If you're a homeowner in Texas you may be considering installing solar panels for your home. The Lone Star State is ideal for solar panels because it receives some of the strongest sunshine in the country. In fact, Texas ranks #2 in the nation for solar power with more than 75,000 installations and enough solar power to power 642,199 homes, according to the Solar Energy Industries Association (SEIA).
How much do solar panels cost in Texas?
As of February 2022, the average cost of solar panels in Texas is $2.69 per watt and the average cost of solar panel installation can range anywhere from $11,432 to $15,468, according to Energy Sage.
If you live in Texas and you're curious about installing solar panels, there are a few factors to consider that will impact the cost. Some of these include:
The average utility cost and energy usage of your home
The size and layout of your roof
Your rooftop's exposure to light and how much sun it is exposed to yearly
Local and federal solar incentives and rebates
Solar panel costs in your area
Solar panel installation cost near you
How many solar panels do I need?
To determine how many solar panels you'll need for your home, you'll have to understand how much electricity you use. You can calculate this number by looking at old electricity bills. To give you a general idea, below are some examples of how much electricity will generate from differing solar panel systems sizes.
For smaller homes, a 3 kWh solar panel system will generate around 3,600 to 4,800 kWh per year.
For medium-sized homes, a 5 kWh solar system will produce roughly 6,000 to 8,000 kWh per year.
For larger homes, a 10 kWh solar panel system can generate between 12,000 to 16,000 kWh per year.
Solar panel system size
According to The U.S. Energy Information Administration, the average home in Texas uses 1,176 kWh a month or 14,112 kWh per year.
Your average Texas home could install a 5 kW to 6kW solar panel system, which will help reduce utility bills in long-run. It's important to note that the bigger the solar panel system you install, the lower the cost per watt will be. When you consider the cost of solar panels, parts, labor, permits, and overhead, your cost per watt may fall between $6 and $8.
Solar panel financing
Once you've decided that installing solar panels is a worthwhile investment for your home, it's time to start thinking about financing. The overall cost of your solar panel system will depend on how you choose to finance it. There are a few different financing options for solar installation in Texas, including:
Pay cash. This is the most economical way to buy solar panels. With a long-term return on investment, paying cash upfront will give you the lowest overall cost.
Take out a solar loan. This will let you buy the solar panel system outright. You will have to make monthly payments to repay the loan. The average payback period for a solar loan is around 10 years.
Sign a solar lease. Also called a power purchase agreement (PPA), a solar lease allows you to rent solar panels from a third-party company. Keep in mind that solar leases are not eligible for the federal tax credit.
Federal solar tax credit
One of the most important solar incentives is the federal solar tax credit program, which started in 2016. Originally the government offered a 30% return in tax credits on solar installations, however that number has gone down to 22% today (which is still very good).
Texas offers a property tax exemption for the increase in property value that comes when you install solar panels on your home. In most cases, a Texas solar installation will add 4.25% to your home's value.
Are solar panels worth it in Texas?
Yes. This comes as no surprise, as Texas has been one of the top 10 solar states since 2017. Thanks to new solar initiatives the cost to install solar panels is dropping nationally year over year, according to the Department of Energy.
What are some of the best Texas cities for solar?
On average, Texas sees 234 sunny days a year which is roughly 29 days more than the national average. Below is a breakdown of some top cities in Texas and how many hours of sunshine each city sees per day.
Houston - 5.9 hours per day
Austin - 6.7 hours per day
Corpus Christi - 6.2 hours per day
Lubbock - 7.5 hours per day
Dallas Ft. Worth - 6.9 hours per day
Advantages of solar panels in Texas
There are numerous reasons to invest in solar panels for your Texas home. Let's take a look at some of the biggest advantages below.
Solar panels help you lower energy costs. If you're looking for a way to reduce your monthly electricity bill, solar panels can help. According to an article from Save on Energy, Texas residents who install solar panels can save up to $960 in energy costs annually.
Solar panels can help increase the value of your home. Whether you're thinking about selling your home next month or next year, installing solar panels is a great way to increase the resale value of your home. A study by Lawrence Berkeley National Library found that a solar system increases the value of a home by an average of $15,000.
Solar panels are a green source of electricity. Utilizing solar power reduces your carbon footprint because it generates energy using the power of the sun.
Solar panels will help you avoid surprises in your electricity bills. Each year, electricity prices may rise. By investing in a solar energy system, you essentially lock-in the price you pay for electricity today to avoid future increases in electricity costs.
Solar panels have a great return on investment. The average American solar purchaser sees a 20% or more return on investment over the course of their decades-long lifetime.
Solar Buyback Plans in Texas
At Rhythm, we're proud to offer Texans a solar buyback plan that can help you make money and save money. If you have already invested in solar panel installation, this plan is really a no-brainer.