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Get a Free QuoteAbout 25% of Texas electricity customers are served by municipal utilities or electric cooperatives that operate outside the deregulated ERCOT market. You cannot choose your provider, and solar rules differ dramatically. This guide covers every major muni and co-op, their buyback rates, standby charges, system caps, and the battery strategy you need to maximize savings.
No statewide solar mandate: Texas has no law requiring municipal utilities or co-ops to offer net metering or allow solar interconnection. Each utility sets its own rules. The federal residential solar tax credit (Section 25D) expired December 31, 2025 — homeowners receive $0 in federal solar credits.
When most people talk about going solar in Texas, they are talking about the deregulated ERCOT market — where you choose from 100+ Retail Electric Providers and can find solar buyback plans from companies like Green Mountain Energy, TXU, or Chariot. About 75% of Texas customers are in this market.
But roughly 7 million Texans are served by municipal utilities or electric cooperatives that operate entirely outside this competitive market. These customers have one provider, one rate, and one set of rules — rules that are set locally, not by the PUC of Texas. If you live in Austin, San Antonio, Hill Country, or many rural/suburban areas, this guide is for you.
Solar can still save you money on a muni or co-op, but the strategy is different. Export rates are often low, standby charges can eat into savings, and battery storage becomes more valuable than in the competitive market. Understanding your specific utility's rules is the first step.
Texas has three fundamentally different utility structures, each with its own governance, solar policies, and rules for homeowners.
In the deregulated ERCOT market, IOUs like Oncor, CenterPoint, AEP Texas, and TNMP own the wires but do not sell electricity to consumers. You choose a Retail Electric Provider (REP) who buys wholesale power and sells it to you.
Solar: Interconnection through TDU. Buyback rate set by your chosen REP (3-12¢/kWh). No standby charges typical. No system size cap.
City-owned utilities like Austin Energy, CPS Energy, Georgetown, Lubbock P&L, New Braunfels, and Bryan TX Utilities. Governed by the city council. Rates and solar policies are set locally.
Solar: Rules set by city council. Austin Energy is the standout with $2,500 rebate + 9.91¢ VoS. Most others: avoided cost buyback (3-4¢/kWh).
Member-owned nonprofits serving rural and suburban areas: Pedernales EC, CoServ, GVEC, Bluebonnet, Brazos Electric, Trinity Valley EC. Governed by a member-elected board.
Solar: Board sets policy. Avoided cost buyback (2-5¢/kWh) is standard. Standby charges ($25-75/mo) are common. System caps often 10-25 kW. You are a member-owner with voting rights.
Side-by-side comparison of how solar works across Texas's three utility structures.
| Feature | Deregulated (ERCOT) | Municipal | Co-Op |
|---|---|---|---|
| Choose your electricity provider | Yes (100+ REPs) | No (one city utility) | No (one co-op) |
| Solar buyback rate | 3-12¢/kWh (varies by REP) | Varies (Austin: 9.91¢) | Avoided cost (2-5¢) |
| Net metering law | None (REP voluntary) | None (utility decides) | None (board decides) |
| Interconnection through | TDU (Oncor, CenterPoint) | Municipal utility | Co-op |
| Standby/demand charges | Rare | Sometimes ($15-25/mo) | Common ($25-75/mo) |
| System size cap | Usually none | Varies (10-25 kW) | Often 10-25 kW |
| Solar rebates available | Oncor battery rebate only | Austin: $2,500 rebate | Rare |
| Governance | PUC of Texas | City council | Member-elected board |
Not sure which you are? Visit PowerToChoose.org and enter your address. If it says “your area is not eligible for competitive choice,” you are on a municipal utility or co-op. You can also check your electric bill header or use the Texas Solar Utility Finder.
City-owned utilities set their own solar rules through city council policy. Here is what each major muni offers for residential solar in 2026.
Austin & Travis County
~12¢/kWh
Base electric rate
Solar Rebate
$2,500
Export Rate
9.91¢/kWh (Value of Solar)
System Cap
25 kW residential
Standby Charge
None
Best municipal solar program in Texas. VoS tariff credits all production, not just excess.
