Texas solar 101: must read before you buy solar panels
Benefit from a PV system
5.65 hours of peak sunlight
Take advantage of PV modules working longer hours than in other states
Sell the excess electricity to the utility grid and reduce over 75% of your electricity bill
2 years payback period
A solar power system in Texas pays for itself a couple of times during its lifespan
Reduce the cost of your system by 26%
Get a quarter of the cost off your taxes with the Federal Solar Tax credit
Property tax exemption
Solar panels will increase the price of your home. Don’t pay taxes on this added value
Texas #8 in the US
- $65 452/year Average savings from going solar in Texas
- 13 680 kWh/year Average electricity consumption of a FL household
- 8 293 kWh/year AC energy output of a 5 kW solar system installed in Texas
- 12 ¢ /kWh The cost of electricity today in Texas
- 25 ¢ /kWh The forecast average utility price over the next 25 years
- $0.59/WAverage gross price of a solar power system as of May 2021
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Solar laws, incentives and rebates in Texas you need to know
Return 26% of your PV system cost with Federal Solar Tax Credit
The Solar Investment Tax Credit (ITC) allows homeowners to claim 26% of the cost of their solar power system installed until 2022 as an income tax deduction. For example, if your solar system costs $20,000, you are eligible for $5,200 (26% of the total gross cost) in tax credit. Solar system cost comprises not only the money spent on solar equipment, but also freight shipping costs, professional installer fees, tools bought or rented and so on. To claim the ITC, complete all the necessary forms and submit them when filing your taxes.
Sell excess electricity with Net Metering Program
Net Metering allows residential solar owners to put the excess electricity onto the utility grid instead of storing it with batteries. When you sell your solar power to the grid, you receive an electricity bill reduction according to the rate you currently pay for power. For every kWh you contribute to the grid, you get one kWh off of your next utility bill. Although Texas doesn’t have a statewide net metering program, there are many utility companies that offer this opportunity. Here are some of them:
Save additional $300 to $1,000 a year trading RECs
Renewable Energy Credits are certificates granted to any person or entity upon generation of each MWh of clean electricity. Unlike with Net Metering, you don’t need to sell any electricity to get credits. The value of RECs is always changing, which makes them similar to stock market assets. Based on the available data, selling RECs could mean anywhere from $300 to $1,000 annually for a 10 kW solar system. To participate, first you may want to contact the Public Utility Commission for relevant details. After that, you can create a REC account with the Electric Reliability Council of Texas (ERCOT) to begin storing and selling your credits.
Save up to $3,000 with solar rebate programs
Texas doesn’t have an initiative encompassing the whole state. However, some local authorities and utility companies provide homeowners with nice rebates:
- Austin Energy offers a $2,500 rebate after completion of their free educational course. It is available online and a short quiz will be offered upon its completion. With this course the company intends to help its customers make an informed choice about solar power.
- CPS Energy will pay its customers the same amount – $2,500, but the company is giving a $500 premium to those who opt for local PV modules like Mission Solar. To participate, a customer should first complete the application form and submit it to the company’s email specified in the form’s header.
Freeze your property tax with Renewable Energy Source Exemption
A solar PV system installed in a home increases its value by about 4%, says a 2019 Zillow report. This would mean higher property taxes in other states, but not in Texas. According to the Texas Tax Code, 100% of the real property value increase that occurs as a result of a solar PV system installation should be ignored.
Install your solar panels in Texas with no worries
It is legal to install solar panels on your house. What’s more, this right is protected by law in Texas. The law states that nobody, including homeowner associations, can prohibit or restrict the installation of solar devices. If your HOA imposes any restrictions, they must be reasonable, not arbitrary, and applied to all association members. These restrictions must not affect the performance or increase the cost of a solar system.
Something you should remember:
- You don't need to get any approval from your HOA to install a solar system in Texas.
- HOAs are legally allowed to instruct you where and how to install PV modules. According to the law, they can implement restrictions if your equipment threatens public safety, extends beyond or above the roofline or doesn’t conform to the slope of the roof.
- Your homeowner association might also come to inspect the installation process to make sure you make the most of the solar panels.
- There may be height restrictions in some places in Texas that forbid solar system installation. For example, tall buildings near airports will have different installation laws when it comes to using solar panels.
- Any requirements forcing you to hide the system from view will generally violate the law.
Solar panels help Texans survive hurricanes
Texas is one of the most hurricane-prone states in the US. Severe storms bring damage and devastation, cutting people off the utility grid for days. Solar panels are able to withstand most hurricanes, but in the 2021 winter storm in Texas, that took the lives of 151 people and left 4.5 million homes and enterprises without power, the renewable sources of energy got a big part of the blame for the outages. The hard data tells another story: during one of the harshest days of the power crisis, thermal generation dropped by a whopping 45%, wind output dropped by about 13%, but solar installations produced even more energy than expected. Solar panels are friends that will weather any storm with you!