Are solar panels worth it in Texas in 2024?

The average Texas homeowner pays $36,570 to install solar panels , and given the larger initial investment Texas residents face in installing solar panels, a question arises for many Texas homeowners: is it worth it to install solar panels in Texas? This article will explore the viability and value of solar energy in Texas, providing a comprehensive guide for Texas residents considering installing solar panels.

Solar Energy Resources in Texas

Texas has significant advantages when it comes to solar resources, making it one of the popular choices for installing solar panels. Below are the key features of solar energy resources in Texas:

• Plenty of Sunlight: Texas is located in the southern part of the United States, near the equator, and thus enjoys plenty of sunlight exposure. Most of the state experiences about 204 sunny days per year, a number that is close to the U.S. national average (205 days), providing an abundant source of light for solar panels.
• High Sunlight Intensity: In addition to the long hours of sunlight, Texas also has relatively high sunlight intensity, which means that solar panels can convert sunlight into electricity more efficiently. This direct, intense sunlight makes solar power particularly efficient in the state.
• Climate Versatility: Although Texas sometimes experiences extreme weather, such as tornadoes in the northern part of the state and intense thunderstorms and hurricanes across the state, overall, these weather events have a limited impact on solar panels. Solar panels are capable of generating electricity efficiently in sunny weather, and while they are less efficient in cloudy or rainy weather, rain also helps to clean the surface of the solar panels of dust and dirt, which in turn improves their subsequent efficiency in generating electricity.

The demand for solar energy in Texas is growing, thanks to increased awareness of clean energy and rising energy costs among residents and businesses. The widespread use of solar energy not only helps to lower energy bills for homes and businesses, but also helps to reduce dependence on fossil fuels and promote environmental sustainability.

How to Determine if Solar Panels are Worth it in Texas?

Although Texas is blessed with an abundance of solar energy resources, suitable climatic conditions, and good policy support, this makes Texas an ideal choice for installing solar panels. And Texas is one of the fastest-growing states in the U.S. It has the second highest installed solar capacity in the country, behind California. However, this doesn't mean that solar panel installation is right for every Texas resident, and determining whether solar panels are a worthwhile investment in Texas requires a number of considerations. Here are some key points that can help you determine if solar panels are right for your home.

Energy Demand and Consumption

Homes in Texas consume a higher amount of electricity on average per month, largely due to the high energy demand of its residents. Since the size of a solar panel system is largely based on energy demand, most homes in Texas are able to meet most or all of their electricity needs by installing an appropriately sized solar panel system. This means that in the long run, these homes will be able to significantly reduce or completely eliminate their dependence on grid power, resulting in savings on their electricity bills.

However, the specific consideration of whether or not to install solar panels will need to be determined in relation to your household's monthly electricity consumption. Generally speaking, homes that use less than 500 kWh of electricity per month do not need to install solar panels because the cost will not pay for itself.

You can calculate the number of solar panels required using the solar load calculator

Solar Panel Costs and ROI in Texas

In Texas, where the average cost per watt for a solar system is $3.18, a typical home would need to install an 11.5 kW system to offset its electricity consumption, with a final cost of about $25,599, taking into account a 30% federal tax credit. While the initial investment may seem high, solar faces significant savings potential considering the average monthly electricity bill in Texas is $156.56. The average payback period for solar panels is 12 years, which is in line with the national average, with most homes achieving a return on investment in 9 to 15 years.

You can also use our solar payback calculator to estimate the savings on your electric bill and the payback period, the shorter the payback time, the better the installation of solar panels for your home.

Roof Conditions and Sun Exposure

The efficiency of solar panels is affected by roof conditions and sun exposure. Most of Texas enjoys plenty of sunlight, but individual factors such as roof shading (e.g., trees, buildings, etc.) may affect the efficiency of solar panels. For this reason, it is important to evaluate the orientation, slope, and shading of your roof before installing solar panels.

In the northern hemisphere, south-facing roofs are usually best suited for installing solar panels because these roofs receive the most sunlight throughout the day. East- and west-facing roofs can also be installed, but may produce less energy.

The best angle for your roof usually corresponds to the latitude of your location. In Texas, a tilt angle between 20-30 degrees is usually effective.

Texas Solar Incentives

While Texas does not have a statewide solar net metering policy, many of the large utility companies offer their own net metering plans. These programs allow households to sell excess electricity generated by their solar panels during the day to the utility and receive a credit to offset electricity consumption at night or on cloudy days. In addition, while Texas does not have statewide tax incentives, some local governments and utilities offer local rebates and incentives for solar installations.

