Solar Panel Cost in Texas (2026 Estimate)

BySunMetricLab Editorial Team·Independent solar research and calculators

Data last updated September 10, 2026 · ranks #10 of 50 states for modeled payback

Texas averages about 5.3 peak sun hours a day (about average for the US) with an approximate residential electricity rate near 15¢/kWh, in the mid-range nationally. In the model used here, an 8 kW system in Texas produces roughly 12,380 kWh a year and trims about $1,900 off annual electricity costs, paying back its net cost in about 8.1 years. Strong sun, high electricity prices, or both put Texas among the faster paybacks in this comparison, and solar tends to make financial sense here for homeowners with suitable roofs.

Want the full picture beyond the numbers? Read the guide Home Solar in Texas: Making Sense of a Deregulated Grid.

Estimated system cost and payback in Texas

Costs assume roughly $2.70/watt installed for Texas; the net column applies a 30% federal credit for comparison with quotes that include it. Savings and payback use the state's sun hours and rate above.

The 30% federal Residential Clean Energy Credit ended for systems paid for after December 31, 2025 under the 2025 federal budget law. Net-after-credit figures apply only if you still qualify (for example a 2025 expenditure, or a leased system where the installer passes a credit through). Confirm with a tax professional.

What moves the numbers in Texas

Two inputs drive most of the difference between states: how much sun a system sees and what each offset kilowatt-hour is worth. Texas's 5.3 sun hours set production, and its roughly 15¢/kWh rate sets what that production saves. The bigger unknowns are your roof, shading, and how your utility compensates exported power, since a lower export rate can pull real savings below the retail-rate figure above.

Net metering and export credits in Texas

Texas leaves solar export compensation entirely to individual utilities and retailers, so there is no statewide net metering law. In the deregulated ERCOT market, which covers Dallas, Houston, and most of the state, you choose a retail electric provider and can pick a solar buyback plan from companies such as Reliant, TXU, Green Mountain Energy, Octopus Energy, or Rhythm. Some plans credit exports at your full energy rate, some pay a wholesale-linked rate, and many limit credits to what you consume in a month or let them expire at the end of the contract.

Outside the competitive market, municipal utilities and co-ops set their own rules. Austin Energy uses a Value of Solar tariff that pays for every kilowatt-hour you generate at a fixed rate while billing your full consumption at standard rates, and CPS Energy in San Antonio has used retail-based crediting that it has been reviewing. Cooperatives such as Pedernales and CoServ each publish their own tariffs, while El Paso Electric and Entergy Texas operate under regulated buyback terms overseen by the Public Utility Commission.

Texas solar incentives beyond the federal credit

The state has no personal income tax, which rules out a state credit, but Texas does exempt the value a solar system adds to your home from property tax under Section 11.27 of the Tax Code, which requires filing a form with the appraisal district. The Texas solar rights law limits how far homeowners associations can restrict rooftop panels, which matters in the many deed-restricted neighborhoods around the big metros.

Utility rebates have historically done much of the work here: Austin Energy still offered a residential solar rebate tied to completing its solar education course as of 2026, CPS Energy ran rebate rounds for years before scaling them back, and Oncor funded installer-administered incentives in its territory that have been reduced over time. Funding for these programs is set annually and often runs out mid-year, so confirm availability before you rely on it.

Utilities and rate plans in Texas

In ERCOT, the wires companies that own the poles and meters are Oncor in North Texas, CenterPoint in Houston, AEP Texas along the coast and in the south, and Texas-New Mexico Power in scattered areas; your retail provider is a separate company that sets the energy price. Austin Energy and CPS Energy are large municipal utilities, and cooperatives like Pedernales Electric are among the biggest in the country. Entergy Texas, El Paso Electric, SWEPCO, and Xcel's Southwestern Public Service sit outside ERCOT and are fully regulated. Delivery charges from the wires company are billed per kilowatt-hour you import and are not offset by exports, and free-nights or time-of-use plans can either help or hurt solar depending on your usage.