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We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
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Review the preliminary layout with a commercial solar specialist. We’ll confirm roof condition, structural requirements, utility service, and the next feasibility steps.
Analyze a commercial roofTexas has the lowest commercial solar costs in the nation ($1.10-$1.35/W for large systems) but also the lowest commercial electricity rates ($0.098/kWh average). The economics work differently here — lower savings per kWh but more kWh produced and lower upfront investment. Model your 25-year IRR, NPV, and payback with ITC stacking, MACRS, and ERCOT rate sensitivity.
TX Large System
$1.10-1.35/W
Lowest in US
Annual Production
1,500-1,700
kWh/kW/year
Typical 25-Year IRR
14-22%
Cash purchase
C-PACE IRR
35%+
Leveraged return
Texas commercial solar projects achieve 14-22% unlevered IRR over 25 years for cash purchases, depending on system size, ITC adders (30-70%), and electricity rate assumptions. A typical 500 kW system at $1.20/W costs $600,000, receives a $180,000+ ITC credit, and generates $75,950/year in electricity savings at the $0.098/kWh average rate. Simple payback is 4-7 years. With C-PACE financing ($0 down), leveraged IRR exceeds 35%. Texas IRR is slightly lower than Massachusetts (16-24%) because electricity rates are 55% lower, but the 30-45% lower installation costs and 25-40% higher production keep returns competitive.
Enter your system cost, size, production, and — most importantly — the electricity rate from your own utility bill or REP contract. The model returns a live 25-year IRR, NPV, simple payback, and cumulative cash-flow curve. It starts on the 500 kW base case used throughout this page; the scenario and sensitivity tables below are worked examples to compare against.
Every field below is editable. Enter your own numbers to see a live 25-year result.
Enter the blended rate from your own utility bill — the placeholder is only an example, not a default.
25-yr IRR
—
NPV
—
Payback
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Federal ITC (30%)
$180,000
MACRS tax value
$107,100
Net investment after upfront incentives
$312,900
System cost − ITC − MACRS present value
Cumulative net cash position (25 yr)
Enter your electricity rate to see IRR, NPV, payback, and the cash-flow curve.
These results are estimates driven entirely by the values you enter above — not a quote. Cash flows assume 0.5% annual panel degradation, flat annual O&M, upfront ITC and MACRS present value netted into the initial investment, and 25-year straight electricity escalation. The MACRS shield assumes a taxable owner; state conformity to federal bonus depreciation varies (Massachusetts, for example, decouples), and tax-exempt entities use Direct Pay for the ITC and cannot claim MACRS. Confirm bonus eligibility, ITC adders, interconnection, and your actual tax position with a professional.
Turn this model into an engineer-reviewed proposal
We build your 25-year cash flow on your building's real usage, roof, utility tariff, and financing.
Texas commercial solar operates in a fundamentally different economic environment than Massachusetts or Connecticut. The numbers tell the story: Texas installation costs are 30-45% lower, annual production is 25-40% higher, but electricity rates are 55-60% lower and there is no state income tax for MACRS. The result is that Texas projects have comparable IRRs to northeastern states — but the financial mechanics are completely different.
In the Northeast, high electricity rates ($0.22-$0.23/kWh) drive massive annual savings that quickly overcome the higher installation costs. In Texas, lower rates ($0.098/kWh) mean each kWh saved is worth less, but you produce 25-40% more kWh per kW of capacity. And the lower installation cost means you need less savings to break even. The math converges to surprisingly similar returns — just through different paths.
| Metric | Texas | Massachusetts | Connecticut | Advantage |
|---|---|---|---|---|
| Install Cost (500 kW) | $1.20/W ($600K) | $1.75/W ($875K) | $1.65/W ($825K) | TX 31% lower |
| Annual Production | 1,550 kWh/kW | 1,175 kWh/kW | 1,200 kWh/kW | TX 32% higher |
| Commercial Rate | $0.098/kWh | $0.227/kWh | $0.221/kWh | NE 2.3x higher |
| Annual Savings (500 kW) | $75,950 | $133,363 | $132,600 | NE 75% higher |
| ITC (30% base) | $180,000 | $262,500 | $247,500 | NE higher $ (higher cost) |
| MACRS Tax Rate | 21% (fed only) | 29% (fed + state) | 28.5% (fed + state) | NE higher rate |
| State Incentive | None (property tax exempt) | SMART 3.0 | PURA tariff | NE has state programs |
| Simple Payback | 5-7 years | 4-6 years | 4-6 years | Comparable |
| 25-Year IRR | 14-20% | 16-24% | 15-22% | NE slightly higher |
This model assumes a 500 kW commercial solar system at $1.20/W ($600,000), 30% ITC, 100% first-year bonus depreciation at the 21% C-corp rate, 1,550 kWh/kW production, $0.098/kWh commercial rate with 2.5% annual escalation, and 0.5% annual panel degradation.
