely worth it in the long run. But when it comes to the overall cost of solar installation, it depends on many factors.
In this article, you’ll find out everything you need to know about installing solar panels, including the cost of solar in Texas.
The Average Cost of Solar in Texas
Since the average size of a solar energy system is about 5 kilowatts (kW), one solar panel costs $2.30 to $3.12 per watt on average in Texas. Therefore, if you want to install a solar system, it can cost from $11,500 to $15,500 in total. However, if you account for the Federal Solar Tax Credit, which is 26% of the overall cost of the solar panel system, the price will be much lower.
While these numbers may seem daunting, keep in mind that installing a solar panel system on your property is a long-term investment. If you install high-quality solar panels, you can expect them to last for at least 25 years. Not only that, but you’ll also be able to save around $14,000 to $19,000 in the next 20 years. Money that would be otherwise spent on your electricity bill.
It’s also important to mention that in the last five years, the average cost of solar in Texas dropped by 36%. There are a lot of other factors that can influence how much solar installations can cost in Texas, which will be discussed later in the article.
Solar Panel Installation Cost per Power Output in Texas
Below, you’ll see the average costs of solar panel installation per system size in Texas in 2021. Note that they may be subject to change in the future.
- 3 kW – $8,130
- 4 kW – $10,840
- 5 kW – $13,550
- 6 kW – $16,260
- 7 kW – $18,970
- 8 kW – $21,680
- 9 kW – $24,390
- 10 kW -$27,100
As you can see, the more power they generate, the higher the price. Be aware that the Federal Solar Tax Credit isn’t calculated in these numbers, or any other incentives and rebates. If you were to count in the Federal Solar Tax Credit, the overall cost would be reduced by at least a few thousand dollars.
For example, the average cost of the 5-kW panel without the Federal Solar Tax Credit is somewhere around $13,500. However, if the incentive is applied, then it would cost $10,000. Also, solar power installation costs depend on the average energy consumption level per household.
As mentioned, by investing in solar panels, you’d eventually be saving money by reducing your electricity bills. This is otherwise known as the solar payback period, and it estimates how much time you will need to break even on the initial investment. The solar payback period can vary, depending on the state. In Texas, it lasts from nine to 12 years on average.
Solar Incentives and Rebates in Texas
Texas is by far the highest producer of carbon dioxide emissions in the US. This is why local governments introduced the Federal Solar Tax Credit (ITC) and other incentive programs to encourage homeowners to move onto renewable solar energy.
There are several rebates, credits, and incentives to help people afford this environmentally-friendly investment. As a homeowner, you have the right to apply to any of them, as long as you meet all the requirements.
Federal Solar Tax Credit
The Federal Solar Tax Credit or the Incentive Tax Credit (ITC) is one of the most reliable solar incentives. It can even deduct 26% of your entire solar panel installation, reducing the overall amount by a few hundred dollars. It’s important to mention that the ITC will only be worth 26% in deductions until the end of 2022. By 2023, the incentive program will reduce the overall amount by 22%.
Technically speaking, all citizens of Texas are allowed to apply for this program. But you are only eligible for the ITC if you buy a solar power system, whether it’s through a loan or another method of payment. Those who wish to lease it won’t be able to apply for this federal incentive program.
Net Metering
Another interesting program for homeowners is net metering. It’s intended for those who want to sell solar energy that’s not being used back to their utility company. In return, they will receive credits which they can then cash in, thus reducing their solar payback period.
Keep in mind that net metering programs are state-wide; therefore, your eligibility and the number of credits you receive will depend on the policy of your local utility.
Local Solar Rebates in Texas
There are a lot of local solar incentives and rebates all over Texas. Some of the most popular include Austin Energy, CPS Energy, Oncor Electric Delivery, Guadalupe Valley Electric Cooperative, the City of Sunset Valley, and more. Depending on the solar rebate you choose, you can receive various amounts of returns on your initial investment.
Factors That Affect the Cost of a Solar System in Texas
As highlighted earlier, the overall cost of solar in Texas can depend on many factors. One of the most significant determinants includes the location and the average energy consumption level per household.
The more power your house needs, the more money you’ll have to set aside for the solar panel installation. Permitting and inspection costs, as well as installer profit margins, also determine how much money you will spend on the entire project.
Solar equipment has an impact on the installation price. For example, the type of solar panels you choose matters. For residential solar installations, you can choose polycrystalline or monocrystalline solar panels.
Polycrystalline solar panels are cheaper, but they’re less efficient. In contrast, monocrystalline are of higher quality, but tend to cost more. The solar panels you choose will also determine how long your solar system will last.
Considering that the effectiveness of solar panels is reduced by around 0.8% annually, it’s natural that they start to deteriorate over time. However, if you invest in a high-quality solar system, with proper maintenance, you’ll be able to use it for the next 25 years.
Either way, solar systems cost a significant amount of money. Hence, it’s important to view solar installation as a long-term investment that will eventually pay off over time.
How to Choose a Solar System?
There are various types of solar systems to choose from. Installing solar panels at your home will actually increase the overall value of your property, so it’s important to install the right ones. The solar system you end up picking will be determined by your energy requirements, the size of your property, your current energy bills, the geographical location of your residence, the weather conditions, and many more factors.
Therefore, before you choose a solar system, there are several things you need to check first. The amount of energy you currently use and the required system capacity are two of the most important factors. You also need to make sure that your roof is facing the right way in order for the maximum capacity of the solar panels.
When you find a solar system that meets all your requirements, you need to determine its efficiency and compare it to the industry average of 16% to 18%. Then, you need to check the solar system’s warranty, once again, in comparison to the industry average (10 to 25 years). Lastly, you need to make sure that the overall and monthly costs of the solar system align with your income.
Some of the most efficient solar panel manufacturers include SunPower, LG Solar, REC Group, Panasonic, Upsolar, LONGi, and so on.
Solar Installation Companies in Texas
There are almost 600 solar companies in Texas, and their number will only grow in the future. What’s more, a lot of solar energy companies in Texas offer their own rebates, while others offer solar leases and quick installations. With the right solar installation company, you can end up saving even more money.
Some of the most popular solar installation companies in Texas include Austin Energy, CPS Energy, TXU Energy, Guadalupe Valley Electric Cooperative, Garland Power & Light, City of Sunset Valley, and Oncor Electric Delivery.
Are Solar Panels Worth It in Texas?
Given that Texas is the second-largest state in the US, economic growth has resulted in higher energy consumption levels. In fact, average residential electric bills are 20% higher than those in other states.
These conditions have given rise to a lot of federal, state, and local solar incentives, encouraging many homeowners to invest in solar energy. By installing solar panels on your property, you are sure to save a lot of money on your electricity bill and can also expect to get returns on your investment.
Investing in solar energy ultimately pays off as Texas is one of the sunniest states in the US. To be precise, it enjoys 234 sunny days per year on average.
What’s more, there are at least six sunny hours per day, no matter which part of Texas you live in. In El Paso, it’s sunny for 8.6 hours per day. When you compare these statistics to other places in the US, where there are three to five hours of sun exposure, Texas definitely stands out.
Make the Most Out of Sunny Texas
The average cost of solar in Texas can depend on many factors, including the size of the property, how much energy it uses, your location, etc. There are many benefits of investing in solar energy, especially in a sunny state such as Texas. Not only will you be saving money, but you’ll also make an environmentally-friendly decision that will help the planet.