Texas produces enough solar energy to power over 350,000 homes and has a whopping $4.63 billion invested in solar technology. Prices in Texas have plunged by 38 percent over the last five years, and as a result, the state is expected to more than double its installed solar capacity by 2024.
If you are a Texas resident who has been thinking of going solar, this is an ideal time to get started. The investment may seem daunting at first but fear not. There are several financial incentives to help make 2023 the perfect year to invest in a solar power installation. Read on to learn more about how you can benefit as a Texas resident making the switch to solar!
Cost of Solar Panels
Solar power installation is on the rise across the country, but Texas is enjoying an especially strong boom. With plenty of annual sunlight and below-average installation costs, solar power is making great strides in the Lone Star State. Installers and local and federal organizations offer residents incentives to help them make the switch to clean solar energy. As equipment has advanced and become more significant over the years, prices have dropped.
The total cost of a solar panel system for your Texas property depends on a few things, including your county of residence, the size of your system, the installation company you have chosen, and the equipment used. According to recent data, the average price of a 5 kilowatt (kW) solar installation in Texas is about $10,000 (after calculating the tax credit). Without any tax credits, the price is about $14,000 for a 5 kW system.
Current Solar Incentives in Texas
Solar power may sound like too much of an initial investment, but the good news is that 2021 offers plenty of opportunities to save on your solar purchase in The Lone Star State.
Texas’ leadership in solar energy production is largely due to the many financial incentives that make it easy and affordable to go solar. Among the most generous incentives are the rebate programs developed and operated by the in-state electric utilities. There is also a significant federal solar tax credit to help you save even more money for a limited time. There are several financial incentives available this year to help you out, so read on to find out more!
Electric Company Rebates
Utility companies across Texas frequently offer their customers rebates towards their solar purchase. These are some of the most popular and helpful incentives unique to Texas residents.
For instance, Oncor Electric Delivery is currently offering rebates to their customers who install a solar system 1 to 15 kilowatts in size. The amount of their rebate depends on the size of the customer’s system; larger sized systems will earn you a more substantial rebate.
A similar program operated by CoServ offers a maximum $3,100 rebate for ratepayers who install solar systems. CPS Energy customers can be compensated up to $1.20/W towards the cost of solar panels they install on their roofs. As the amount of solar power that is installed increases, the per-watt value of the rebate does drop.
Additionally, AEP Texas’ rebate program offers $0.60 per watt generated, up to a maximum of $6,000. These programs often have strict application requirements regarding the tilt of the panels, the amount of power the panels produce, and the types of meters you can utilize.
Other electric companies that are currently offering rebates to homeowners are Guadalupe Valley Electric Cooperative, Garland Power & Light, and the City of Sunset Valley. Be sure to check with your local electric company to see what incentives they may offer homeowners.
Some Texan cities have their own rebate programs. Austin, for instance, offers a residential solar rebate program that allows homeowners to claim a $2,500 rebate on approved systems. To qualify, homeowners need only connect their system to the grid using an installer and equipment approved by Austin Energy.
San Antonio offers a similar program, the Solar PV Rebate Program, that offers $2,500 to homeowners plus another $500 for locally produced panels. Check online to see if your city offers financial incentives for residents who want to adopt solar energy.
Property Tax Exemption
Texas also offers a property tax exemption for the value of solar systems. That means that for property tax purposes, you can fully deduct the value added by your solar energy system from your appraised property value. For instance, if your home is worth $80,000 and you install a $10,000 solar energy system, you need only pay property taxes on the $80,000 home value, even though your property is now really worth $90,000.
Some municipal governments offer net metering. Net metering is a system in which excess energy produced by your solar array is fed back into the grid, where it can be used by others. Your local electric utility pays you for the excess energy you produce. This payment typically comes in the form of a discount on your energy bill.
These programs vary in their rules and limitations. In Brenham, for instance, only systems of 10 megawatts or less are eligible. El Paso’s net metering regime only allows systems of 50 kilowatts or less (or 100 percent of your electricity consumption, whichever is less). But in San Antonio, there is no system limitation. Check with your local municipality to find out if it offers net metering.
Federal Solar Tax Credit
There are also financial incentives available at the federal level. Chief among these is the solar investment tax credit (ITC). The ITC is a federal program that allows anyone paying federal income tax to reduce their income tax liability by 30 percent of the cost of their solar system, including contractor and installation costs, wiring, inverters, racking, and other balance-of-system equipment. That means that if your system costs $10,000, the ITC would allow you to take a $3,000 discount on your taxes.
The Lone Star State is an ideal location to invest in solar energy. As a Texas resident, you benefit from a high amount of annual sunshine and below-average installation costs on solar power systems. Texas already has 2.6 GW of solar power installed, and that number is steadily increasing!
If you have more questions about the costs and opportunities associated with going solar in 2023, contact your local installer to determine whether your home is a good candidate for solar panels.