How Much Do Solar Panels Cost in Texas?

In the U.S., most households require around 17 to 21 solar panels to generate sufficient power. Considering incentives, installation costs range from $16,870 to $23,170. As of May 2023, solar panels in Texas cost an average of $2.72 per watt. A 5-kilowatt solar panel system in the state may cost between $11,560 to $15,640, with an average of $13,600. This is below the national average of around $20,498, highlighting the affordability of solar panels in Texas.

Highlights & Key Takeaways 

• The average cost of a 5-kilowatt solar panel system in Texas ranges from $11,560 to $15,640, with an average gross price of around $13,600.
• The average cost of solar panels in Texas is $2.72 per watt, below the national average of $2.95 per watt
•  The payback period for solar panels in Texas ranges from 10 to 15 years.
• Solar panels in Texas are a highly effective way to help reduce our demand on the environment and less use on the U.S. power grid.

How Much Do Solar Panels Cost in Texas?

Texas, known for its Lone Star spirit, offers a sunny opportunity for solar panel adoption. With abundant sunshine and favorable pricing, Texas residents can tap into the power of solar energy. According to EnergySage, the average cost of a 5-kilowatt solar panel system in Texas ranges from $11,560 to $15,640, with an average gross price of around $13,600. 

How Does the Current Cost of Solar in Texas Compare to the National Average?

As of May 2023, the cost of solar panels in Texas is below the national average. With an average cost of $2.72 per watt (below the national average of $2.95 per watt), a 5-kilowatt system ranges from $11,560 to $15,640, averaging $13,600. The national average, including the federal solar tax credit, is around $20,650. This makes solar panels in Texas an affordable choice for residents seeking renewable energy and electricity bill savings.

How Are Solar Costs Trending in Texas?

Solar costs in Texas are increasingly affordable and offer attractive returns on investment. With an average cost of $2.72 per watt, solar panels in Texas are cost-effective, and a 5-kilowatt system ranges from $11,560 to $15,640, averaging $13,600. This pricing is favorable compared to the national average. Solar energy in Texas provides significant long-term savings on electricity bills and is supported by federal tax credits and local rebates, enhancing its financial feasibility. The trend of solar costs in Texas is moving positively, making it a worthwhile investment.

Are Solar Panels in Texas Less Expensive Than Electricity Bills?

Texas solar panels can be cheaper than electricity bills, with residents spending approximately $1,872 annually. A 5-kilowatt system in Texas averages around $13,600 and can pay for itself within seven to ten years through electricity bill savings. Texas also provides solar incentives and tax credits, further reducing the installation cost and making solar energy a cost-effective alternative to traditional electricity bills.

How Much Money Can You Save by Going Solar in Texas?

The potential savings of going solar in Texas are influenced by the size of the solar panel system, energy consumption, and local electricity costs. However, over 20 years, you can save approximately $24,829 by installing an average-sized solar system, not including the interest you might pay on your solar panel loan.

How Long Does it Take to Pay Back Solar Panels in Texas?

The payback period for solar panels in Texas can vary based on the cost of the system, available incentives, electricity rates, and individual energy consumption. That said, based on the average cost of a 5-kilowatt solar panel system in Texas ranging between $11,560 to $15,640, with an average gross price of $13,600, it can be estimated that the payback period for solar panels in Texas could range from around 10 to 15 years.

Is It Better to Buy or Lease Solar Panels in Texas?

Financing solar panels is a popular approach for Texas homeowners ready to invest in solar. While leasing is an alternative, owning the system can provide long-term advantages for homeowners seeking to increase their home value, reduce electricity bills, and earn through net metering.

The benefits of financing solar panels in Texas include:

• Ownership - By owning their solar panel system, homeowners in Texas have full control over their energy production and savings. They can also benefit from net metering and increase the value of their homes.
• Long-term savings - While financing requires an upfront investment, the long-term savings, reduced energy bills, and protection against future price increases make it a financially prudent choice.
• Incentives - Financing a solar panel system in Texas may qualify homeowners for federal and state tax credits and other incentives. 

