Solar Calculator for Texas: Costs, Incentives & ROI
Texas combines abundant sunshine, low average installed costs, and a deregulated retail electricity market that creates one of the most dynamic — and confusing — solar landscapes in the country. The state ranks second in the nation for installed solar capacity but does not have a statewide net-metering mandate. Instead, the value of exported electricity depends entirely on which utility serves your address and, in deregulated areas, which retail electricity provider you sign with. Most Texans live in deregulated ERCOT zones served by competitive retail providers, while customers of municipal utilities like Austin Energy and CPS Energy or rural electric cooperatives are tied to a single buyback schedule. Texas does offer one of the strongest property tax exemptions in the nation — 100 percent of the assessed value added by a residential solar installation is excluded from property tax — but the state has no personal income tax to credit, so federal incentives plus utility-level export rates do most of the economic work. Use the calculator below to estimate your specific 25-year savings based on your ZIP code, system size, electricity usage, and the buyback rate offered by your provider.
Incentive data updated: May 2026(may be outdated)
Average Solar Cost in Texas
Average installed solar costs in Texas typically run between $2.50 and $3.00 per watt for residential systems before any incentives, based on Lawrence Berkeley National Laboratory and EnergySage marketplace data. A typical 6 kW system therefore costs roughly $15,000 to $18,000 before the federal Investment Tax Credit — about 10 to 15 percent below the national average. Texas pricing benefits from a competitive installer market, lower labor costs, and faster municipal permitting in many jurisdictions. The 30 percent federal Investment Tax Credit, available through 2032 under the Inflation Reduction Act, applies to the full cost of equipment plus labor and permitting, which brings the net cost of a typical 6 kW system down to approximately $10,500 to $12,600. Texas does not have a personal state income tax, so there is no equivalent state tax credit, but the property tax exemption (described in the FAQ below) is one of the most generous in the country. Some local jurisdictions and utilities offer additional rebates: Austin Energy's Solar Photovoltaic Incentive program, CPS Energy's solar rebate, and a handful of municipally owned utilities or co-ops offer per-kilowatt or fixed-dollar incentives that can reduce the upfront cost by another $1,500 to $2,500.
- Avg. installed cost
- $2.75/W
- Typical 6 kW system
- $15,000–$18,000
Top Solar Incentives in Texas
Live incentive data not currently available for Texas. See the federal incentive guidance via our Solar Tax Credit Calculator.
Electricity Rates in Texas
Residential electricity rates in Texas vary widely by region and provider. The 2025 statewide average sits near 14 cents per kilowatt-hour according to EIA data — close to the national average — but individual customer rates range from roughly 10 cents per kWh on aggressive retail provider plans in the Houston and Dallas markets to over 16 cents on standard service from municipal utilities and co-ops. Roughly 85 percent of Texans live in deregulated ERCOT areas and choose from dozens of retail electricity providers. Several providers offer dedicated solar buyback plans, including Octopus Energy's Octopus Solar plan, Rhythm Energy, Reliant's Solar Payback, and Green Mountain. These plans typically credit exported solar at a near-1:1 retail rate during specified hours and may charge a higher rate for grid-supplied energy outside solar hours. Customers in regulated municipal territories such as Austin Energy operate under a Value-of-Solar tariff that decouples export credit from retail rate — Austin's VOS rate is set annually based on calculated grid benefits and currently runs near 9 to 10 cents per kWh. CPS Energy in San Antonio uses a net-billing structure with avoided-cost export credit. Always confirm the specific buyback schedule with your provider before sizing your system.
Peak Sun Hours in Texas
Texas averages between 4.8 and 5.8 peak sun hours per day across its climate zones, with the highest values in the western and Trans-Pecos regions and the lowest along the Gulf Coast. El Paso, Lubbock, and Midland sit on the high end at roughly 5.5 to 5.8 hours and experience some of the most consistent direct normal irradiance in the contiguous United States. The Dallas-Fort Worth metroplex averages around 5.0 to 5.3 hours, with hot summers and clear skies offset by occasional summer haze. Austin and San Antonio average roughly 5.0 to 5.2 hours. Houston and the eastern Gulf Coast average closer to 4.8 hours due to higher humidity, persistent summer cumulus cloud cover, and tropical moisture. NREL's PVWatts tool uses ZIP-code-level Typical Meteorological Year data so the production estimate from the calculator below reflects local microclimate, including coastal cloud patterns rather than just statewide averages.