San Antonio & Bexar County
~12.5¢/kWh
Base electric rate
Solar Rebate
$0 (depleted)
Export Rate
3-4¢/kWh (avoided cost)
System Cap
25 kW residential
Standby Charge
None
Residential rebates fully depleted. Self-consumption strategy critical at low export rate.
Georgetown
~11¢/kWh
Base electric rate
Solar Rebate
$0
Export Rate
Avoided cost (~3-4¢/kWh)
System Cap
10 kW residential
Standby Charge
$25/month
City already runs on 100% renewable energy contracts. Solar buyback less economic.
Lubbock
~12¢/kWh
Base electric rate
Solar Rebate
$0
Export Rate
Limited program
System Cap
Case-by-case
Standby Charge
Varies
Partially transitioning to ERCOT market. Check current interconnection status before installing.
New Braunfels
~10¢/kWh
Base electric rate
Solar Rebate
$0
Export Rate
Avoided cost (~3-4¢/kWh)
System Cap
25 kW residential
Standby Charge
None
Interconnection available. Low base rates reduce solar savings potential.
Bryan
~11¢/kWh
Base electric rate
Solar Rebate
$0
Export Rate
Avoided cost (~3¢/kWh)
System Cap
10 kW residential
Standby Charge
$15/month
Net metering at avoided cost. Small system cap limits sizing.
Member-owned cooperatives serve rural and suburban Texas. Solar policies vary widely — some co-ops welcome solar while others discourage it with high standby charges and low caps.
Hill Country (Dripping Springs, Marble Falls, Johnson City)
350,000+ members
~12¢/kWh
Base electric rate
Export Rate
3-5¢/kWh (avoided cost)
System Cap
25 kW residential
Standby Charge
$0-25/month (varies by rate class)
Members
350,000+
Largest co-op in TX. Solar interconnection allowed. Standby charge recently reduced for some members.
Denton County (Flower Mound, Highland Village)
200,000+ members
~13¢/kWh
Base electric rate
Export Rate
3-5¢/kWh (avoided cost)
System Cap
25 kW residential
Standby Charge
$25/month
Members
200,000+
Solar interconnection available. Some territory overlaps with Oncor TDU area.
Gonzales, Seguin, New Braunfels area
100,000+ members
~12.5¢/kWh
Base electric rate
Export Rate
Wholesale (~3¢/kWh)
System Cap
10 kW residential
Standby Charge
$50/month
Members
100,000+
Controversial $50/month standby charge significantly reduces solar savings. 10 kW cap limits system size.
East of Austin (Bastrop, Lockhart, Giddings)
100,000+ members
~12¢/kWh
Base electric rate
Export Rate
3-4¢/kWh (avoided cost)
System Cap
25 kW residential
Standby Charge
$25/month
Members
100,000+
Solar allowed. Avoided cost buyback. Standard interconnection process.
East TX (Kaufman, Henderson, Van Zandt)
55,000+ members
~13¢/kWh
Base electric rate
Export Rate
2-4¢/kWh (avoided cost)
System Cap
10 kW residential
Standby Charge
$35/month
Members
55,000+
Higher standby charge and low export rate make self-consumption strategy essential.
Wholesale co-op (66 counties)
Wholesale (16 member co-ops) members
Varies by member co-op
Export Rate
Set by member co-op
System Cap
Set by member co-op
Standby Charge
Set by member co-op
Members
Wholesale (16 member co-ops)
Wholesale co-op — individual member cooperatives set their own solar interconnection policies.
The single biggest obstacle to solar savings on a co-op or municipal utility is the standby charge — a monthly fee that can erase hundreds of dollars in annual savings.
Standby charges (also called demand charges or grid access fees) are monthly fees that utilities charge solar customers to cover fixed infrastructure costs — maintaining power lines, transformers, and substations that solar customers still rely on for nighttime power, cloudy days, and backup.
The argument is that solar customers use fewer kilowatt-hours but still need the grid as a backup, so they should pay their “fair share” of infrastructure costs. Critics counter that these charges are punitive and discourage clean energy adoption.