On the other hand, leasing solar panels in Texas offers advantages too:

• Lower upfront costs - Leasing allows homeowners to avoid the initial expenses associated with purchasing and installing a solar panel system, making it a more accessible option, especially for those with limited upfront funds.
• Maintenance and repairs - Many leasing agreements include maintenance and repair services, relieving homeowners of the burden and costs associated with system upkeep.
• Flexibility - Leasing may be a suitable choice for homeowners in Texas who plan to sell their homes in the near future. It allows them to enjoy the benefits of solar energy savings without committing to long-term investments.

What Determines the Cost of Solar Panels in Texas?

Several factors can impact the cost of solar panels in Texas. These include equipment and installation costs and any incentives offered by the state. And though information can vary, according to the Lawrence Berkeley National Laboratory, the average solar panel system in the U.S. costs $3.67 per watt, and in Texas, it is $3.77 per watt.

Size of Solar System

The size of a solar system in Texas impacts the cost of solar panels. According to Rhythm, larger systems generally have higher costs. A typical residential solar panel system in Texas ranges from 5 to 10 kilowatts, with an average of around 6 kilowatts. Installing a 5 kW to 6 kW system can save long-term utility bills for Texas homeowners. Larger systems also have a lower cost per watt, ranging from $6 to $8 when considering expenses like solar panels, components, installation labor, permits, and overhead.

On-Grid vs Off-Grid

The choice between on-grid and off-grid solar systems impacts the cost of solar panels in Texas. On-grid systems allow homeowners to benefit from net metering, selling excess energy back to the utility company, potentially resulting in financial savings. In contrast, off-grid systems require battery storage, increasing the overall cost. Off-grid systems are suitable for remote locations where connecting to the utility grid is impractical.

Solar Panel Cell Type

The type of solar cell used in a solar panel system is crucial to the cost of solar panels in Texas. The two primary types of solar cells used are monocrystalline and polycrystalline. However, other types of solar panels are also available, such as thin film solar panels, bifacial solar panels, and concentrated solar panels, each with unique characteristics and cost implications.

• Monocrystalline solar cells have a higher production cost than polycrystalline cells since they are constructed from a single, pure silicon crystal. However, their superior efficiency and durability make them a preferred choice in the solar industry.
• Polycrystalline solar cells are more cost-effective as they are made from multiple silicon crystals. Although they are generally less efficient and less durable than monocrystalline cells, they offer a more affordable option for installing solar panels.
• Thin-film solar cells employ a different technology by depositing a thin layer of photovoltaic material onto a substrate. While they are less efficient than traditional crystalline solar cells, they provide flexibility in design and application. However, their lower efficiency and limited usage make them less commonly employed in mainstream solar installations.

Brand and Quality of Solar Panel

Solar panels of higher quality typically carry a higher price tag, but they often come with extended warranties and boast superior energy production rates. EnergySage recommends reputable solar panel brands such as LG, Panasonic, and SunPower, known for their exceptional efficiency, durability, and reliability. Although these brands tend to be more expensive, they are highly regarded in the industry. It is also worth considering other brands like ADT Solar and NRG Solar, which offer reliable options in the market. 

Federal and Local Incentives

Texas homeowners who install solar panels can take advantage of several federal and local incentives. The federal solar Investment Tax Credit (ITC) offers a significant benefit, allowing homeowners to claim a tax credit equal to a percentage of their total solar panel system cost, effectively reducing their tax liability. 

Additionally, Texas offers property tax exemptions for solar installations, ensuring that homeowners are not subjected to increased property taxes due to the added value of the solar system. .

Here are just some of the local incentives that Texas homeowners can benefit from.

