Reviewed by: Dylan DeSantis, SolarMetric
Last Updated: May 16, 2026
Quick Answer
Solar panels in Texas cost $2.17 per watt installed, or roughly $29,400 for a typical 13.5 kW system (before incentives), based on current EnergySage marketplace data. Texas has no state income tax and no state solar credit, but a 100% property tax exemption on your system’s added home value saves $400–$600 per year. Note: the federal 30% solar tax credit (Section 25D) expired December 31, 2025.
Average Solar Installation Cost in Texas (2026)
Texas is one of the more affordable states for solar installation. The average cost per watt is $2.17, compared to a national average closer to $2.90–$3.00/watt. Larger systems get slightly better per-watt pricing because you’re buying panels in bulk.
The table below shows estimated costs at common system sizes in Texas, before any incentives.
| System Size | Estimated Cost (Before Incentives) | Annual Production (Est.) | Homes It Powers |
|---|---|---|---|
| 6 kW | $13,020 | 8,400 kWh | Small home / low usage |
| 8 kW | $17,360 | 11,200 kWh | Average 1–2 bedroom home |
| 10 kW | $21,700 | 14,000 kWh | Average 3–4 bedroom home |
| 12 kW | $26,040 | 16,800 kWh | Larger home / high AC usage |
| 13.5 kW | $29,295 | 18,900 kWh | Texas average system |
| 15 kW | $32,550 | 21,000 kWh | Large home / EV charger |
Based on EnergySage marketplace data for Texas (May 2026). Production estimates use 5.5 peak sun hours/day.
Actual quotes range: $25,000–$34,000 for the average Texas system. Your quote will depend on your roof type, panel brand, inverter choice, and installer.
Cost Per Watt in Texas
At $2.17/watt, Texas is priced 25–30% below the national average for installed solar. Several factors drive this down:
- High installer competition across Dallas, Houston, Austin, and San Antonio
- Relatively simple roof profiles on many Texas homes
- A large, mature solar market with established supply chains
City-by-city breakdown (EnergySage, May 2026):
| City | Average Cost/Watt | Average System Size | Average Total Cost |
|---|---|---|---|
| Houston | $2.17/W | 13.56 kW | ~$29,445 |
| Dallas | $2.18/W | 12.71 kW | ~$27,707 |
| Austin | $2.17/W | 13.64 kW | ~$29,599 |
| San Antonio | $2.17/W | 13.48 kW | ~$29,252 |
| El Paso | $2.20/W | 12.80 kW | ~$28,160 |
Prices in Houston and San Antonio are essentially identical — the competitive installer market has equalized costs across the major metros.
Texas Solar Incentives and Rebates (2026)
Federal Tax Credit: Expired
The federal residential solar tax credit (Section 25D) — which covered 30% of system cost — expired December 31, 2025, under the One Big Beautiful Bill Act signed July 4, 2025. If you installed solar before year-end 2025, you can still carry forward unused credits. For new installations in 2026 and beyond, no federal residential credit applies.
This is the single biggest change to Texas solar economics in years. A $29,400 system that would have cost $20,580 after the federal credit now costs the full $29,400 (minus any state/local incentives below).
Texas Property Tax Exemption ✓
Texas offers a 100% property tax exemption on the added home value from solar installation, under Texas Tax Code Section 11.27. Solar adds roughly $15,000–$25,000 to your home’s value, but none of that added value is taxed.
Estimated savings: $400–$600 per year, depending on your county tax rate. Over a 25-year system lifetime, that’s $10,000–$15,000 in avoided property taxes.
How to claim it: File Form 50-123 with your county appraisal district by April 30 of the year following your installation (see step-by-step below).
Austin Energy Rebate ✓ (Austin residents only)
Austin Energy offers a $2,500 cash rebate for qualifying residential solar installations. You must use a pre-approved contractor from the Austin Energy list. This rebate is only available within Austin Energy’s service territory.
Austin Energy also uses a Value of Solar (VoS) tariff at approximately 9.91¢/kWh for exported power — rather than a standard buyback plan.
CPS Energy Solar Rebate ✓ (San Antonio residents only)
CPS Energy (San Antonio) offers rebates through its rooftop solar program. Rates and availability change periodically — check CPS Energy’s website for the current rebate amount.
No State Income Tax Credit
Texas has no state income tax, so there is no state-level solar income tax credit. The property tax exemption is the primary state-level incentive.
How to Claim the Texas Property Tax Exemption
- Install your solar system — Once installation is complete, you’re eligible.
