Home Solar in Texas: 2026 Costs, Incentives & Savings

Solar in Texas

Texas electricity prices rose 28% from 2020 to 2024 — making it harder to ignore what you’re spending just to keep the lights on. For many Texas homeowners, solar installation has become a practical way to take back control of their energy costs, and with flexible options that require no upfront cost, it’s more accessible than ever.

Whether you’re just starting to explore your options or ready to take the next step, this guide from the team at Palmetto covers everything you need to know about solar panels for your home in Texas — from how the installation process works to what it actually costs.

TEXAS by the Numbers

7th Most residential solar in the United States
122k Households have installed solar panels
5.4 Average daily peak sun hours
~$72k Texas average savings over 25 years

Texas Solar Panel Cost

Curious what solar actually costs in Texas? This calculator uses real installation data from Palmetto customers across the state — from Houston and Dallas to San Antonio and Austin — to give you a local, accurate estimate. See your monthly lease payment through our LightReach program (no upfront cost required) or explore a cash purchase option side by side.

Lease Cash Purchase

System Size
This system size is designed to offset approximately 100% of the average electricity usage for a home in Texas.

Recommended System

8.91 kW
Typical for your home size in TX

Your Monthly Payment
Estimated monthly cost with LightReach
$114/mo

Why Lease Solar?

Following the 2025 Big Beautiful Bill, the federal 30% solar tax credit is no longer available for cash purchases. With a LightReach lease, Palmetto owns the system and still qualifies for the commercial ITC — passing those savings through to you via lower monthly payments.

• No upfront investment
• Palmetto handles all maintenance
• 90% Production Guarantee
• Comprehensive protection program included

Cost Breakdown

Your estimated investment

• System Cost: $25,222
• Cost Per Watt: $2.83/W
• Final Cost: $25,222

Savings

• Monthly Savings: Average utility bill reduction
  $164
• Payback Period: Break-even point
  11.0 years
• 25-Year Savings: $72,119
  Get Your Personalized Quote

Palmetto Reviews

Palmetto is top notch. I worked with a solar broker, someone who finds the very best at the best price. My broker chose Palmetto to handle and coordinate the install and activation and monitoring of my panels. I could not be more pleased with the people who installed my panels. They did an excellent and quality job. Also, Palmetto did an incredible job at coordinating all of the inspections, certificate, activation, and everything else. I would recommend Palmetto to anyone anywhere. Also, their customer service is prompt, responsive, courteous, and professional.

Kathy Platt
Cross Roads, Texas

Overall great experience with Palmetto right from 1st contact till the panels are activated. I was informed on each and every step in advance, pricing is great, install crew was amazing. During inspection one small issue was observed and crew came and fix it asap without need for further follow-ups.

Ashish Gupta
Mckinney, Texas

I have had nothing but a positive experience with Palmetto. Any questions I had or concerns were addressed quickly. As a customer, it falls on me to research and verify information. My salesman, Josh, has been a major factor in why I proceeded with Palmetto. Installation was done in a day and the inspector assured me the crew had done an excellent job. I highly recommend Palmetto!

Angela W
Dallas, Texas

Key Takeaways

• Texas electricity prices rose 28% from 2020 to 2024 — making solar a practical way to take back control of your monthly energy costs.
• You can go solar in Texas with no upfront cost through Palmetto’s LightReach lease — one low monthly payment, and we handle all maintenance.
• Texas offers strong solar incentives including a 100% property tax exemption and sales tax exemption on solar equipment, saving homeowners thousands.

Texas Electricity Prices

Texas electricity prices have been climbing steadily — and for many homeowners, the monthly bill has become impossible to ignore.

From 2021 to 2024, the average residential electricity rate in Texas rose from 12.1¢ to 14.9¢ per kWh — an increase of roughly 23%. That adds up fast, especially during long Texas summers when air conditioning runs around the clock.