• TXU Energy Home Solar Buyback Plan - Texas customers with solar installations can receive compensation for the surplus energy generated by their system. Through net metering, they can accumulate credits that offset up to 100% of their energy charges on monthly utility bills. This program mirrors the net metering arrangements in other states, allowing Texas residents to reap the financial benefits of their solar production and achieve more significant energy cost savings.
• American Electric Power - Texans who receive energy from AEP (American Electric Power) can use a solar rebate program. Installing solar power systems in their homes makes them eligible for a cash incentive ranging from $2,500 to $8,500 per kilowatt (kW) installed solar power. This program provides an additional financial boost to homeowners in Texas who choose to embrace solar energy and further encourages the adoption of renewable energy sources.
• CPS Energy Solar Rebate - CPS Energy Solar Rebate offers cash incentives based on solar system size and individual circumstances, promoting solar power adoption across diverse regions and income levels.

Age, Angle, & Condition of Roof

Solar energy system efficiency is impacted by home-specific factors like roof position, age, pitch, and condition. South-facing roofs or steep slopes typically offer higher efficiency, while shade from nearby buildings or trees can decrease effectiveness. Assessing roof condition is vital, as repairs or replacements may be needed before installing solar panels. These considerations optimize performance and longevity for your specific home.

Installation Company

The labor rates charged by solar installation companies can vary significantly. When choosing a company in Texas, you can invest more in a reputable company with excellent reviews and a shorter installation timeframe. While this may involve higher upfront costs, it can provide added peace of mind, assurance of quality work, and a more efficient installation process. 

Cost of Permits

Solar panel permit costs in Texas can vary depending on location and the solar installation size. SaveOnEnergy says permit fees typically cost at least $300. Homeowners should budget for these permit costs when considering the overall expenses of their solar panel project. However, the cost may be baked into the overall installation cost you are provided.

Solar Panel Financing

Financial institutions like LightStream, Credible, SoFi, and Upgrade provide attractive options for solar panel loans. The interest rates offered for these loans are contingent upon factors such as the lender, loan size, and the borrower's credit score, typically falling within the range of 3% to 8%. It is worth noting that interest rates can go higher in some instances. 

Borrowers with excellent credit scores or those who choose shorter loan terms may qualify for lower interest rates. 

Average Solar Panel Costs in Texas

Solar panel costs in Texas are influenced by the type of solar panels used, installation costs, incentives, and permits. The average cost of solar panel installation in Texas ranges from $11,560 to $15,640, with an average of $13,600. This is below the national average of around $20,498. However, the mentioned incentives and rebates can significantly reduce the overall cost.

Average Solar Panel Cost in Texas by System Size 

The cost of solar panels in Texas varies based on the system size. A smaller 4 kW system in Texas costs around $10,880 before incentives, while a larger 10 kW system can cost approximately $27,200. The cost per watt is typically $2.72. It is important to note these costs before any incentives or rebates are factored in, which can significantly reduce the overall expense.

Average Solar Panel Cost in Texas by Type

When it comes to solar panel systems in Texas, homeowners have a choice between monocrystalline and polycrystalline panels. Monocrystalline panels, while generally pricier at approximately $200 to $315 per panel, offer higher efficiency and durability. On the other hand, polycrystalline panels are slightly more affordable. Thin-film panels provide the most budget-friendly option, with an average cost ranging from $150 to $250 per panel.

Average Solar Panel Cost per Watt in Texas

As we have shared, the average cost per watt for solar panels in Texas is $2.72. This cost per watt serves as a key metric when determining the overall expense of a solar panel system. By multiplying the cost per watt by the desired system size, homeowners in Texas can estimate the approximate total cost of their solar installation. 

Average Cost of Solar Panels Per Square Foot in Texas

Texas’s average home size is 2,031 square feet. Based on national pricing data, the average cost of solar panels per square foot for a home of this size is estimated to be between $10,500 and $12,500. 

Average Labor Cost of Solar Panel Installation in Texas

Based on information from Fixr, the average labor cost for solar panel installation in Texas is around $1.00 to $1.50 per watt. This cost includes the expenses associated with the installation process, such as site assessment, panel mounting, wiring, and system connection. 

The labor cost can vary depending on factors such as the size of the solar panel system, the complexity of the installation, and the contractor's pricing structure. For this reason, you can’t hire just any contractor to do the job. But on average, the cost to install solar panels in Texas will fall between $14,280 to $18,840, according to Fixr.

