Guide to Going Solar with AEP in Texas

Rooftop solar in Texas has seen remarkable growth over the past five years. From 2017 to 2022, residential solar installations surged by an impressive 646%, while small-scale commercial solar installations increased by 221%.1

This is largely due to the desire of Texans and the local government to reduce energy bills, rely less on the grid, and tackle pollution issues. Regional utility companies support this, making the transition to solar energy more accessible through incentives and net meter programs. 

American Electric Power (AEP) serves a considerable portion of Texas, providing electricity to over one million customers across multiple counties across the Texas Panhandle and other areas throughout Central Texas. Notable urban areas include Harlingen, Corpus Christi, Laredo, San Angelo, and Victoria.

AEP’s solar programs provide incentives and support for both residential and commercial customers. Let’s take a look.2

Does AEP Have a Solar Program?

For residential, AEP Texas offers rebates and incentives to lower the upfront costs associated with installing rooftop solar systems, encouraging homeowners to make the switch to renewable energy. On the commercial side, AEP Texas caters to the unique needs and energy demands of businesses, including larger-scale solar installations and support throughout the planning and installation phases. 

SMART Source Solar PV Program

Under the SMART Source Solar PV program, AEP Texas offers significant rebates to homeowners and businesses who install qualified solar photovoltaic (PV) systems on their rooftops.

The process begins with an assessment phase, where a certified installer evaluates the home to determine its solar potential and the optimal system size. Once the assessment is complete and the homeowner decides to proceed, the installer handles the permitting and paperwork required to get the project approved.

We’ll cover more on this in the net metering section below. 

Who is Eligible?

Only electricity customers who receive service from AEP Texas Central Company (AEP TCC) or AEP Texas North Company (AEP TNC) are eligible to participate. A customer is defined as the entity with financial responsibility for paying the electric bill for the meter behind which the distributed solar energy equipment is to be installed. 

Other requirements include: 

  • All applications for Program funding must be submitted by an enrolled solar PV installation company.
  • You must carry liability insurance with coverage minimums.
  • Only new eligible solar photovoltaic equipment providing energy to the customer premise through an interconnection on the customer’s side of the electric meter qualifies for incentives under this Program. 
  • To be eligible to receive a full incentive payment, the estimated annual electrical energy output of a solar electric system, as modeled by the current version of PVWatts and considering an appropriate factor for shading, must be at least 1,000 kWh per kWDC installed. 
  • Arrangements with AEP Texas regarding interconnection must be made with the AEP Texas interconnection contact as soon as possible after an incentive commitment is made and prior to beginning construction of the project.

Using an Enrolled Installer

Only enrolled installers like Freedom Solar Power are eligible to apply for and receive incentives for a homeowner. For all commercial installations, work must begin after an incentive commitment has been made.

Does AEP Offer Net Metering?

Yes, the SMART Source Solar PV Program is AEP’s Distributed Renewable Generation or net metering program. After the solar PV installation is complete, the solar system is connected to the AEP Texas grid, allowing homeowners to offset their energy consumption with the electricity generated by their solar panels. Any excess energy produced is fed back into the grid, and homeowners may receive credits on their utility bills.4

In the case of AEP, they act as a transmission and distribution utility (TDU) that maintains your metering system. They handle metering each DRG customer’s electricity inflows and outflows and making those metered values available to the customer’s retail electric provider (REP) for billing purposes. While you may qualify for interconnection with AEP, a customer will still need to negotiate with their retail electric provider for the value of ‘out-flows’ or energy produced by metering and delivered to an electric utility distribution system.

Interconnection Process

Once you’ve submitted all the required documentation, paid any applicable fees, and signed your application, a technical review process will take place. AEP will conduct technical analysis and, afterward, issue the Interconnection Service Agreement (ISA).5

After you sign the ISA and make the required payment for the interconnection equipment, you’re all set. As long as there are no further modifications to your project, construction can proceed.

Following the installation, including any required upgrades or meter updates, AEP will carry out all necessary testing and commissioning. Once these steps are complete and all payments related to interconnection have been made, you will receive a Permission to Operate letter from AEP.

Is Going Solar with AEP Worth It?

Going solar with AEP Texas offers some financial benefits beyond environmental stewardship. Through AEP Texas’ SMART SourceSM Solar PV Program, both residential and commercial customers can receive incentives that make the transition to solar more financially accessible, reducing upfront costs and expediting the process of integrating solar energy into your energy mix. 

In addition to this program offered by AEP, it is important to assess your retail electric provider’s (REP) incentives, rebates, and other solar program offers that can be used in combination with the SMART SourceSM Solar PV Program.

Finding a Texas Solar Installer

Ready to take advantage of AEP Texas’ solar benefits? The best solar companies in Texas will know how to work with your utility provider to help you get the most out of Texas solar incentives.

Freedom Solar is a full-service team with in-house experts in design, permitting, installation, and customer care. We put you in control, but you don’t have to lift a finger.

Book your free consultation today