Solar panels give homeowners a way to generate their own electricity and reduce dependence on the grid. The more energy your system produces, the less you rely on utility rates that are largely outside your control.

Through Palmetto’s LightReach program, you can go solar with no upfront cost. You pay a low fixed monthly rate, Palmetto owns and maintains the system, and you’re no longer at the mercy of rising utility prices.

Price of Energy: Texas vs National Average

Source: US Bureau of Labor Statistics, Energy Information Administration, Form 861

Texas Area Utility Providers

Texas is served by several major utility providers. Based on 2023 data — the most recent available — Texas electricity rates range from 11.1¢ (Bluebonnet Electric) to 14.7¢ (Xcel Energy) per kWh, varying by provider.

Texas Electricity Rates

Source: US Energy Information Administration, 2023, Form 861, Table 6

Texas Solar Incentives

Texas homeowners have access to a strong set of solar incentives in Texas — including statewide tax exemptions and utility rebates that vary by location.

Texas Property Tax Exemption for Solar Energy Systems

Under Texas Tax Code Section 11.27, the added value that a solar energy system contributes to your home is 100% exempt from property taxes. For example, if your solar installation increases your home’s appraised value by $20,000, you pay zero additional property taxes on that amount. With Texas property tax rates averaging 1.8–2.2%, a typical residential solar system can save homeowners $400–$640 per year in property taxes.

To claim the exemption, you must file Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices) with your county appraisal district by April 30 of the year following installation. You do not need to re-file annually — the exemption remains in effect as long as the solar system is operational. Battery storage systems installed as part of a solar energy system and used to store solar-generated electricity generally qualify under the same exemption.

Over the 25-year lifetime of a typical system, this exemption can save Texas homeowners between $10,500 and $14,500 in total property taxes. With the federal residential solar tax credit now expired, this statewide exemption is the single most valuable solar incentive available to Texas homeowners in 2026.

Texas Sales Tax Exemption for Solar Equipment

Texas exempts solar energy equipment from the state’s 6.25% sales tax (plus any applicable local sales taxes). This exemption applies at the point of purchase, meaning you pay less upfront when buying solar panels, inverters, mounting hardware, and related components for your installation.

The exemption covers equipment used to produce, store, or distribute solar energy for residential or commercial use. Battery storage systems paired with solar installations are also generally eligible for this exemption. No special application is required — the exemption is applied automatically by the retailer or installer at the time of sale.

For a typical Texas residential solar system costing around $20,000–$25,000, the sales tax exemption can represent an immediate savings of $1,250–$1,560 or more, depending on local tax rates. This is an automatic, hassle-free benefit available to all Texas solar buyers statewide.

Frequently Asked Questions

Does Texas have net metering?

Texas does not have a statewide mandatory net metering law. Most Texas homeowners (roughly 85% of the state) are in the deregulated ERCOT market, where you must choose a Retail Electric Provider (REP) that offers a solar buyback plan to receive compensation for excess electricity sent to the grid. Buyback rates vary widely — from about 3.7¢/kWh up to full retail-rate equivalents. You can compare plans by ZIP code at powertochoose.org.

Buyback rates differ by territory: Austin Energy credits exports at ~9.91¢/kWh, CenterPoint/Houston (Green Mountain Energy) pays ~8.5¢/kWh, and AEP/TNMP (Chariot) pays ~7.0¢/kWh. In regulated territories like El Paso Electric and CPS Energy, net metering is offered directly by the utility. In areas with lower buyback rates, pairing solar with battery storage can help maximize your savings.

Do solar panels increase your home value in Texas?

Yes — but only if you own the system outright. According to a Zillow study, homes with solar panels sell for approximately 4.1% more than comparable homes without them. For a $400,000 home in Texas, that could mean roughly $16,400 in added value.