Average Cost to Run and Maintain Solar Panels in Texas

Maintaining solar panels in Texas is generally more cost-effective than conventional energy systems. While solar panels require minimal maintenance, ensuring they remain clean and debris-free is crucial. Cleaning the panels with water once or twice a year is typically sufficient. 

However, periodic professional inspections are recommended, ideally every few years or more frequently, to ensure optimal performance. The cost of a professional inspection usually ranges from $150 to $300, assuring homeowners that their solar panels are functioning at their best.

How to Calculate the Cost of Solar Panels for Your Texas Home

To estimate the cost of solar panels for your Texas home, follow these steps:

• Determine your energy usage by reviewing your electricity bills from the past year.
• Calculate the system size by dividing your average monthly usage by 30 to obtain your daily energy usage in kilowatt-hours (kWh). Then, divide this number by the hours of sunlight you receive daily in your specific location, which can be found online. The result will give you the size of the solar panel system you need in kilowatts (kW).
• Estimate the cost of the system. As a point of reference, the average cost per watt for residential solar panels in Texas is $2.72 in 2023.
• Factor in installation costs, typically ranging from $1 to $1.50 per watt, to get a more accurate estimate of the overall system cost.
• Consider tax incentives and rebates available in Texas that can help reduce the system's total cost.
• Calculate the payback period by dividing the system's total cost (including installation costs and incentives) by your estimated annual energy savings.

Tips for Getting the Best Price on Solar Panels in Texas

Research and shop for the best upfront costs on Texas solar panels. Here are a few tips to help you save money:

• Research and compare - Take the time to research and compare solar panel installation companies in Texas to find the best pricing, warranties, and equipment offered.
• Take advantage of incentives - Texas offers various incentives, such as tax credits and rebates, to help reduce the overall cost of solar panel installation.
• Consider financing options - Many solar panel installation companies in Texas provide financing options to help you spread the cost over time. Evaluate different financing options to find one that aligns with your budget.
• Purchase during the off-peak season - Consider purchasing solar panels during the off-peak season (October through May) in Texas when prices may be more competitive and lower.
• Negotiate - You can negotiate with the installation company for the best deal possible. Ask for discounts or negotiate the price to ensure you get the most value for your investment.

Are Solar Panels Worth the Cost in Texas?

The cost of solar panels is a significant consideration when investing in solar energy in Texas. However, the good news is that the cost of solar panels has decreased over time, making it a more attractive option for homeowners. If you're concerned about the upfront costs, solar panel financing can help make the investment more manageable.

Here are some key points to consider:

Pros:

• Texas enjoys ample sunlight throughout the year, making solar energy a reliable and viable option.
• Solar energy is a sustainable power source that helps reduce greenhouse gas emissions and combat climate change.
• Installing solar panels can significantly reduce electricity bills and allow you to earn credits through net metering programs, where excess energy is sent back to the grid.
• Solar panels can enhance the value of your home, making it a financially rewarding choice for homeowners - solar panels can increase the appraisal value of a house by 4.1% on average
• Texas offers various tax credits, rebates, and incentives to promote solar panel installations, further reducing the overall cost.

Cons:

• Solar panel systems require a significant upfront investment, and it may take several years to recoup the initial costs through energy savings.
• Not all roofs are suitable for solar panel installation, as they require sufficient space and optimal positioning to capture sunlight efficiently.
• Regular maintenance of solar panels is essential to ensure optimal performance, and these maintenance expenses should be factored into your budget.
• Solar panels produce less energy during cloudy or rainy weather, affecting efficiency and energy generation.
• Solar panel installation may require permits and approval from homeowners associations, adding additional costs and time to the process.

Final Word

Solar panel costs in Texas vary based on system size, panel type, and installation approach. However, solar energy has become affordable for Texas homeowners with available incentives and tax credits. To get competitive prices, gather quotes from reputable installers and consider financing options from trusted lenders.