Are Solar Panels Worth It In Texas?

With the cost of solar panels ranging between $235,000 and $35,000 but the fifth-highest demand for energy in the entire country. This huge expense raises the question for many Texas homeowners: Are solar panels worth it in Texas? This article will delve into the price of solar panels in Texas, available incentives, and why installing solar panels in Texas is worthwhile. We will also discuss situations where installing solar panels in Texas might not be suitable.

How to Determine If Solar Panels are Worth It In Texas?

Texas is one of the fastest-growing states in the U.S. for solar energy capacity. As of 2023, it ranks second in the nation for installed solar capacity, following California. However it doesn’t mean that solar panel installation is right for every Texas resident. Before installing solar panels, every resident should think clearly, are solar panels worth it in their home? Here are some factors that need to be considered.

Your Home’s Energy Consumption

Calculate your household's daily electricity needs to determine whether and how large solar panels you need. Generally speaking, households that use less than 500 kWh of electricity per month do not need to install solar panels because the cost cannot be recovered.

Solar Panel costs in Texas

As of June 2024,  the average cost of solar panels in Texas, including installation, is around $2.33 per watt. For a typical 5 kW system, this totals about $11,672 before any incentives, with prices generally ranging from $9,921 to $13,423. After applying the federal tax credit, the average price decreases by 30%.

Payback Period in Texas

The time it takes for your solar panels to pay for themselves is known as the payback period. As your monthly energy bills decrease, you'll eventually save enough to cover the system's cost. After that, your savings will start adding up much faster. The payback period for solar panels in Texas typically ranges from 6 to 8 years. After this period, the savings on your electricity bills are essentially profit.

Location

Texas receives abundant sunshine throughout the year, particularly in the western and southern regions. This high solar insolation means more sunlight is available to convert into electricity. But the Lone Star State also is prone to extreme weather events, such as hail storms and hurricanes, which can potentially damage solar panels. So please take your location into consideration when deciding if to install solar panels.

Your roof’s condition

The more direct sunlight your roof receives, the more electricity your solar panels can generate. In Texas, most places don’t need to worry about the sunlight if there is enough. However, there are some individual factors you need to consider as well.

• South-facing roofs are generally the best for solar panels in the Northern Hemisphere because they receive the most sunlight throughout the day. East and west-facing roofs can also work but may produce less energy.
• The angle of your roof also can affect the efficiency of your solar panels. The optimal angle often corresponds to the latitude of your location. In Texas, a tilt angle between 20-30 degrees is typically effective.
• Trees, chimneys, neighboring buildings, and other obstructions can cast shadows on your roof, reducing the efficiency of your solar panels.
• Ensure there is enough space on your roof to install a sufficient number of solar panels to meet your energy needs.

Pros and Cons of Going Solar in Texas

Should I get solar panels in Texas? In order to answer this question, you have to know the pros and cons of going solar in Texas.

Pros of Going Solar in Texas?

Cost Reduction

Turning to solar energy for electricity supply helps you save money on electricity bills as it's far cheaper to generate power with solar panels. You can save as much as $2000 by embracing this power option. 

Home Resale Value Increase

Research from LBL indicates that homes with solar energy systems tend to sell for a premium compared to non-solar homes. The exact premium can range from approximately $3 to $4 per watt of installed solar capacity, depending on various factors. According to Zillow, the average home value in Texas is $296,127, and when you add a full solar system to your home, your home value typically adds about $12,141.

Renewable Energy Source

Solar energy is clean and renewable energy. Texas is becoming known for emitting so much carbon into the atmosphere via fossil fuels. However, every home that utilizes solar panels for power generation in Texas helps reduce carbon pollution, making the environment safer. 

No More Power Outages

Going through a power outage is not a pleasant experience. Using solar panels to generate electricity makes the power supply constant in your home or office, and power outages again become a part of your past.

There are more benefits of solar energy we haven’t listed out but you can check this article 5 Benefits Of Solar Energy To The Environment And You for more.

Cons of Going Solar in Texas?

But on a closer look, is solar worth it in Texas? Despite their attractive benefits, some problems are associated with solar panels in Texas.

That makes the renewable energy resource only appropriate for some homes. 

Some Homes May Not Qualify

Despite being one of the US states blessed with so much sunlight, some Texas regions don't get enough of it. 

Northern Texas is one region deprived of an adequate amount of sunlight. Hence, homes n these regions may only partially benefit from generating their power, unlike those in the southern parts of Texas. 

Also, homes that are not properly positioned won't meet the requirements for solar installation in Texas, preventing them from enjoying the full benefits of solar panels.

