Are you thinking of installing solar panels in Texas? Good news: The Lone Star State has a rapidly growing solar market, with plenty of sunshine and an installed solar capacity only second to California.
According to recent data, the price of a 5 kilowatt (kW) solar installation in Texas is between $11,432 – $15,467. After factoring in money-saving incentives and tax credits available, that estimate will drop considerably. To find out more about the costs and benefits of installing solar panels in Texas, read on!
Primary Factors that Determine Costs
Size of the System
Before you install solar panels, your first step is to determine what size of system you’ll need. Look at your home’s energy needs and how much electrical usage you want your solar panels to cover. Many choose to cover 100% of their energy needs with solar power, eliminating future electricity bills!
The average U.S. home consumes about 10,400 kWh (kilowatt-hours) a year, so to fully cover a similar home’s electrical needs, you’d need between 28 and 34 250-watt panels (a popular size).
How much sunlight your area receives also affects the size of the system you will need. El Paso gets a whopping 293 sunny days annually, and many other cities in Texas average well over 200.
Harnessing solar energy requires the following equipment:
Solar panels – Monocrystalline and polycrystalline are the two types of panels to choose from. They work similarly, with monocrystalline having a more streamlined appearance, higher efficiency rating, and the higher cost associated with those benefits.
Racking – Solar panels aren’t installed right onto your roof- instead, they’re mounted upon a racking system installed upon your roof. The racking system places your solar panels to receive maximum energy from the sun while avoiding damage to your roof. Instead of roof racking, if you are in the market for a solar carport or ground mount solar, you can find a mounting system to fit your needs.
Inverters – Solar power is received as DC current, and the inverter switches it to AC power, which most homes are wired to use.
Performance monitoring system – These let you monitor how effectively your system is running. Performance monitoring systems measure how much energy your system produces per hour and identify any issues that may come up with your solar system.
Solar batteries – Solar power storage systems let homeowners use solar energy that their homes generate when sunlight isn’t available, such as at night or on cloudy days. That way, even if your town is more overcast, you can still benefit from solar power at those less sunny times.
The Solar Installation Company
More and more people nationwide are making the switch to solar energy, and Texas is no exception! There’s a wide array of solar companies to choose from and installation quotes vary, so check with your local solar installers to get quotes for your area.
Some companies charge high fees to cover their usage of top-notch equipment, while others spend more money on advertising and promotional items, transmitting that cost to the customer.
Take the time to research local solar companies. You can also ask neighbors with solar energy systems how happy they are with their installers. Try to ask multiple providers for quotes and to compare their reviews and solar equipment used.
Read More: The Best Solar Companies in Texas 2023
Price of Installation Breakdown
Panels have a reputation for being the most costly part of a solar system, but they only make up about 34% of your total cost. The significant investment is actually in labor and overhead costs.
Thoroughly researching your purchase could save you up to thousands of dollars on installation costs. Large-scale companies already have a reputation, so they can charge more and not worry about competition from small-scale businesses. They also frequently charge to cover their extensive marketing and additional overhead expenses.
Texas Solar Incentives, Tax Credits, and Rebates
A significant savings to consider is the federal tax credit (ITC), one of the most generous incentives nationwide. This tax credit allows you to cut the amount you pay in taxes by 30 percent of your solar system’s total cost. For example, a $10,000 system entitles you to a $3,000 credit towards your federal taxes.
Texas doesn’t offer any statewide incentives, but as a resident, you can take advantage of local solar incentives to help offset the costs.
Electric companies across the state offer saving worth checking out:
Austin residents can receive a rebate worth $2,500 toward their solar costs, plus access to Austin Energy’s Value of Solar Tariff. This incentive will pay you $0.097 for each kilowatt-hour (kWh) of solar energy your panels generate, which can be a sizeable amount considering the high levels of sunlight in the region.
CPS Energy offers customers up to $1.20/W towards the cost of solar panels they install on their roofs. As the amount of solar is installed, that amount does drop.
Oncor customers are also entitled to a rebate- the company will pay a cash rebate of $538.83/kW (kilowatt) for customers’ solar panel installation, in addition to a credit for electricity generated,
Some other electric companies that currently offer rebates to homeowners are Guadalupe Valley Electric Cooperative, Garland Power and Light, and the City of Sunset Valley. Contact your local electric company to inquire about what incentives they may offer homeowners.
Solar Financing Options
Paying for your solar panel system upfront makes you the owner. Owning them gives you some benefits, not the least of which is increased home value.
If buying isn’t a viable option for you, solar loans and solar leases/PPAs can be beneficial. Both offer $0 down, and your monthly payments will most likely be less than your current electric bill. Solar loans can be paid off in an average of 7-15 years, while solar leases often come with a 20-25 year term of repayment.
