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Texas produces 20-25% more solar energy than Northeast states, but lower electricity rates and no state rebate mean a longer payback. The 100% property tax exemption and 25-year savings exceeding $81,000 still make solar a solid investment.
Avg Utility Rate
$0.14/kWh
State Incentives
$0
Payback Period
13.4 years
25-Year Savings
$81,400
By NuWatt Energy Team • Updated February 2026 • 8 min read
Yes, solar is worth it in Texas in 2026 even without the federal tax credit. With average utility rates of $0.14/kWh and $0 in state incentives, a typical 11kW system pays for itself in approximately 13.4 years and delivers $81,400 in total savings over 25 years. Solar locks in your electricity cost at a fraction of what you pay the utility, and the gap widens every year as rates climb 3-5% annually.
A typical residential solar installation in Texas uses 25 panels to build a 11kW system. Here is the full cost breakdown before and after state incentives, with no federal tax credit applied (Section 25D expired December 31, 2025).
Cost Per Watt
$2.72/W
Gross System Cost
$29,951
Net Cost After Incentives
$29,951
2025 vs 2026 Cost Comparison
2025 (with 30% ITC): A homeowner in Texas would have received a $8,985 federal tax credit, bringing the net cost down to $20,966.
2026 (no ITC): The same system now costs $29,951 after state incentives only — $8,985 more than it would have cost last year.
The payback period tells you how many years of electricity savings it takes to fully offset the cost of your solar installation. In Texas, the math works out as follows:
Payback = Net Cost ÷ Annual Savings = $29,951 ÷ $2,233 = 13.4 years
| Year | Annual Savings | Cumulative (Net) | Status |
|---|---|---|---|
| Year 1 | $2,233 | -$27,718 | Recovering |
| Year 5 | $2,612 | -$17,856 | Recovering |
| Year 10 | $3,178 | -$3,141 | Recovering |
| Year 15 | $3,867 | +$14,762 | Profit |
| Year 25 | $5,724 | +$63,044 | Profit |
Payback comparison: In 2025, this same system would have paid back in 9.4 years. In 2026, it takes 13.4 years — 4 years longer. The difference is entirely due to losing the $8,985 federal tax credit.
While Texas homeowners can no longer claim the federal residential solar tax credit (Section 25D), the state offers several incentive programs that help offset the cost of going solar.
100% of added value
Texas Tax Code §11.27 provides a 100% property tax exemption for the added home value from solar panels. On a $29,951 system adding ~$20,000 in home value, this saves $400–$640/year in property taxes depending on your county rate.
Up to $2,500
Austin Energy customers receive up to $2,500 upfront for residential solar installations, plus the Value of Solar rate (9.91¢/kWh) for exported energy. Austin is the only major TX city with a direct solar rebate.
Up to $9,000
Oncor offers up to $9,000 for combined battery storage + solar installations in the DFW area. Battery required to qualify.
Net metering is the policy that determines how your utility credits you for excess solar electricity you send to the grid. In Texas, the specifics vary by utility company. Here is a summary of the top utilities and their current net metering policies.
| Utility | Credit Type | System Size Cap | Excess Policy |
|---|---|---|---|
| Oncor (Deregulated — DFW) | Solar buyback plans through REPs | No hard cap (varies by REP) | Export credits vary by REP plan. TXU Solar Buyback pays 1:1 up to usage, then wholesale. Green Mountain offers competitive buyback rates. |
| Austin Energy (Municipal) | Value of Solar (VoS) tariff | Up to roof capacity | VoS rate of 9.91¢/kWh for all exported energy. $2,500 upfront rebate also available. Best solar deal in Texas. |
| CenterPoint (Deregulated — Houston) | Solar buyback plans through REPs | No hard cap (varies by REP) | Export credits depend on your chosen REP. Reliant, TXU, and Green Mountain offer solar-specific plans in CenterPoint territory. |
Net metering is critical to your solar payback. When your panels produce more than you use during the day, the excess flows to the grid and your meter effectively runs backward. You receive credits that offset your nighttime and cloudy-day electricity usage. The stronger the net metering policy, the more value you extract from every kilowatt-hour your panels produce.
Losing the 30% federal tax credit makes solar more expensive upfront, but it does not erase the long-term financial case. Here is why Texas homeowners should still seriously consider going solar in 2026:
Excellent sun (15,950 kWh/year for an 11 kW system) — 20-25% more production than Northeast states
100% property tax exemption saves $400–$640/year on top of electric bill savings
No state sales tax exemption for solar — 6.25% sales tax applies to equipment
Deregulated market means you choose your REP and solar buyback plan
Rising utility rates protect your investment. Electricity prices in Texas have historically risen 3-5% per year. Your solar panels produce power at a fixed cost, meaning your savings grow every single year as the gap between solar and utility pricing widens.
Solar increases your home value by approximately 4%. National studies consistently find that owned solar systems add roughly 4% to a home's sale price. On a median-priced home in Texas, that translates to thousands of dollars in added equity — often recovering a significant portion of your net system cost before you factor in electricity savings.
These are real solar installations completed by NuWatt Energy in Texas. Every system was designed, permitted, and installed by our team.
9.2 kW · 27 LONGi panels · Enphase IQ7+
Completed August 2022
View Full Project →
8.5 kW · 25 Q.CELLS panels · Enphase IQ7+
Est. 12,422 kWh/year
Completed December 2022
View Full Project →
14.3 kW · 42 REC panels · Enphase IQ7+
Est. 14,771 kWh/year
Completed August 2022
View Full Project →
The 30% federal Investment Tax Credit (ITC) is gone for homeowner purchases (Section 25D), but it is still available to solar companies through Section 48/48E. When you sign a solar lease or Power Purchase Agreement (PPA), the installer owns the system, claims the 30% credit, and passes some of those savings to you through lower monthly payments.
For a full comparison of owning vs. leasing solar in 2026, including monthly cost examples and long-term savings projections, see our Solar Lease vs. Buy 2026 guide.
Maximize your savings: Combine solar with a heat pump for maximum savings — electrifying both your electricity and heating in Texas can cut your total energy costs by 50–70%.
Yes, but the math has changed. An 11 kW system costs about $29,951 with no federal ITC. With excellent sun producing 15,950 kWh/year and a $0.14/kWh average rate, you save about $2,233/year. That is a 13.4-year payback with 25-year savings exceeding $81,000. The 100% property tax exemption adds $400–$640/year in additional value. For faster ROI, consider a third-party owned (TPO) lease or PPA where the financing company claims the Section 48 commercial ITC.
No. Texas does not mandate net metering. Instead, the deregulated ERCOT market offers "solar buyback plans" through retail electric providers (REPs). Austin Energy is the notable exception — its Value of Solar rate pays 9.91¢/kWh for all exported energy. In deregulated areas, TXU Solar Buyback and Green Mountain offer competitive export credit rates, but they are not 1:1 retail rate.
Texas has much lower electricity rates ($0.14/kWh vs. $0.22–$0.30/kWh in New England), so each kWh of solar saves less money despite TX producing 25% more solar energy. Texas also has no state solar rebate program (except Austin Energy), no sales tax exemption for solar, and no SREC/production incentive. The tradeoff: lower installation costs ($2.72/W vs. $2.89–$3.08/W) and much higher production partially offset the rate disadvantage.
Every roof is different. Get a personalized savings estimate based on your actual electricity usage, roof orientation, and local utility rates in Texas.
Or call us directly: (877) 772-6357