High Initial Cost

Over the years, there has been a remarkable reduction in the cost of acquiring solar panels in Texas. Installing solar panels in Texas costs between $11,000 and $ 15,000, which is still not affordable for most homes.

Long Payback Period

It takes about twelve years for most homeowners and business owners to pay off the installation cost of their solar panels. Since this period seems like forever to most property owners, many property owners are discouraged and wonder if solar panels are worth it in Texas.

Maintenance Cost

Some people find solar panels quite expensive to inspect and maintain regularly. This cost ranges between $300 and $700 for a 2kW system comprising ten panels. That adds to the burden of occasional replacements.

Solar Panel Incentives in Texas

1. Federal Tax Incentive

Under the 2022 federal solar tax credit, also known as Investment Tax Credit (ITC), homeowners who generate their power supply via solar panels can claim a 26% credit refund of their installation costs after one year. 

More incentives await those who plan to install their panels in 2023, as they can claim 23% of installation costs. Best of all, this incentive is open to old and new homeowners. Learn more in another blog Everything You Need To Know About Solar Tax Credit. 

2. Tax Exemptions on Property

Residents who have solar panels installed on their properties are entitled to tax exemptions to the tune of the assessed value of their solar systems. This tax exemption is available to residential and commercial property owners, not minding if their properties are new or old. The exemption covers the cost of the solar panels and installation. 

3. Net Metering

Net metering is a beneficial solar incentive offered by some states of the US, including Texas. Net metering is a billing plan offered by electricity providers to their utility customers. The billing plan allows customers who generate electricity using solar panels to receive compensation for their excess power. Such customers will receive a credit on their utility bills instead of a debit. With this incentive, deserving customers can pay for their future power consumption. 

4. Texas Local Solar Panel Rebates

Local governments offer several solar energy system incentives in Texas. They include: 

- A $2,500 rebate and its worth in solar tariff provided by Austin Energy 

- A rebate of $2,500 for every solar panel project on a residential property. It also includes a $500 premium for installations that use local modules. 

- $0.60 and $0.40 thereafter for every AC Watt consumed by commercial properties for the first 25kW. That is in addition to a $0.10 premium for projects that utilize local modules in their solar panel installations.

5. AEP Texas Incentive 

- For commercial properties, AEP incentives range from $0.25 to $0.50, depending on the amount of renewable energy produced.  

- Residential property owners can get up to $0.5 per Wdc for less than 3 kWdc of solar energy produced and between $1,500 and $3,000 for renewable energy production ranging from 4.999-30 kWdc. 

6. For solar panel users in Houston and Dallas, providers also offer rebates and buyback programs. That is possible because there's no regulated market in these cities, making it possible for consumers to make their preferred choice from numerous providers available. 

Things to Consider When Installing Solar Panels in Texas

It would help if you considered the following before installing solar panels in Texas:

Solar Rights Law in Texas: there's no law banning solar installations in Texas. That means you won't be breaking any law if you do.

Your Roof Condition: inspect to see if your roof needs repairs or replacement before installing solar panels on it.

Your Roof Shape: check with your solar panel installer to see if the shape of your roof is appropriate for solar panel installation. Also, check if your roof surface has enough room to hold the panels.

The Direction of Your Roof Slope: Most professional solar installers prefer installing on roofs facing south as that will maximize the sunlight needed for energy production. So be sure your roof meets that specification before investing in solar installation.

How Much Weight Your Roof Can Handle: Be sure your roof is strong enough to bear the weight of the solar panels before proceeding with the installation.

Available Solar Company: You must contact only reputable, professional firms to install your solar panels. That's the only way you can get value for your installation costs.

Are Solar Panels Worth It In Texas?

Overall, the benefits of installing solar panels in Texas outweigh the disadvantages. To determine whether your home could benefit from solar panels, you should consider your monthly energy consumption and utility bills, the amount of sunlight your location receives, the orientation of your roof, and your available funds. For most homes in Texas, it is worth installing solar panels.

FAQ

How long does it take for solar panels to pay for themselves in Texas?

In Texas, it takes an average of twelve years for property owners to pay back their solar panel costs. They can start enjoying profits from their investments afterward.

Do Solar Panels Increase Home Value In Texas?

Yes, the value of your home increases in Texas when you install a solar system. People buying new homes prefer to go for homes with solar panels. Real estate studies show that homes with solar panels have 10% more value than those that don't have them.

Is Texas A Solar-Friendly State?

Yes, Texas is very conducive and efficient for solar energy generation. The state is blessed with enough sunshine to produce all the electricity you require for your home or business needs. Also, several utility companies in Texas have local solar rebate offers for their customers, from which you can benefit.