| Year | Investment | ITC Credit | MACRS Savings | Energy Savings | Cumulative |
|---|---|---|---|---|---|
| Year 0 | $-600,000 | — | — | — | $-600,000 |
| Year 1 | — | $180,000 | $124,236 | $75,950 | $-219,814 |
| Year 2 | — | — | — | $77,849 | $-141,965 |
| Year 3 | — | — | — | $79,795 | $-62,170 |
| Year 4 | — | — | — | $81,790 | $19,620 |
| Year 5 | — | — | — | $83,835 | $103,455 |
| Year 6 | — | — | — | $85,931 | $189,386 |
| Year 10 | — | — | — | $94,860 | $560,000 |
| Year 15 | — | — | — | $107,400 | $1,065,000 |
| Year 20 | — | — | — | $121,600 | $1,640,000 |
| Year 25 | — | — | — | $137,700 | $2,290,000 |
Despite Texas having the lowest commercial rates in the country, a 500 kW commercial solar system generates nearly $2.3 million in cumulative benefits over 25 years — a 3.8x return on the initial investment. This includes $180,000 in ITC, $124,000 in MACRS savings, and ~$2.0 million in electricity cost avoidance. The 100% property tax exemption saves an additional $240,000-$330,000 over 25 years.
The right financing structure depends on your tax situation, cash position, and balance sheet preferences. Texas businesses have four primary options, with C-PACE being particularly advantageous for property owners in Austin, Dallas, Houston, and San Antonio.
Upfront Cost
100%
ITC Benefit
Full (30-70%)
MACRS Benefit
Full (21% fed rate)
25-Year IRR
16-22%
Best for: Profitable C-corps or pass-through entities with high federal tax liability
Upfront Cost
$0 down
ITC Benefit
Full (30-70%)
MACRS Benefit
Full (21% fed rate)
25-Year IRR
20-35%+ (leveraged)
Best for: Property owners who want 100% financing while keeping all tax benefits. Active in Austin, Dallas, Houston, SA.
Upfront Cost
$0 down
ITC Benefit
PPA provider claims
MACRS Benefit
PPA provider claims
25-Year IRR
N/A (savings-based, not investment)
Best for: Nonprofits, schools, and entities with no/low tax liability. Typical PPA rate: $0.05-$0.08/kWh.
Upfront Cost
$0 down
ITC Benefit
Lessor claims
MACRS Benefit
Lessor claims
25-Year IRR
N/A (expense-based)
Best for: Businesses preferring off-balance-sheet treatment. Payments are operating expenses.
ERCOT wholesale prices are more volatile than regulated markets in the Northeast. This volatility creates both risk and opportunity for commercial solar investments. The table below models six scenarios to bound the range of possible outcomes.
| Scenario | Rate | Production | ITC | 25-Year IRR | Payback |
|---|---|---|---|---|---|
| Base Case | $0.098/kWh | 1,550 kWh/kW | 30% | 17.2% | 5.8 years |
| High Buyback REP | $0.098/kWh + 10¢ export | 1,550 kWh/kW | 40% | 22.4% | 4.2 years |
| ERCOT Rate Spike (+30%) | $0.127/kWh | 1,550 kWh/kW | 30% | 21.8% | 4.5 years |
| Low Production Year | $0.098/kWh | 1,400 kWh/kW | 30% | 14.6% | 6.5 years |
| Max ITC Stack (70%) | $0.098/kWh | 1,550 kWh/kW | 70% | 32.1% | 2.8 years |
| C-PACE Leveraged | $0.098/kWh | 1,550 kWh/kW | 30% | 35%+ (leveraged) | 0 years (cash positive day 1) |
Unlike regulated utility markets in MA and CT where rate increases follow predictable regulatory proceedings, ERCOT wholesale prices are market-driven and can spike dramatically. During Winter Storm Uri (2021), wholesale prices hit $9,000/MWh. Summer 2023 heat waves pushed prices above $5,000/MWh. While most commercial customers are insulated by fixed-rate REP contracts, rate escalation trends over 25 years are less predictable in Texas than in regulated markets. Model both 2.0% and 3.5% annual escalation to bound your IRR range.
While Texas has no state solar incentive program, the combination of federal tax benefits and the state property tax exemption creates a powerful incentive stack. For a 500 kW system:
Note: Property tax exemption value assumes 1.8% average TX property tax rate over 25 years. MACRS value based on $510,000 depreciable basis (after ITC reduction) at 21% C-corp rate; under OBBBA’s 100% first-year bonus depreciation the full $107,100 is recovered in Year 1.
Complete guide to commercial solar in Texas: ITC, MACRS, financing, industry use cases.
Year-by-year MACRS schedule with entity type comparison and C-PACE interaction for Texas.
Compare solar value by TDU territory, REP buyback plans, and demand charge structures.
Get your project's real IRR and payback
We model your facility's cash flow with current incentives and your utility rate.
Texas commercial solar projects typically achieve 14-22% unlevered IRR over 25 years for cash purchases. The range depends on system size (larger = lower cost/W = higher IRR), ITC adders achieved (30-70%), electricity rate and escalation assumptions, and solar production (varies by region from 1,500 to 1,700 kWh/kW/year). With C-PACE financing, leveraged IRR can exceed 35% because the business invests $0 upfront while receiving tax credits and depreciation worth 40-55% of system cost in Year 1. Texas IRRs are slightly lower than Massachusetts (16-24%) or Connecticut (15-22%) because Texas electricity rates are 55-60% lower, but the lower system costs and higher production partially compensate.
Our team will build a 25-year IRR/NPV model specific to your Texas business — including your TDU territory, REP buyback rate, demand charge profile, and ITC adder eligibility.