In short: Texas is a great place for solar in terms of sun and relatively low installed prices, roughly $2.35–$2.60 per watt before incentives, but it works differently from most states. There is no statewide net metering, no statewide rebate and no state income tax credit. What Texas does offer is a 100% property tax exemption for the value solar adds to your home, plus local utility programs and solar buyback plans from retail electricity providers. Your payback depends heavily on how much you’re paid for exported power.
Texas utility programs, buyback rates and incentives change often. Confirm current terms with your utility and provider before you sign.
Because of Texas’s deregulated electricity market, the biggest financial decision after buying a system may be which electricity plan you choose. This guide covers what solar costs in Texas, the incentives that exist, how buyback plans work, and what to consider about the grid, heat and hail.
How solar works differently in Texas
- Deregulated ERCOT areas (most of the state): you choose a Retail Electric Provider (REP) for your electricity plan, while a separate transmission and distribution utility (TDU) such as Oncor or CenterPoint owns the wires and handles interconnection. There is no statewide net metering rule, so any payment for your exported power comes from a voluntary buyback plan that your REP offers.
- Municipal utilities and co-ops (such as Austin Energy and CPS Energy in San Antonio) aren’t part of the REP market. They set their own solar programs and export rules.
- Areas outside ERCOT, such as El Paso Electric’s territory, follow different rules.
To understand the difference between net metering and buyback-style compensation, read Net Metering vs Export Tariffs.
How much do solar panels cost in Texas?
Marketplace data suggests Texas is one of the lower-cost states for solar. Sources put typical installed prices at about $2.35–$2.60 per watt before incentives, compared with a US-wide range of roughly $2.50–$3.50. For more on how price per watt works, see How Much Do Solar Panels Cost in 2026?
| System size | Approx. panels (400 W) | Estimated installed cost in Texas |
|---|---|---|
| 6 kW | 15 | about $14,100–$15,600 |
| 8 kW | 20 | about $18,800–$20,800 |
| 10 kW | 25 | about $23,500–$26,000 |
| 12 kW | 30 | about $28,200–$31,200 |
Texas homes often use a lot of electricity for cooling, so many systems are on the larger side. Work out your own size with How Many Solar Panels Do I Need?
Solar incentives in Texas
| Incentive | Status |
|---|---|
| Federal residential tax credit (30%) | No longer available for systems bought and installed after 2025. See Federal Solar Tax Credit Changes. |
| State income tax credit | None (Texas has no state income tax). |
| Statewide rebate | None. |
| Property tax exemption | Yes. Texas exempts 100% of the added value from solar under Tax Code Section 11.27, so installing solar doesn’t raise your property taxes. To receive it, file an application (Texas Comptroller Form 50-123) with your county appraisal district; confirm the process and deadlines with them. |
| Sales tax exemption | None for residential solar, according to several sources: state and local sales tax generally applies to the equipment. Ask your installer how the contract treats materials and labor, and confirm with a tax professional. |
| Austin Energy rebate | Austin Energy raised its residential rebate from $2,500 to $4,000 per project for systems larger than 3 kW, starting July 1, 2026, according to the utility. You must complete its solar education course, use a participating contractor and get a rebate confirmation before you install. Leases and PPAs aren’t allowed in its territory. Confirm current terms and funding with Austin Energy. |
| CPS Energy (San Antonio) | The most recent information we found says the residential solar rebate was discontinued in December 2022 and hasn’t been reinstated, though older sources still mention one. Export compensation terms are also described inconsistently. Check directly with CPS Energy. |
| Other utility and battery programs | Some transmission utilities and cooperatives run battery or demand programs. Details are inconsistent across sources, so verify. |
For a deeper look at incentives across the country, see State Solar Incentives and Rebates Directory and Property Tax Exemptions for Solar Panels by State.
Solar buyback plans: Texas’s alternative to net metering
In ERCOT areas, REPs choose whether to offer solar buyback plans and what to pay. The result is a very wide range: some plans pay only a few cents per kWh, others come closer to the retail price, and rates typically change when your contract renews. Sources describe ranges from roughly 2–3 cents to close to retail.
What to compare in a buyback plan
- Buyback rate: cents per kWh for exported power, and how it compares with the price you pay.
- Type of plan: a true credit against your usage (net billing style) versus a separate lower rate for exports.
- Contract length and renewal: what happens to the rate after the term ends.
- Rollover credits: whether unused credits carry to the next month.
- Fees and minimum usage requirements: monthly charges or penalties that can erase the benefit.
- Your energy charge: a plan with a great buyback rate but an expensive import price may not be a bargain.
Compare plans available at your address on the state-sponsored PowerToChoose.org site before you install, and check whether the buyback terms will still be available after installation. If you’re in an area served by a municipal utility, you can’t choose a REP: your utility sets the terms.
Austin Energy: a different model
Austin Energy doesn’t use net metering. It credits all the energy your system produces (not just what you export) at a Value of Solar rate of about 9.91 cents per kWh, in effect since March 2023, while you’re billed for your total consumption at the standard rate. The next rate update is expected around November 2026. On top of that, it offers a rebate, which the utility raised to $4,000 per project (systems larger than 3 kW) on July 1, 2026. Program requirements, including a solar education course and completing pre-approval steps before installation, apply. Confirm the current details with Austin Energy before deciding.
