How I Can Save You Thousands on Solar Panels in Texas

As a long-time Texas resident and solar industry analyst, I‘ve crunched the numbers and can guide you through every available option to maximize savings on a solar installation for your Lone Star State home.

In this comprehensive 2,500+ word guide, we‘ll explore:

  • Solar energy growth and cost saving projections specific to Texas
  • A breakdown of all current federal, state and local solar incentives
  • An assessment of Texas‘ booming solar outlook backed by expert market data
  • Pros and cons of solar leasing alternatives
  • Answers to the most frequently asked solar questions Texas homeowners have

Let‘s dive in!

Why Texas Is Primed for a Solar Surge

Texas makes up 10% of the entire U.S. solar market, trailing only California and Florida. In 2021 alone, roughly 4 GW of solar capacity was connected across the state—the equivalent of four nuclear power plants!

What‘s fueling this rapid growth?

For starters, Texas is America‘s #1 producer of oil and natural gas. But ironically it also has:

  • Abundant solar resources spanning over 95% of the state‘s land area
  • Retail electricity rates ($0.125/kWh average) nearly on par with solar-heavy states like California
  • Huge tracts of rural land, oil fields, and roof space ideal for solar development

These factors have allowed Texas solar farms to already produce power at under 2.1₵ per kWh—beating the operating cost of coal and natural gas generation.

And as solar costs continue rapidly declining, Texas is projected to install another 40+ GW over the next 5 years based on market economics alone—no state renewable mandate necessary.

What does this surge in utility-scale solar mean for Texas homeowners?

Simple: By locking in solar before prices rise further, you can maximize savings by offsetting high retail electricity purchases.

As we‘ll outline step-by-step below, combining Texas‘ ideal solar conditions with federal, local, and utility incentives can lead to a projected $25,000+ in energy bill savings over 25 years by going solar.

Let‘s explore those money-saving solar options…

Harvesting the (Federal Solar) Tax Credit

The recently extended federal Investment Tax Credit (ITC) remains the biggest opportunity to save on solar installation costs nation-wide.

This federal incentive allows you to deduct 26% of your entire system cost off your income tax bill.

To qualify, you must own your solar array rather than leasing from a provider. Ownership models include:

  • Direct purchase
  • Solar loans
  • PACE financing
  • Some third-party ownership agreements

Running the numbers for Texas using recent quotes, a 16 kW solar array costing $50,000 would make you eligible for a $13,000 federal tax credit.

And the solar tax credit discount gets applied BEFORE additional local rebates…

Federal Solar Tax Credit Summary

YearCredit Amount
2023 through 203226%
203322%
2034 onwardsExpires

With the tax credit covering up to 26% of costs through 2032, now is the ideal time to go solar before the incentive value dwindles.

Local Rebates to Double Down on Savings

Believe it or not, dozens of Texas cities and utilities offer their own solar incentives to residents as a way to facilitate local solar growth without statewide mandates.

These local solar programs provide everything from upfront rebates, low-interest financing, and ongoing bill credits to free workshops and solar group buys.

Let‘s explore some of the most lucrative solar rebates available in TX:

Austin Energy Rebate

Austin Energy provides a base rebate of $1,500 to local homeowners transitioning to solar power. You can also qualify for an extra performance-based incentive of $0.75 per Watt AC up to $15,000 total.

For a 5 kW system, you‘d recieve $5,625 on top of the federal tax credit!

CPS Energy Solar Rebates

The San Antonio municipal utility offers a $1,500 upfront rebate plus ongoing bill credits for homeowners that install rooftop solar panels.

CPS Energy has invested over $200 million into rooftop and community solar with plans to develop 400+ MW of local capacity. Going solar aligns perfectly with these city sustainability targets.

Solar Austin Group Purchase Discounts

If being part of a larger community initiative appeals to you, Solar Austin hosts an annual group purchase program for homeowners across the area.

By having each member‘s installation done simultaneously by a pre-vetted local company, bulk discounts around 5-15% can be passed down.

Check out upcoming group buys to save even more!

Beyond these highlighted programs, dozens more local incentives await you from El Paso to Houston. Your utility website outlines available residential solar options.

