8 Best Solar Companies in Texas (January 2024 Review) – MarketWatch

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*Pricing is based on responses to two surveys we conducted in 2023 of 2,000 total homeowners with 8 kilowatt (kW) solar systems as well as pricing information obtained directly from SunPower, Tesla, Palmetto and local providers. Your cost may vary.

Top 8 Solar Energy Companies in Texas

Here is our list of the best solar companies in Texas:

For those located in Houston or Dallas, check out our top rated providers in your cities.

What To Look for in a Solar Company

We recommend looking for a solar installation company that balances fair pricing with quality equipment and solid warranty coverage. To find reputable companies, look for a solar installer accredited by the BBB and the North American Board of Certified Energy Practitioners (NABCEP).

Here are specific recommendations to follow when looking for solar companies in Texas:

  • Low-interest financing options: A 6 kW solar system has a typical cost of $15,060 in Texas. You can use the federal solar tax credit to claim 30% of your total solar system for the year you install panels, but the upfront cost is still significant. If you want to avoid a large upfront cost when buying a system, look for a solar company with low-interest financing options. For example, with a loan, you can pay $0 upfront and use energy savings to cover loan payments. Texas has an average residential electricity price of 14.01 cents per kilowatt-hour (kWh), but some energy rates exceed 20 cents per kWh. A 6 kW solar system can save over $1,100 per year, which homeowners can use to pay off a solar loan over time.
  • Local energy knowledge: Texas has a complex electric sector with multiple utility companies and electricity retailers. While you can choose the company that provides your electricity, the utility company that delivers that electricity is determined by your geographic location. For example, CenterPoint serves most Houston residents, while Oncor serves most Dallas-Fort Worth residents. The grid connection requirements and the incentives available for solar panel systems vary depending on your utility company. Ideally, look for a solar installation company familiar with local requirements and programs.
  • Backup power options: ERCOT and the electric companies that operate in Texas have worked to prevent major blackouts like those from February 2021. Electric companies have improved the local electrical grid since then, but the risk of blackouts is still a reality. Solar panels cannot provide long-term electricity during an outage. However, a solar company that also has home solar batteries can install a system that provides backup power during grid outages while also saving you money on power bills.

Benefits of Going Solar in Texas

There are several reasons why solar panels are worth the financial investment in Texas. The Lone Star State gets plenty of sunshine throughout the year, leading to high electricity production with solar. Depending on your location within the state, your home solar system may also qualify for financial incentives from utility companies.

If you live in Texas and install solar panels, the primary benefits of going solar include:

  • Power bill savings: A 6 kW solar system can generate more than 8,500 kWh of energy per year with the available sunlight in Texas. With an electric rate of 14 cents per kWh, you could see $1,190 in power bill savings each year after installing solar.
  • Financial incentives: Solar panels can qualify for incentives from local utility companies such as Oncor Electric Delivery, CenterPoint Energy, Austin Energy and CPS Energy. For example, in 2023 Oncor offered a cash incentive of up to $9,000 for home solar systems with energy storage.
  • Solar buyback programs: Texas does not have a statewide net metering program, but many power companies buy excess power from home solar systems. This can put money into the pockets of solar homeowners beyond the energy savings normally achieved by your solar panels.
  • Property tax exemptions: Texas has a property tax exemption for home solar systems. For example, if you’re a Texan who owns a $400,000 home and solar panels increase the home’s value to $430,000, property taxes remain calculated based on the initial $400,000 value.

Common Concerns

Every state offers particular opportunities and challenges for solar technology. In the case of Texas, the benefits of going solar outweigh the drawbacks. Here are the most common concerns you might have about installing solar power:

  • Lower energy savings than some states: Texas gets plenty of sunshine, but statewide, local electricity prices fall below the U.S. average. As of November 2023, the U.S. Energy Information Administration reported an average residential rate of 14.01 cents per kWh in Texas — which is less than the national rate of 15.93 cents per kWh. Many states have electric rates of 25 cents per kWh or more, including California and most states in the Northeast. If you own a 6 kW system that generates 9,000 kWh of energy per year in Texas, you will save around $1,261 on power bills. For someone paying 25 cents per kWh, the same amount of electricity would save around $2,250 per year.
  • Longer payback period: The typical payback period for solar panels in Texas is around eight to 12 years, depending on your specific electric rates and local incentives. By comparison, solar panels in high-cost energy states see payback periods of four to six years. However, a solar system with even an eight to 12-year payback period still has a decade or more of operation with a 25-year warranty in place.
  • No solar rebates or net metering: Texas has a property tax exemption for solar panels, but it has no statewide cash rebates or net metering policies. Benefits may be available in some Texas municipalities but are not guaranteed. Transmission and distribution utilities such as Oncor and CenterPoint Energy have incentive programs that include solar rebates, but funding is limited by year. Also, solar buyback programs are available from some of the electricity retailers that operate in Texas, but terms and conditions vary.

Texas homeowners are installing solar panels faster than any other state. Here are key facts and trends that show a promising outlook for the Texas solar industry:

  • Texas added 2,499 MW of solar capacity during the first half of 2023. For comparison, California was in second place with 1,648 MW installed during the same period.
  • The Lone Star State had 18,801 MW of installed solar power by April 2023, enough to power over 2.2 million homes.
  • Texas’s solar growth forecast for the next five years is 40,579 MW, a projected 216% increase.
  • The Texas solar industry has received $22.7 billion in cumulative investments, creating 11,250 jobs in the process.

Solar Incentives in Texas

Texas does not have many statewide solar incentives. However, all residents are eligible for the 30% federal solar tax credit, and many utilities and local governments offer solar incentives in the state.

Federal Incentives

The federal government provides all residential solar customers in the U.S. with a tax credit equal to 30% of their total solar installation cost. If the taxes you owe are less than the tax credit, the remainder will carry over to the next tax year. You must complete a solar installation between 2022 and 2032 to qualify. The rate will reduce to 26% in 2033 and 22% in 2034 before expiring in 2035.

Statewide Incentives

Texas is one of the few states that does not offer statewide mandated net metering, meaning you may not be able to earn bill credits for the excess energy your solar panels generate. However, many utility companies still offer net metering programs and solar rebates to their customers.

One of the few statewide solar incentives offered in Texas is its Solar Energy System Property Tax Exemption. The program excludes homeowners from having to pay property taxes on the additional value added to their homes after installing a solar energy system.

Local Incentives

Texas residents have an abundance of local incentives available to them to help lower the upfront cost of going solar. Check with your utility provider and local government to learn more about incentives in your area.

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