- Download Form 50-123 — “Application for Solar or Wind-Powered Energy Device Exemption” from the Texas Comptroller website (comptroller.texas.gov).
- Complete the form — Include your property address, system size (kW), installation date, and installer name.
- Submit to your county appraisal district — Not the state; find your county’s appraisal district at texas.gov. Deadline is April 30 of the year following installation.
- Keep a copy for your records — Your exemption renews automatically as long as the system is installed. No annual refiling required.
Net Metering in Texas: What You Need to Know
Texas has no mandatory statewide net metering. Unlike most states, the Texas electricity market (ERCOT) is deregulated — your Retail Electric Provider (REP) sets the rules for how exported solar power is credited.
Your options depend on where you live:
| Utility / Provider | Coverage Area | Buyback Type | Export Rate |
|---|---|---|---|
| Austin Energy | Austin city limits | Value of Solar tariff | ~9.91¢/kWh |
| CPS Energy | San Antonio area | Excess generation credit | Varies (~7–9¢/kWh) |
| Deregulated ERCOT (REP) | Most of Texas | Solar buyback plan (optional) | 3¢–retail rate, varies by plan |
| Oncor / AEP territory (co-ops, munis) | Rural/suburban TX | Varies by utility | Varies |
For the 85% of Texas on the ERCOT deregulated grid: you need to actively choose a REP that offers a solar buyback plan. Without choosing the right plan, your exported power may earn nothing. Plans like TXU’s Solar Buyback offer near-retail-rate credits; others pay closer to 7–8.5¢/kWh.
The bottom line: Texas net metering is patchwork and REP-dependent. Before installing solar, check which REPs serve your address and compare their buyback plan terms. The wrong plan can extend your payback period by 2–3 years.
Top Solar Companies Operating in Texas
Texas has one of the most competitive solar installer markets in the country. Here are five companies worth getting quotes from:
1. Freedom Solar Power
Freedom Solar Power is Texas-based, founded in Austin, and specializes in residential and commercial solar across the state. It uses premium equipment (SunPower panels and Tesla Powerwall) and has a strong Texas service network. Known for reliable customer service and handling all permitting in-house.
2. Sunrun
Sunrun is the largest residential solar installer in the U.S. and has a major presence in Texas. In 2025, Sunrun partnered with Tesla to offer the Tesla Electric+ Flex plan for Texas customers, integrating solar with Powerwall battery storage. Sunrun offers cash, loan, lease, and PPA options.
3. Palmetto Solar
Palmetto consistently earns high customer satisfaction ratings in Texas. It provides end-to-end project management and works with top-tier equipment manufacturers. Strong post-installation support and a warranty-focused approach.
4. Tesla Energy
Tesla offers competitive pricing on solar panels and is the only source of the Powerwall 3 battery. Its online quote tool makes pricing transparent. Best for homeowners who want a fully integrated solar + storage system. Installer network in Texas is strong in major metros.
5. Atma Energy
Atma Energy won EnergySage’s 2026 Local Installer of the Year award for Texas. A Texas-focused installer with strong ratings on EnergySage and an emphasis on custom system design. Best for homeowners who want a local, relationship-oriented installer rather than a national company.
Get quotes from at least three installers. In Texas’s competitive market, quotes often vary by $3,000–$6,000 for the same system size.
Is Solar Worth It in Texas in 2026?
Verdict: Yes, for most Texas homeowners — with an important caveat.
Without the federal tax credit, payback periods are longer than they were a year ago. But Texas’s lower-than-average installation costs, strong sun, and property tax exemption still make solar a solid long-term investment.
Payback period estimates (2026, no federal ITC):
| Scenario | System Cost | Annual Savings | Est. Payback |
|---|---|---|---|
| Austin (Austin Energy rebate + VoS) | $29,600 − $2,500 = $27,100 | ~$2,100 | ~13 years |
| Houston (ERCOT, retail buyback plan) | $29,445 | ~$1,800 | ~16 years |
| Dallas (ERCOT, retail buyback plan) | $27,700 | ~$1,700 | ~16 years |
| San Antonio (CPS Energy) | $29,250 | ~$1,900 | ~15 years |
| El Paso (high sun hours, ~6.5 hr/day) | $28,160 | ~$2,200 | ~13 years |
Annual savings based on ~$0.154/kWh avg rate (EIA, 2026), solar covering ~85% of usage, and appropriate REP buyback plan. Payback does not include property tax savings, which reduce effective cost by $10,000–$15,000 over the system’s life.