Real example — GVEC: A $50/month standby charge costs $600/year. On a 10 kW system producing ~15,000 kWh/year with a 12.5¢ retail rate, your gross savings would be ~$1,875/year. After the standby charge, actual savings drop to ~$1,275/year — extending your payback by 3-4 years.
Always ask first: Contact your co-op or muni before signing any solar contract. Ask specifically about standby charges, demand fees, grid access fees, and any additional monthly costs for solar customers.
When your utility only pays 2-5¢/kWh for exported solar, the math changes dramatically. Battery storage lets you keep your solar energy and use it at full retail value.
Assumed rates: 12¢/kWh retail rate, 3¢/kWh export rate (typical co-op). Shows how battery storage increases the value of your solar production.
| Scenario | Self-Consumption | Exported | Export Value | Self-Use Value | Total Annual |
|---|---|---|---|---|---|
| No battery, no load shifting | 30-40% | ~8,500 kWh | $255-425 | $510-720 | $765-1,145 |
| No battery, smart load shifting | 50-60% | ~5,500 kWh | $165-275 | $850-1,080 | $1,015-1,355 |
| BESTBattery (10-13 kWh) | 80-90% | ~1,500 kWh | $45-75 | $1,360-1,620 | $1,405-1,695 |
Bottom line: A battery can increase your annual solar value by $400-650 compared to no battery on a typical co-op with a 3¢ export rate. Over 25 years, that is $10,000-16,000 in additional savings — often enough to pay for the battery itself.
Store midday solar production and use it evening through morning. Every kWh you self-consume saves 12¢ instead of earning 3¢ — a 4x improvement in value.
Texas grid reliability remains a concern after Winter Storm Uri and subsequent summer peaks. A battery provides 8-12 hours of backup power for essential loads during outages.
Co-op and muni rates have increased 15-30% over the past 3 years. A solar-plus-battery system locks in your cost of electricity and becomes more valuable as rates rise.
Not sure whether you are in a deregulated, muni, or co-op territory? Here are three ways to find out in under a minute.
Enter your address at PowerToChoose.org. If it shows electricity plans, you are in the deregulated ERCOT market. If it says “your area is not eligible,” you are on a muni or co-op.
Look at the header of your electric bill. It will show the name of your provider. If it says “Electric Cooperative,” “EC,” or a city name (Austin Energy, CPS Energy, etc.), you are not in the deregulated market.
Use our Texas Solar Utility Finder to look up your utility by ZIP code and get instant information about solar rules, buyback rates, and available incentives for your specific provider.
Some co-ops discourage solar with high standby charges, low buyback rates, or slow interconnection. Here is how to make solar work anyway — and how to push for change.
Right-size for self-consumption
Do not oversize your system. Match production to your actual consumption. Excess exports at 2-5¢/kWh waste money.
Add battery storage
A 10-13 kWh battery can push self-consumption from 30-40% to 80-90%, dramatically improving ROI on low-export-rate utilities.
Smart load shifting
Run your dishwasher, laundry, pool pump, and EV charger during peak solar production hours (10am-3pm) to consume more of your own power.
Consider a smaller system
If your co-op caps systems at 10 kW and charges $50/month standby, a smaller 6-8 kW system with a battery may pencil out better than a maxed-out 10 kW system that exports heavily.
Attend board meetings
As a member-owner, you have the right to speak at co-op board meetings. Bring data on peer co-ops with better solar policies.
Vote for solar-friendly directors
Co-op boards are elected by members. Support candidates who commit to fair solar policies, reduced standby charges, and higher export rates.
Build a member coalition
Connect with other solar-interested members. A group petition or organized presence at meetings carries more weight than individual requests.
Track legislative action
The Texas Legislature has considered co-op solar reform bills in past sessions. Contact your state representative to support fair solar interconnection standards for co-ops. The 2027 session is the next opportunity.
With the federal residential ITC expired, these are the incentives still available for muni and co-op customers in Texas.
