Solar in Texas: market, incentives and the net-metering reality

Market snapshot

Solar in Texas by the numbers

Installed capacity

33,500 MW

Homes powered

3,800K

Solar share of electricity

10%

Solar jobs in state

15,000

Typical cost per watt

$2.60

US ranking

#2

Texas's growth has been dominated by utility-scale solar (over 85 percent of installed MW is utility-scale) with residential and commercial lagging compared to the state's size. That gap is also an opportunity: residential solar penetration in Texas is below 2 percent of households, versus 10 percent in California, in a market with excellent sun hours and some of the lowest hardware and labour costs in the country.

Rates and net metering

Electric rates and how solar export is credited

Incentives

State and local solar incentives in Texas

Beyond the 30 percent federal Residential Clean Energy Credit, which applies in every US state through 2032, Texas has these state and local programmes.

Austin Energy Residential Solar Rebate

Austin Energy customers can receive a rebate per watt installed, plus a value-of-solar tariff rate for exports that is often higher than retail. Austin's programme has been one of the strongest municipal solar incentives in the US.

CPS Energy Solar Rebate (San Antonio)

CPS Energy offers a per-watt rebate for residential solar installations in its San Antonio service area, with bonus amounts for using locally-manufactured modules. Programme funding is capped annually.

Property-tax exemption for solar

Texas excludes 100 percent of the added value of a solar system from property-tax assessment under the Solar and Wind-Powered Energy Device Exemption. No application required beyond a one-time filing.

Local municipal rebates (varies)

A handful of Texas municipalities and co-ops offer additional rebates (Guadalupe Valley Electric Co-op, Pedernales Electric Co-op, El Paso Electric). The list changes often; check with the local utility before quoting.

Permits and interconnection

Permits and interconnection

Permit timelines vary dramatically by jurisdiction. Houston and Dallas commonly take 2 to 6 weeks for residential permits; Austin and San Antonio are faster. SolarAPP+ adoption is spotty in Texas (unlike California's near-mandate), so a single installer often works across jurisdictions with very different speed and documentation requirements. Interconnection with Oncor and CenterPoint usually runs 2 to 4 weeks post-install.

Running a solar company here

Running a solar company in Texas

Running a solar company in Texas means operating in a deregulated electricity market where the customer's choice of retail electric provider affects the solar sale as much as system size. The deals that work best are typically on an REP with a solar buy-back plan; the installer who adds REP shopping advice to the proposal closes more than the installer who sells panels in isolation. Cost per lead on Google Search is substantially cheaper than California (typically $75 to $150 for residential) and the market is less saturated, which is why many national installers have expanded into Texas aggressively in the last three years.

Questions people ask

Solar in Texas: FAQ

Does Texas have net metering?

No, not statewide. Within the deregulated ERCOT market, solar export compensation depends on the customer's retail electric provider. Several REPs (Rhythm, Reliant, Chariot, Octopus) offer solar buy-back plans that credit exports at retail or near-retail rates; others credit at wholesale. Municipal utilities (Austin Energy, CPS Energy) have their own value-of-solar tariffs.

What is the best REP for solar in Texas?

The right REP depends on system size, consumption pattern and location, but Rhythm, Chariot and Reliant are commonly cited for their solar buy-back plans. The best approach is to run the customer's annual usage against several solar plans before installation and pick the REP that gives the highest effective credit for their expected export pattern.

How much does solar cost in Texas?

Residential solar in Texas averages around $2.60 per watt installed, meaning a typical 8 kW system costs about $21,000 gross. After the 30 percent federal tax credit, net cost is around $14,500. Texas has some of the lowest residential solar prices in the US because labour and permit costs are lower than coastal states.

Does Texas have a state solar tax credit?

No. Texas has no state income tax, so a state-level tax credit for solar is not available. The main state-level benefit is the property-tax exemption, which excludes the solar system's added value from assessment. The 30 percent federal Residential Clean Energy Credit still applies.

How many solar companies are in Texas?

Roughly 500 to 700 licensed solar installers operate in Texas, concentrated in the Dallas-Fort Worth, Houston, Austin and San Antonio metros. The market is less consolidated than California: the top 10 companies install around 40 percent of residential volume, with the rest spread across smaller regional and local installers.