This benefit applies to purchased solar systems only. With a leased system (like a LightReach PPA or lease), Palmetto owns the equipment — so the home value increase does not apply. Additionally, a prospective buyer may need to assume the lease agreement, which can affect the sale. Texas also offers a 100% property tax exemption on the added home value from an owned solar installation.

How much does it cost to go solar in Texas?

With Palmetto’s LightReach lease, Texas homeowners can go solar for as low as $114/month — with no upfront cost. Palmetto owns and maintains the system, includes a 90% Production Guarantee, and a comprehensive protection program. It’s the most accessible way to go solar in Texas today.

For a cash purchase, the average Texas system costs around $25,222 (8.91 kW at $2.83/W). Note that following the 2025 federal law change, the 30% residential solar tax credit is no longer available for cash purchases. Use the calculator above for a personalized estimate.

How does leasing solar work and what’s the approximate cost in Texas?

With Palmetto’s LightReach program, you pay one simple monthly payment that covers everything — the solar panel system, installation, monitoring, maintenance, and a 90% Production Guarantee. There is no upfront cost. Palmetto owns the system, so you’re never responsible for repairs. For a typical 8.91 kW system in Texas, the estimated monthly lease payment is approximately $114/month.

Ready to go solar with no money down?

Speak with a Palmetto solar expert about LightReach leasing and Texas incentives.

Get a Free Quote

Texas Solar Irradiance

Solar panel production varies throughout the year based on daylight hours, weather patterns, and sun intensity. Texas boasts abundant sunshine and wide-open skies, but humidity, seasonal cloud cover, and intense summer heat can all influence how much energy your solar panels produce each month.

About the Data

This map shows average daily solar energy across Texas based on historical data.

Key Facts:

• Values shown are daily averages
• Based on 18 years of satellite data
• Click any area for detailed estimates

What Can the Average Texas Solar System Power?

Summer Production (July)

• 48.7 kWh/day in July, your 10 kW system could power:
  • 3.6 average Texas homes (15 kWh/day per home)
  • or run central AC for 18 hours AND power all other appliances
  • or fully charge 5.4 Tesla Model 3 electric vehicles

Winter Production (December)

• 32.0 kWh/day in December, your 10 kW system could power:
  • 2 average Texas homes (15 kWh/day per home)
  • or keep your home heating system running for 15 hours
  • or fully charge 3 Tesla Model 3 electric vehicles

Annual Production

• 14860 kWh/year over a year, your 10 kW system could:
  • Offset 10 tons of carbon dioxide emissions
  • or equal the environmental benefit of planting 175 trees
  • or save approximately $4,234 in electricity costs

Go Solar with LightReach — No Upfront Cost

If you’d rather go solar without a large upfront purchase, Palmetto’s LightReach program makes it straightforward. Depending on your utility provider in Texas, you may qualify for either a Power Purchase Agreement (PPA) or a solar lease. Major providers like Oncor (Dallas), CenterPoint (Houston), AEP Texas, Lubbock Power & Light, El Paso Electric, and Xcel Energy offer a PPA — meaning you pay a set rate per kilowatt-hour for the electricity your system generates, rather than a fixed monthly amount. Providers like Pedernales Electric Co-op, Bluebonnet Electric Co-op, Entergy Texas, Garland Power & Light, CoServ, and many other Texas co-ops offer a lease — a predictable fixed monthly payment regardless of how much your system produces.

Both options come with no upfront cost. Palmetto owns the system, handles all installation, permitting, and ongoing maintenance — so you never have to worry about repairs or performance. Every LightReach plan includes premium black solar panels, a high-efficiency inverter, detailed solar mapping, and comprehensive project management. If your system doesn’t hit our 90% Production Guarantee, we’ll credit you the difference.

Unlike a cash purchase — where you’re responsible for maintenance and recouping your investment over time — LightReach centralizes everything into one simple, inclusive plan managed solely by Palmetto Finance. Want to understand the full difference between leasing and buying? Explore our solar buy vs. lease guide to find the right fit for your home and budget.