Solar is most worth it in Texas when:
– You pay above-average electricity rates (common in Houston’s competitive REP market during summer)
– You live in Austin or El Paso (more sun, better buyback rates)
– You can choose a REP with a strong solar buyback plan
– You plan to stay in your home 10+ years
Solar is less straightforward when:
– You’re on a low-rate utility plan with no buyback option
– Your roof has significant shade or faces north
– You plan to move in under 5 years
Even at 13–16 year payback, a 25-year system still delivers 9–12 years of free electricity after you break even. At current Texas electricity rates — which have increased 5–8% per year in recent years — that’s substantial savings.
Worked Examples: What Texas Homeowners Actually Pay
These examples use real numbers to illustrate typical scenarios.
Example 1: Houston homeowner, $180/month electric bill
– System size: 10 kW
– Total cost: $21,700
– Annual savings: ~$1,836 (85% of $2,160 annual bill)
– Payback: ~11.8 years
– 25-year net savings: ~$24,200
Example 2: Austin homeowner, $200/month electric bill
– System size: 11 kW
– Total cost: $23,870 − $2,500 (Austin Energy rebate) = $21,370
– Annual savings: ~$2,040
– Payback: ~10.5 years
– 25-year net savings: ~$29,630
Example 3: Dallas homeowner, $220/month electric bill, TXU Solar Buyback plan
– System size: 12 kW
– Total cost: $26,160
– Annual savings: ~$2,244
– Payback: ~11.7 years
– 25-year net savings: ~$30,000
Example 4: El Paso homeowner, $150/month electric bill
– System size: 8 kW
– Total cost: $17,600
– Annual savings: ~$1,530 (high sun hours offset smaller bill)
– Payback: ~11.5 years
– 25-year net savings: ~$20,650
Frequently Asked Questions
Is there a federal solar tax credit in Texas in 2026?
No. The federal residential solar tax credit (Section 25D) expired December 31, 2025, under the One Big Beautiful Bill Act signed July 4, 2025. New solar installations in 2026 do not qualify. If you installed before year-end 2025, you can still carry forward unused credits. Texas’s property tax exemption is now the primary solar incentive.
Does Texas have net metering?
Texas has no mandatory statewide net metering. Most Texas homeowners are on the deregulated ERCOT grid and must choose a Retail Electric Provider (REP) that offers a solar buyback plan. Without the right plan, exported power earns no credit. Austin Energy customers use a Value of Solar tariff at ~9.91¢/kWh.
What is the average solar payback period in Texas in 2026?
Without the federal tax credit, the average payback period in Texas is 11–16 years depending on your city and REP buyback plan. Austin residents with the $2,500 Austin Energy rebate and a good buyback plan can achieve closer to 10–13 years. After payback, most systems run 25+ years.
How much does a typical Texas solar system cost?
Based on EnergySage marketplace data (May 2026), the average Texas solar system is 13.5 kW and costs approximately $29,400 before any incentives. Smaller homes typically need 8–10 kW systems ranging from $17,400–$21,700. Get at least three quotes — pricing in Texas varies by $3,000–$6,000 for the same system size.
Does solar increase property taxes in Texas?
No. Texas offers a 100% property tax exemption on the added home value from a solar installation under TX Tax Code Section 11.27. File Form 50-123 with your county appraisal district by April 30 of the year after installation. This exemption saves $400–$600 per year and does not need to be renewed annually.
Sources and Methodology
SolarMetric researched this guide using the following primary sources:
- EnergySage Solar Marketplace — Cost-per-watt and system size data based on actual quotes submitted by Texas homeowners (May 2026): energysage.com/local-data/solar-panel-cost/tx/
- IRS.gov — FAQs on Section 25D expiration under Public Law 119-21 (One Big Beautiful Bill Act, July 4, 2025): irs.gov/newsroom/faqs-for-modification-of-sections-25c-25d
- U.S. Energy Information Administration (EIA) — Average Texas residential electricity rate (~$0.154/kWh, 2026): eia.gov/electricity/data/browser/
- Texas Comptroller of Public Accounts — Form 50-123 and property tax exemption details: comptroller.texas.gov
- Austin Energy — Value of Solar tariff rate and rebate program details: austinenergy.com
- SEIA — One Big Beautiful Bill Act solar credit analysis: seia.org/research-resources/clean-energy-provisions-big-beautiful-bill/
Payback estimates are illustrative, based on average costs, EIA electricity rates, and an assumed 85% offset rate. Actual savings depend on your utility plan, buyback rate, system production, and usage patterns.
Reviewed by: Dylan DeSantis, SolarMetric