Other Factors that Affect the Cost
Installing solar panels in Texas is a long-term investment, so think about the savings you will encounter over the next twenty years or so Good things to consider are:
Cost of materials needed for installation
Labor and overhead fees from your installer
Savings you’ll receive through federal, state and local tax credits
The cost and average power usage on your current electric bills
What you can expect to save on future bills (or lack of!)
How long it takes you to financially recover from your investment in a solar power system is known as the payback period. Texas has an average payback period of 9.3-12.6 years, so after that time, your savings on electricity would have paid for the full cost of your solar system.
Solar panels often come with a 20-30 year warranty, meaning you will generate clean, essentially free electricity (other than connection fees) far after you surpass the payback period.
Resident Electricity Rates in TX
In Texas, residents pay an average of 8.38 cents per kilowatt-hour (kWh). Yes, this figure is lower than the national average of 10.48 cents per kWh, but this is one payment that you can entirely eliminate if your solar panels cover the full electrical needs of your home! Considering the 20+ year lifespan of solar panels, this amounts to great savings on electric bills over time.
Your roof’s size and configuration play a part in determining your solar installation cost. Some things to consider are how steep your roof is, if it has one or multiple levels, and if skylights or other items are installed.
The condition of your roof also matters. An old roof may need replacement since solar panels tend to last 20-25 years. However, you can likely bundle this expense into your solar project, possibly qualifying for incentives and rebates.
Costs by City
Which city or county you reside in also plays a part in determining the cost. Brown County residents pay an average of $16,875 for a 5-kilowatt (kW) system, dropping down to $11,812 after factoring in tax credits. The same size system would average $8,941 in Anderson County, or just $6,259 after those savings.
These are just estimates, and it’s good to remember that solar systems are highly customizable to your finances and power needs.
Solar panel systems tend to be quite self-sufficient, with minimal maintenance required throughout the year- cleaning and inspection. Regular cleaning of your system keeps it running smoothly, and an inspector will alert you if a problem arises.
The cost of professional cleaning services averages $3 – $10 per panel, or a flat rate of at least $100. Cleaning your own panels is an option- some people do, but be sure to speak with your installer before trying it yourself!
Annual inspection runs about $150 per year. During an inspection, the contractor searches for cracks or issues with the system. The price to repair a solar panel averages around $650.
Your system’s performance is often covered by warranties that the installation company issues. If the damage is due to inclement weather, your homeowner’s insurance will likely cover some of that expense. Be sure to ask a professional for more information, as warranties and insurance vary.
Home Value Increase
The average U.S. home powered by solar energy increases in value by 4.1%. That estimate does vary from place to place, and more studies are needed to determine accurate figures nationwide. According to a recent Zillow study, in no cities do residences drop in value when the owner has purchased solar panels outright (leasing may be another story).
How to Determine Your Solar Installation Costs
Solar Panel Cost Calculator
Project Sunroof is a helpful resource that estimates the price for your specific home and solar project. This calculator uses Google Earth images to estimate your personalized solar quote by viewing your roof’s shape and determining local weather, two key factors in solar costs.
Project Sunroof then asks for your electric bill information to estimate how many solar panels you’d need and what the cost would be. You can then compare funding options for your project.
With strong annual sunshine and below-average costs, the Lone Star State is an excellent location for solar energy. Texas already has 2.6 GW of solar power installed, and the renewable energy sector is growing rapidly!
Many money-saving initiatives for startup won’t last long- particularly the generous ITC incentive. Talk with installers in your area to get started on your solar energy system!
People also ask
Solar cost per watt in Texas?
The average cost per watt in Texas ranges from $2.36 to $3.20. Prices will likely continue to decrease, but the same can’t be said for incentives and tax credits.
Is solar worth it in Teaxs?
In short, yes. Solar energy is a steadily increasing market that’s only expanding, and Texans benefit from a high amount of annual sunlight and below-average solar costs.
Solar plans are highly customizable these days, so you’re likely to find one to fit your needs!
How many solar panels are needed to power a house?
The amount is affected by several factors, such as the solar panel wattage, home size, average energy usage, and how fully you want to cover your electrical needs.
If you use an average of 10,400 kWh of electricity per year and use the common 250-watt solar panels, then you’d need an estimated 28-34 panels to fully cover your electrical needs.
How long do solar panels last?
They last for an average of 20-25 years. They may still produce electricity after this mark, but their production will likely slow down. Solar panels are quite durable and don’t require much maintenance- just an annual cleaning and inspection to keep them running smoothly.
Take the time to research your panels’ warranties, ensuring they’re well-covered for defects and environmental damage that you may incur over the years.
Can I install my own solar panels?
Yes, but with some risks. Home solar kits cost much less than professional installation, but quality, workmanship, and proper installation are not as well- guaranteed, so be sure to research how reputable the manufacturing company is.
Most installers are highly experienced, licensed, certified, and familiar with the installation process. Think about it before going this route- solar panel warranties usually cover work done by licensed professionals, not necessarily the DIY method. A professional’s experience comes with a higher price tag, but it might pay off in the long run.