Texas Tax Code Section 11.27 exempts 100% of the appraised value added by solar panels from property taxes. Available statewide, regardless of utility type.
Saves $300-600/year depending on your county tax rate.
$2,500 upfront rebate for residential solar installations. Only available to Austin Energy customers. Plus the 9.91¢/kWh Value of Solar tariff for all production.
Austin Energy customers only.
If you go through a solar lease or PPA, the third-party system owner can claim the 30% commercial ITC for projects beginning construction before July 4, 2026 — passing savings to you through lower payments.
Homeowner does NOT claim — the financing company does.
EXPIRED December 31, 2025. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. This applies regardless of whether you are on a muni, co-op, or deregulated utility.
DEPLETED. CPS Energy's residential SolarHost program ran out of funding. No residential rebates available. SolarHostSA continues for commercial projects only.
Texas has no statewide net metering law. Each muni and co-op sets its own export rate. Most pay avoided cost (2-5¢/kWh). Austin Energy's 9.91¢ VoS tariff is the exception, not the rule.
Unlike the deregulated market where interconnection goes through a TDU (Oncor, CenterPoint), munis and co-ops handle everything in-house. The process is simpler but timelines vary.
Call your muni or co-op before signing any solar contract. Ask about system caps, standby charges, export rates, and interconnection fees.
Day 1File interconnection application with your system design, panel specs, inverter info, and single-line diagram. Fee: $50-250.
Week 1Utility reviews your system design for grid compatibility, transformer capacity, and safety. May request changes to system size.
Weeks 2-6Install your system, pass local building inspection, then schedule utility inspection of the meter and interconnection point.
Weeks 4-8Utility grants PTO and installs a bidirectional meter (if needed). You can now export excess solar to the grid.
Weeks 5-10Timeline note: Municipal utilities (Austin Energy, CPS Energy) tend to have streamlined processes with 2-4 week turnaround. Smaller co-ops may take 6-10 weeks for engineering review, especially for larger systems. Always contact your utility first to understand their current timeline.
Austin Energy
$2,500 rebate + 9.91¢ VoS + no standby = 6-8 yr payback
CPS Energy
No rebate, but no standby charge and 25 kW cap. Self-consumption strategy needed.
New Braunfels Utilities
No standby charge, 25 kW cap, low 10¢ base rate keeps costs down.
Pedernales EC (PEC)
25 kW cap, reasonable standby charge, largest TX co-op with improving policies.
GVEC
$50/month standby + 10 kW cap + wholesale export = worst solar economics in TX.
Trinity Valley EC
$35/month standby + 10 kW cap + 2-4¢ export. Battery essential.
Georgetown Utility Systems
City already 100% renewable. $25/mo standby + low export = limited solar value-add.
Lubbock Power & Light
ERCOT transition in progress. Limited solar program. Uncertain rules.
Check your electric bill header — it will show the name of your provider. You can also visit PowerToChoose.org and enter your address. If it says "your area is not eligible for competitive choice," you are in a municipal or co-op territory. The PUC of Texas utility lookup tool can also identify your provider. About 25% of Texas electricity customers are served by municipal utilities or electric cooperatives rather than competitive REPs in the deregulated ERCOT market.
A municipal utility (like Austin Energy or CPS Energy) is owned by the city government and governed by the city council. An electric cooperative (like Pedernales EC or CoServ) is a member-owned nonprofit governed by an elected board of directors. Both operate outside the deregulated ERCOT market, meaning you cannot choose your provider. The key practical difference for solar is that co-ops more commonly charge standby fees ($25-75/month) and often have lower system size caps (10-25 kW).
Austin Energy is by far the best municipal utility for solar in Texas. It offers a $2,500 upfront rebate, the Value of Solar tariff at 9.91 cents/kWh for all solar production (not just excess), and a community solar option through GreenChoice. CPS Energy in San Antonio has no residential rebate and only pays 3-4 cents/kWh for exports. Most other municipal utilities offer avoided-cost buyback at 3-4 cents/kWh with no rebates.