Example ROI for a 6 kW System
- Estimated annual savings
- $1,450
- Payback period
- 9.5 years
- 25-year net savings
- $26,000
Run a personalized estimate with your ZIP code using the Solar ROI Calculator.
Major Cities in Texas
- Houston77002
- Dallas75201
- Austin78701
- San Antonio78205
- Fort Worth76102
Common Questions About Solar in Texas
Does Texas have a statewide net metering program?
No. Texas does not require utilities to offer net metering. Each electric utility — investor-owned, municipal, cooperative, or retail provider in deregulated ERCOT areas — sets its own export rules. In deregulated ERCOT zones (most of urban Texas including Houston, Dallas, Fort Worth, and parts of South Texas), several retail electricity providers offer optional Solar Buyback plans that credit exported energy at or near retail rates. Austin Energy uses a Value-of-Solar tariff that pays a calculated grid-benefit rate for all production rather than crediting against your bill. CPS Energy in San Antonio uses net billing with avoided-cost export credit. Rural cooperatives vary widely. The lack of a statewide mandate makes provider choice and rate-plan selection one of the largest factors in Texas solar economics — sometimes more impactful than panel selection or system size.
What property tax exemptions exist for solar in Texas?
Texas Tax Code Section 11.27 exempts 100 percent of the appraised value added by a residential solar or wind energy device from property tax assessment. This is one of the strongest property tax exemptions in the country and is automatic in the sense that any added market value attributable to the system is excluded — homeowners typically file a one-page Application for Solar or Wind-Powered Energy Device Exemption (Form 50-123) with their county appraisal district once after installation. The exemption follows the property and remains in place through ownership changes. Texas does not have a personal state income tax, so there is no state-level income tax credit for solar; the property tax exemption plus the 30 percent federal Investment Tax Credit are the primary tax-related savings.
How does ERCOT deregulation affect my solar buyback options?
ERCOT is the grid operator for roughly 90 percent of Texas electric load, and most ERCOT load is served through deregulated retail electricity providers rather than vertically integrated utilities. As a homeowner in a deregulated zone, you choose a retail provider for your account — and that choice determines your solar buyback rate. Several providers compete with dedicated solar plans (Octopus Solar, Rhythm Solar Payback, Reliant Solar Payback, Green Mountain Renewable Solar Payback, and others). These plans usually credit excess solar at a near-1:1 retail rate but may charge a higher base rate. You can switch retail providers as easily as switching cell phone carriers. Customers in non-ERCOT regions (El Paso, parts of East Texas) or municipal territories follow that utility's specific tariff and cannot shop competitively.
Will my solar system survive Texas hailstorms?
Modern residential solar panels are tested under IEC 61215 to withstand 1-inch (25 mm) hailstones traveling at terminal velocity, and many premium panels are rated to 35 mm or 45 mm. Severe Texas hailstorms — particularly in the Dallas-Fort Worth metro — occasionally exceed those thresholds, and panels can crack from baseball-sized hail. Most homeowner insurance policies cover hail damage to roof-mounted solar systems as part of the dwelling coverage; rates and deductibles vary by carrier and roof zone. Some installers offer high-impact panels with thicker tempered glass or hail-rated mounting systems that lift panels slightly above the roof plane. For Hail Belt customers, requesting impact-rated panels and confirming insurance coverage before installation is a sensible precaution. Microinverter systems also tend to fail more gracefully than string inverter systems if a small number of panels are damaged.
Are there sales tax or franchise tax exemptions for solar in Texas?
Texas does not exempt residential solar equipment from state sales tax — homeowners pay the standard 6.25 percent state rate plus any local sales tax (typically 1 to 2 percent) on equipment and labor unless the installer's contract structure shifts the tax basis. The state's franchise tax includes a 100 percent exemption for businesses that manufacture, sell, or install solar energy devices, but that exemption applies to the installer's franchise tax liability rather than reducing customer cost directly. A handful of municipal utilities (Austin Energy, CPS Energy, Garland Power & Light) and a few co-ops offer per-kilowatt rebates or low-interest solar loans that effectively reduce upfront cost. The federal 30 percent Investment Tax Credit and the property tax exemption remain the two largest tax-related savings.