Pros and Cons of Installing Solar Panels in Texas

For whether you should buy solar panels in Texas , you must also understand the pros and cons of installing solar panels in Texas.

Installing solar panels in Texas has many advantages

Long-term savings on electricity bills:

The average monthly household electricity bill in Texas is about 156.56, which is higher than most of the country. By installing solar panels, households can significantly reduce or eliminate this expense. According to EcoWatch, the average solar system in Texas can save a home about 32,651 on their electric bill over its lifetime, which is expected to be 25+ years.

For example, if a home saves $1,850 per year with a solar system (based on an estimate of annual electric bill reductions), that home will save a huge amount of money on their electric bill over the entire life of the solar system.

Increase property value:

According to Zillow, installing solar panels typically increases property values by about 4.1%. In Texas, the average home value is 296,127, which means that a solar system could potentially increase property values by about 12,141. in areas with higher home values like Dallas, Fort Worth, Houston, and San Antonio, this appreciation could be even higher.

Environmentally Friendly:

Using solar energy is a clean, renewable energy source that helps reduce carbon emissions and air pollution. This is an important consideration for families concerned about environmental sustainability.

Policy Incentives:

While Texas does not have a statewide net metering policy, many of the large utilities have their own net metering programmes that allow households to earn energy credits for the extra electricity they produce. In addition, the federal government offers a 30% solar investment tax credit (ITC), which significantly reduces the cost of installing a solar system.

Stable energy costs:

By installing solar panels, families can lock in energy costs and avoid the risk of future electricity price increases. Solar systems have a lifespan of 25 years or more, providing families with a long-term guarantee of their energy costs.

There are also some potential problems with installing solar panels in Texas

High initial investment:

Installing solar panels requires some initial investment, averaging around $25,599 (after taking into account a 30% federal tax credit). For some families, this can be quite a burden.

Dependence on sunlight:

Solar panels need sunlight to generate electricity, so on cloudy or rainy days, less power is generated. However, Texas has about 204 sunny days per year, which allows solar systems to operate efficiently in most cases.

Maintenance Costs:

Although solar systems are relatively low maintenance, they occasionally require cleaning and possible repairs. Additionally, if a system fails, additional costs may be required to repair or replace components.

Policy Change Risks:

While there are currently numerous incentives for solar energy in Texas and from the federal government, these policies may change over time. Families need to take this into account when installing a solar energy system.

Installation Restrictions:

Certain roof structures or orientations may not be suitable for the installation of solar panels. In addition, some communities or homeowners associations may have restrictions on the appearance or installation of solar energy systems.

Incentives for Installing Solar Panels in Texas

Texas offers a number of attractive incentives to encourage residents and businesses to install solar panels. For starters, homeowners can claim the federal solar tax credit, which covers 26% of the cost of the installation, with that percentage dropping to 23% by 2023. In addition, homeowners who install solar panels enjoy a property tax exemption, which applies to the equipment and its installation costs.

Net metering is a key incentive in the state, allowing solar customers to receive a credit on their electric bill for excess electricity generated by their system. This means that solar customers can reduce their future electricity bills by supplying extra power to the utility.

At the local level, Texas cities such as Austin also offer rebates of up to $2,500 per solar panel project covering residential properties. In addition, commercial properties can also receive incentives ranging from $0.25 to $0.50 depending on the amount of solar energy they generate.

For solar customers in Houston and Dallas, the provider also offers rebates and buyback programmes. These cities are not subject to strict market regulation, and consumers can choose from a wide range of suppliers, helping to further promote the popularity and adoption of solar energy. Taken together, these measures create a favourable environment in Texas for promoting renewable energy.

Solar Panel Outlook for Texas

In 2023, Texas solidified its position as the nation’s leader in solar energy by installing more solar capacity than any other state. Since 2021, Texas has added over 15 gigawatts (GW) of new solar capacity, surpassing the entire solar installation of the United States in 2019. Looking ahead, Texas is poised to continue its dominance in the solar sector.

Between 2024 and 2034, the state is expected to lead the nation with nearly 100 GW of new solar capacity additions. This projection indicates that Texas will outpace the next closest state by a two-to-one margin, emphasizing its unparalleled commitment to renewable energy expansion.

In 2023, solar and wind energy provided up to 40% of the state’s energy during the summer heat wave.

In 2023, Texas experienced a severe summer heat wave with temperatures soaring into the triple digits. During this critical period, solar and wind energy played a vital role in meeting the state’s energy demands. According to an analysis by Texas energy expert Doug Lewin , renewable energy sources provide between 30% to 40% of the power required by the state.

The reliance on solar and wind energy during the heat wave helped stabilize the energy grid and reduced the strain on conventional power plants, potentially preventing outages and ensuring a more reliable energy supply for residents.