Standby charges (also called demand charges or grid access fees) are monthly fees co-ops charge solar customers to cover fixed infrastructure costs — maintaining power lines, transformers, and substations that solar customers still rely on. These range from $15-75/month depending on the co-op. GVEC charges $50/month, which adds $600/year to your costs and significantly extends your solar payback period. Always ask about standby charges before signing a solar contract.
Yes, but your strategy must adapt. With high standby charges, focus on: (1) Right-sizing your system to offset only your consumption — do not oversize, (2) Adding battery storage to maximize self-consumption and minimize exports that earn only 2-5 cents/kWh, (3) Using smart load shifting to run appliances during peak solar production. Even with a $50/month standby charge, solar can still save money if you optimize for self-consumption rather than exports.
There is no Texas state law requiring municipal utilities or co-ops to allow solar interconnection or offer net metering. Unlike some states that mandate net metering for all utilities, Texas leaves it entirely up to each muni or co-op. Most do allow solar interconnection but set their own terms: buyback rates, system size caps, standby charges, and interconnection fees. You are dealing with local policy, not state regulation.
No. The federal residential solar tax credit (Section 25D) expired December 31, 2025 under the One Big Beautiful Bill Act signed July 4, 2025. Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. The Texas property tax exemption for solar equipment is the main remaining incentive — it prevents your property taxes from increasing due to the added value of solar panels.
Yes. Battery storage is significantly more valuable for co-op and municipal utility customers than for those in the deregulated ERCOT market. Since most munis and co-ops only pay 2-5 cents/kWh for exported solar, every kWh you store and use yourself saves you the full retail rate (10-13 cents/kWh) instead of earning the low export rate. A battery can increase self-consumption from 30-40% to 80-90%, making a major difference in your annual savings.
As a member-owner of your electric cooperative, you have voting rights. Attend your co-op annual meeting and board elections. Speak at board meetings about solar policy. Connect with other solar-interested members to build a coalition. Vote for board candidates who support distributed solar. Many Texas co-ops have improved their solar policies in response to member advocacy. Some co-ops have member advisory committees where you can raise solar issues directly.
The process varies by utility but generally involves: (1) Submit an interconnection application with your system design, (2) Pay an application fee ($50-250), (3) Wait for engineering review (2-6 weeks), (4) Get approval and install your system, (5) Schedule utility inspection, (6) Receive permission to operate. Municipal utilities tend to be faster (2-4 weeks total) while some co-ops take 4-8 weeks. Always contact your utility before signing a solar contract to confirm their current interconnection requirements and timeline.
No. Texas does not allow peer-to-peer electricity sales. All solar exports must go through your utility — whether that is a municipal utility or a co-op. The utility sets the buyback rate and manages the billing. Virtual net metering (crediting solar production to multiple meters) is also not available at most Texas munis and co-ops. Community solar programs, which would allow shared solar access, are extremely limited in Texas — Austin Energy GreenChoice is the only notable municipal option.
Solar installation costs are roughly the same regardless of your utility type — typically $2.00-2.40 per watt in Texas for a 10 kW system ($20,000-24,000 before incentives). The difference is in the return on investment. Austin Energy customers see the fastest payback (6-8 years) due to the $2,500 rebate and 9.91 cent VoS rate. Most co-op customers face longer payback periods (10-14 years) because of low export rates (2-5 cents) and standby charges ($25-75/month). The property tax exemption saves $300-600/year regardless of utility type.
Co-ops and munis often have restrictive interconnection rules, but Propel financing still works because the third-party system owner handles the paperwork and installation. A third-party owner installs FEOC-compliant Silfab 440W panels and claims the 40% Section 48E ITC, passing the savings to you as a fixed monthly payment. An 8 kW system at $2.90/W ($23,200) becomes ~$13,920 effective cost at ~$117/month. 8.99% APR, 25-year term, 660 FICO minimum. Must begin construction before July 4, 2026.
See Propel Financing DetailsWe will analyze your specific utility's solar rules, buyback rates, standby charges, and system caps to design a system that maximizes your savings — whether you are on Austin Energy, Pedernales EC, GVEC, or any other Texas muni or co-op.