Is solar worth it in Texas? An illustrative payback
Illustrative example only: an 8 kW system costing $19,800, producing about 11,600 kWh a year (about 1,450 kWh per kW), with electricity at $0.15 per kWh. Suppose 60% of production is used at home and 40% is exported.
| Buyback rate | Value of self-used power | Value of exports | Annual savings | Simple payback |
|---|---|---|---|---|
| 3 cents per kWh | $1,044 | $139 | about $1,183 | about 16.7 years |
| 10 cents per kWh | $1,044 | $464 | about $1,508 | about 13.1 years |
| 15 cents per kWh (retail match) | $1,044 | $696 | about $1,740 | about 11.4 years |
Same system, same price: the buyback plan changes payback by about five years. Texas has relatively low electricity prices compared with many states, so getting a good buyback plan, increasing your daytime use of solar power and getting a competitive price matter a lot. Electricity in Texas averages roughly 15 cents per kWh but varies widely by provider and area. Calculate your own numbers with How to Calculate Your Solar Payback Period and read Is Solar Worth It Without the Federal Tax Credit?
Grid, outages and batteries in Texas
Many Texans are interested in batteries because of outages during severe weather. Remember that a grid-tied solar system without a battery shuts down when the grid goes down (see How Does a Home Solar System Work?). A battery can provide backup power and let you use your solar power when buyback rates are low. Whether it pays off depends on your plan and outage risk: see Do You Need a Solar Battery?, Solar Batteries and Blackouts and Tesla Powerwall vs Enphase vs FranklinWH.
Texas-specific considerations
- Heat: panels lose some efficiency as they get hot. Look at the temperature coefficient when comparing panels. See Best Solar Panels for Homes.
- Hail: parts of Texas get severe hail. Panels are tested for hail impact, but large events can cause damage. Ask installers about impact ratings and check that your homeowner’s insurance covers solar equipment.
- Dust and cleaning: see How to Clean Solar Panels Safely.
- HOA rules: Texas law limits how much HOAs can restrict solar panels, but they can still set reasonable rules about placement and appearance. Check your HOA rules and the current law before installing. See HOA Rules and Your Right to Install Solar.
- Permitting and interconnection: requirements vary by city and by utility. Ask your installer how long approvals typically take in your area. See Solar Permits and Interconnection.
- Roof age and type: if your roof is near the end of its life, replace it first. See Solar Panels on Flat, Metal, Tile and Slate Roofs.
How to go solar in Texas: step by step
- Find out your electricity setup: deregulated REP area, municipal utility or co-op.
- Get 12 months of usage data and check your current rate.
- Get at least three itemized quotes. See How to Choose a Solar Installer and How to Compare Solar Quotes and Spot Red Flags.
- Look up buyback plans or your utility’s solar tariff and model your savings with real numbers.
- Check for incentives before you sign: the property tax exemption application, and, if you’re in Austin Energy territory, the rebate pre-approval steps, which must be completed before installation.
- Read your contract and financing terms carefully. See Solar Loans vs Cash vs Lease.
- After installation, switch to the electricity plan you modeled and file your property tax exemption application and any remaining rebate paperwork.
Common mistakes
- Assuming Texas has net metering like other states.
- Counting on an expensive buyback rate that changes when the contract renews.
- Assuming the federal credit still applies.
- Installing before completing pre-approval steps for a rebate.
- Ignoring the property tax exemption, which may require a filing with your appraisal district.
- Skipping hail and insurance considerations.
- Treating one national price or payback number as your own.
Next steps
- Work out your electricity setup and rate.
- Compare buyback plans or your utility’s solar rules.
- Get itemized quotes and calculate your payback.
- Check incentives with your utility and appraisal district.
Where to next:
- 🇺🇸 Solar Panels in Florida
- 🇬🇧 Smart Export Guarantee: Best Tariffs Compared
Frequently asked questions
Does Texas have net metering?
No, there is no statewide net metering requirement. In deregulated areas, retail electric providers offer voluntary solar buyback plans, and municipal utilities like Austin Energy set their own solar tariffs.
Is solar worth it in Texas in 2026?
It can be, thanks to lots of sun and relatively low installed prices, but electricity is also relatively cheap and buyback rates vary a lot. Your payback depends on your provider, how much of your solar power you use yourself and your system price.
Are there solar incentives in Texas?
Texas exempts 100% of the added property value from solar from property tax. There is no statewide rebate or state income tax credit. Austin Energy offers a rebate (raised to $4,000 per project in July 2026, according to the utility), and other utilities’ programs come and go, so check with yours.
How much do solar panels cost in Texas?
Roughly $2.35–$2.60 per watt installed before incentives, or about $18,800–$20,800 for an 8 kW system, though quotes vary by installer and equipment.
What is a solar buyback plan?
It’s a voluntary plan from a retail electric provider that pays or credits you for the excess power your system sends to the grid. Rates and terms vary widely and can change when your contract renews.
Should I get a battery in Texas?
Maybe. A battery provides backup power during outages and can help when buyback rates are low. Whether it pays off financially depends on your plan and how much you value backup power.