As you can see, investing in solar panels in Texas is very promising!

Things to Consider When Installing Solar Panels in Texas

When installing solar panels in Texas, there are several considerations to take into account to ensure that you are maximising the use of solar energy and avoiding unnecessary hassles. Here are some of the key considerations:

Evaluate the suitability of solar energy:

Before installing solar panels, it's important to first assess your home's suitability for solar energy. This includes your electricity consumption, the orientation and tilt of your roof, and whether it receives enough sunlight.

Choose a reputable installer:

Choosing a solar installer with a good reputation and experience is crucial. Make sure they hold the necessary licences and insurances and are able to provide high-quality installation services.

Understand financial and incentive policies:

In Texas, while there are no statewide tax incentives, the federal solar investment tax credit (ITC) is still available. In addition, some utilities and local governments may offer other incentives such as discounts, rebates, or tax credits. Be sure to understand these policies and make sure you are eligible to apply.

Consider grid interconnection and net metering:

While Texas does not have a statewide net metering policy, many large utilities have their own programmes. Find out if your utility offers net metering and how it works. If your company doesn't offer it, you may want to consider installing solar panels and pairing them with a battery system to store energy.

Pay attention to the load bearing and structure of your roof:

Solar panels need to be installed on a sturdy roof. Before installing them, make sure your roof can handle the extra weight and that it is structurally suitable for a solar system.

Consider maintenance and upkeep:

Solar systems require regular maintenance and upkeep to ensure that they operate efficiently. Learn about best practices for maintaining and cleaning solar panels, and determine who will be responsible for this work.

Understand contract and warranty policies:

Before signing a contract with your installer, be sure to read the terms of the contract carefully, including the warranty period, maintenance responsibilities, and any potential costs. Make sure you fully understand the contract and consult a professional if necessary.

Consider battery storage:

If you want to ensure that you still have power in the event of a blackout or want to take advantage of excess solar energy when the grid is unavailable, it may be a good idea to consider installing a solar battery and energy storage system.

Watch for future policy and market changes:

Solar policies and market conditions may change over time. Before installing solar panels, stay up-to-date on the latest policy and market trends to make an informed decision.

Ensure cooperation with your utility company:

Before installing solar panels, work with your utility company and make sure you understand how they will be connected to the grid and any associated regulations or procedures.

By taking these considerations into account, you can ensure that you make informed decisions and maximise the potential of solar energy when installing solar panels in Texas.

Is it worth investing in solar panels in Texas in 2024?

In summary, investing in solar panels in Texas is an option worth considering. Although the initial investment cost is high, it can bring significant economic and social benefits in the long run. As technology continues to advance and policies continue to be optimised solar panels have a bright future in Texas. Investing in solar panels is not only an economic choice but also a sign of social responsibility for environmentally conscious and sustainable families and businesses.

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FAQ About Installing Solar Panels in Texas

How long does it take for solar panels to pay for themselves in Texas?
Answer: The time it takes for solar panels in Texas to pay for themselves varies depending on a number of factors, including system size, electricity rates, government subsidies, and local weather conditions. Generally, the average payback period is about 9 to 15 years, which you will also need to estimate using a solar calculator or consulting a professional.

Do solar panels increase home values in Texas?
A: Yes, solar panels typically increase the value of a home. According to several studies, the market value of a home increases when a solar system is installed, especially in more environmentally conscious areas. However, if you choose to lease or sign a PPA (Power Purchase Agreement), you may not enjoy the benefits of increased home value.

Do I need a permit to install solar panels in Texas?
A: Yes, a permit is required to install solar panels in Texas. The permitting process is in place to ensure a secure connection to the grid and that your home can structurally support the weight of the panels. Most Texas solar companies will take care of the permitting for you.

Can I install my own solar panels in Texas?
A: Yes, you can install your own solar panels in Texas, but it requires some technical knowledge and experience. If you are unfamiliar with electrical installations and roofing projects, it is recommended that you hire a professional solar installation company to get the job done. Doing your own installation can be a safety risk and may affect the performance and safety of your system if not installed properly.

What type of contract or financing should I choose when installing solar panels?
When choosing to install solar panels, you should carefully consider the different contract and financing options available. Purchasing a system and paying for it outright may be the most economical way to go, as you may be eligible for federal tax credits. However, if you want to reduce your upfront costs, you can also opt for a solar loan or a lease/power purchase agreement (PPA). Keep in mind, however, that leases and PPAs may not increase the value of your home and may take longer to pay for themselves. Always work with a reputable solar installer to ensure you get the best advice.