Asking how much solar panels cost in Texas is like asking how much a car costs; the answer varies widely based on numerous variables. Just as different car models, features, and brands can significantly impact price, the costs of solar panels are influenced by system size, technology type, and installation complexities!
Factors such as personal energy needs, geographic location, and available incentives further complicate the estimation, making it essential to consider all these elements before arriving at a final figure — and a system that hits the sweet spot of meeting your energy needs and your bottom line.
What Affects the Cost of Solar Panels in Texas?
Energy Needs
This is the big one. Submitting recent utility bills to your solar installer will help them calculate your needs based on energy consumption patterns. Factors such as household size, usage habits, and energy-efficient appliances all contribute to energy needs. A thorough energy audit can help pinpoint requirements and guide the selection of an optimal solar system.
This is an excellent way of determining the appropriate system size to achieve maximum efficiency – also known as getting the biggest bang for your buck!
System Size
After your needs are factored in – you’ll move on to sizing your system which is the bulk of a solar installation budget. The total capacity, or wattage, of the solar panel system needed to meet energy demands directly affects the cost.
Larger systems typically cost more, but they often provide greater savings on energy bills in the long run. Sizing a system accurately requires an analysis of current energy consumption and future needs, including potential electric vehicle charging or home expansion.
The average Texas homeowner needs around a 13.35 kW solar panel system to cover their electricity needs – but that may not be your goal.1
Type of Solar Panels
The cost of solar panels in Texas can vary greatly depending on the wattage needed and whether special specifications or a certain type of technology are required. Each type of solar panel material has distinct advantages and disadvantages, and the choice often depends on individual energy needs, budget, and available installation space.
Solar panels are primarily made from three types of materials:
- Monocrystalline Silicon: These panels are crafted from a single crystal structure of silicon, making them highly efficient and space-saving. They typically have the highest efficiency rates, which means they can generate more electricity per square foot compared to other types. They are generally the most expensive but return the investment in efficiency and durability.
- Polycrystalline Silicon: Made from multiple silicon crystals melted together, polycrystalline panels offer a slightly lower efficiency than monocrystalline panels but are generally less expensive to produce. They have a distinctive bluish hue and tend to be a popular choice for those seeking a balance between cost and performance.
- Thin Film Solar Panels: These panels are created by layering photovoltaic materials onto a substrate like glass, plastic, or metal. Thin film panels are lightweight and flexible, allowing for a variety of applications. They are typically less expensive but offer less efficiency.
Installation Complexity
Factors such as roof type, pitch, and accessibility can influence installation labor costs. A flat roof may allow for easier installation compared to a steeply pitched or complex roof structure. Additionally, if the installation site requires special equipment or extensive mounting systems, this can be reflected in the budget.
Utilizing Incentives & Rebates in Texas
The good news about just about any type of solar panel you choose? State incentives, federal tax credits, and local utility rebates can reduce out-of-pocket costs!
Texas State Rebates and Incentives
Texas solar incentives are robust compared to many other states. Texas attracts many emerging industries to call the state home, from data centers to leisure and hospitality. All of these are welcome but do increase grid demands. Incentivizing homeowners to adopt rooftop solar helps take pressure off the grid during peak hours – a win for the state of Texas and for homeowner’s wallets.
Some of the most generous statewide rebates include a property tax and net metering programs.
Renewable Energy Systems Property Tax Exemption
This exemption allows homeowners to avoid paying property taxes on the increase in their property’s value due to the installation of a solar energy system – makes sense and cents!
The exemption is equal to 100% of a home’s property tax value, which includes the assessed value of the solar power system.
For instance, if a property owner in Austin has a home valued at $450,000 and installs a $25,000 solar panel system, their property taxes would continue to be calculated based on the original value of $450,000 rather than the increased value of $475,000. This tax exemption ensures that homeowners can reap the benefits of renewable energy without additional tax burdens.2
Texas Net Metering
Net metering is a solar buyback program that credits homeowners for any excess energy their solar panels produce and send back to the grid. In Texas, these credits can then be applied to future energy bills, effectively allowing solar users to offset their electricity costs.
While Texas does not maintain a statewide net metering policy, numerous retail electric providers offer their own solar buyback plans. Some municipal power companies, such as Austin Energy, also provide this valuable benefit to their customers.
Given that these net metering programs are overseen by various electric companies across the state, the technical requirements and compensation rates can differ significantly – however, Freedom Solar Power can walk you through regional programs and requirements.
Local Utilities Incentives
The state of Texas has numerous local utility incentives and rebates that run the gamut from Austin Energy’s generous flat $2,500 post-installation rebate for those who go solar to Denton Municipal Electric’s solar rebate that varies between $0.40 and $0.80 per watt, depending on the system size, up to $30,000.
American Electric Power (AEP) offers a fixed-tiered rebate structure with a value of $1,500 for systems below 5 kW (with a minimum size of 3kW), $2,250 for systems that are at least 5 kW but less than 7.5 kW, and $3,000 for systems that are 7.5 kW or larger and Farmers Electric Cooperative, which serves almost 50,000 members across 12 counties in North Texas, offers a $500 rebate for renewable energy distributed generation systems up to 50 kW in size.
For a full list of local Texas solar incentives, visit our comprehensive guide to Texas Solar Rebates and Incentives.
Federal Rebates
A major incentive for Texas homeowners considering solar panel installation is the Federal Solar Investment Tax Credit (ITC), which provides financial support for the purchase and installation of solar systems across the United States.
Initially set to end in 2023, the ITC was extended by the Inflation Reduction Act to promote the adoption of residential solar energy all over the country, which certainly makes solar energy more appealing in Texas.
Through 2032, homeowners can benefit from a 30% tax credit based on the cost of their solar panel systems, significantly lowering their tax burden. This credit will decrease to 26% in 2033 and to 22% in 2034. Another reason why there is no better time than now to go solar!
Partner with the Best Solar Installer in Texas to Help You Save
Whether you’re seeking a small residential solar PV installation to satisfy your family’s energy requirements or aiming to position your Fortune 500 company as a leader in sustainability through a large-scale commercial solar setup, Freedom Solar Power is here to help you achieve your goals.
Live more powerfully. Book a free consultation today.
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