Local Incentives by Texas Utility Territory

I‘ve compiled a reference table summarizing solar incentives available from major utilities across Texas:

Utility CompanyService TerritoryLocal Solar Incentives
Austin EnergyAustinRebate up to $15,000
CPS EnergySan Antonio$1,500 upfront rebate
El Paso ElectricEl PasoNet metering
TXU EnergyNorth TexasSolar buyback program
CenterPoint EnergyHoustonNet metering
OncorDallas-Fort WorthNet metering
TNMPSouth TexasNet metering
Garland Power & LightGarlandRebate up to $2,500
Most of TexasFederal tax credit eligible

This overview table makes it easy to estimate potential combined savings in your area.

For example, a Dallas homeowner in Oncor territory could save ~$13,000 through the 26% federal tax credit plus additional long-term savings from net metering bill credits. Not bad!

Now let‘s examine why Texas is primed to continue leading solar growth…

Texas Solar Market Analysis

Texas may come as a surprise frontrunner for renewable energy adoption given its deep ties to oil and gas.

Yet the numbers speak for themselves:

  • Over 7% of Texas electricity already comes from solar power as of 2020
  • Texas accounts for 10% of total U.S. solar capacity
  • The state has added almost 10 GW of solar in the last two years alone

You‘re probably wondering how Texas achieved such scale without having an Renewable Portfolio Standard (RPS) mandate like California and other states have used to spur solar growth.

Well as it turns out, the promise of lower electricity rates and sustaining economic growth has led Texas‘ competitive power market to already blow past its meager voluntary target of 10,000 MW by 2025 set back in 1999.

With solar and wind now the cheapest sources of new generation, Texas is projected to install nearly 40 GW over the next 5 years based on economics alone. Homeowners stand to benefit through policy perks like:

  • Full sales tax exemption – no taxes on solar equipment/installation costs
  • 100% property tax exemption – no increased home valuations to raise your property taxes

And get this—this unprecedented growth is happening even as federal tax incentives decline. That‘s how strong the market factors are for Texas solar…

Ian Clover, a Wood Mackenzie solar analyst tracks these trends closely, projecting Texas to become second only to California in statewide solar capacity by 2027.

The numbers speak for themselves—if you‘re considering solar in Texas, the time is now.

Leasing as a Creative Path to Solar

If owning a solar energy system outright doesn‘t align with your finances or priorities, leasing remains a viable option to offset electricity costs.

With a $0 down solar lease, you simply pay a fixed monthly rate to a provider like Sunrun or Tesla that ties to how much power their rooftop system produces. Typical lease terms last 15-25 years.

While you miss out on tax credits and rebates, the lease provider claims them and passes down some savings in the form of low monthly payments. These payments tend to be 10-30% cheaper than your current monthly energy bill from year one.

At the end of the term after 15-25 years, you‘ll usually have the option to extend the lease, upgrade your system size, or have the provider remove everything from your roof free of charge based on what makes the most sense then.

While leasing isn‘t ideal financially compared to owning over the system‘s 25+ year lifespan, it serves as a fitting "try before you buy" option.

Over 10-15 years, you may save enough money to purchase an expanded system to power future needs like an electric vehicle. Going solar isn‘t just a one-time decision—it‘s step one in an evolving energy strategy.

Key Takeaways: Maximize Texas Solar Savings

After reviewing the growth trends, incentives, and projections backing rooftop solar in Texas, the case for locking in energy bill savings speaks for itself:

Install solar before federal tax credit drops – 26% discount through 2032
Stack local utility/city rebates – from $1,500 up to $15,000
Access net metering – sell your excess power to the grid
Projected 25-year savings over $25,000 – system pays for itself in 9-11 years

Check your eligibility for subsidies and request quotes from 3-5 installers to maximize savings in your area.

While incentives bring down the net system cost considerably, solar panels are still a major investment. But given their 25+ year lifespan and increasing retail electricity rates, going solar serves as an inflation-proof asset that pays you back through recurring energy bill savings.

And in Texas‘ thriving solar landscape, the numbers will only get better over time. So let the sun bring you long-term energy savings!

Still have questions? Contact me anytime in the comments section below.

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