Have you been thinking about putting solar panels on your Texas home? This is not an easy decision since there are many factors involved and a solar panel system on your roof can be somewhat expensive.
That's why one of the most frequent questions we get is: is it worth it to put solar on my Texas home?
The state of Texas has a reputation for being innovative and proactive. Many people are aware of the incredible programs that Texas has to incentivize people to move to solar. This move is great for the cost savings and the environmental impact.
The government of Texas tells us that there are over a million homes in Texas that have made the move to solar for their homes..
These homeowners are enjoying the savings on their electricity but more importantly, they are enjoying the peace of mind that comes with knowing that they will have electricity during any future power outages and will be protected from blackouts because they turned to solar power.
In this article, we are going to try to help you figure out if this move to solar energy is a good fit for your situation
We are going to address that question by looking at the many facets that make up solar energy as well as what is involved in putting solar panels on your roof. We will touch on the pricing for installation, the various different rebate programs, and incentive programs that you can take advantage of in Texas. And finally, we will get down to brass tacks - the dollars and cents of going solar.
One of the challenges that we encounter when addressing the cost of solar installation in Texas is that solar systems are made up of many components and are completely customizable for your home.
Most solar system installers have a dedicated design department that will create a system specifically for your roof. After they survey your home they will learn how much sun your roof gets, which way your roof faces, what size system you will need, the brand of panels you choose, how much roof space is available, etc. to be able to design a solar system that fits your unique needs.
On average, in a Texas neighborhood, solar panels run from $2.70 to $3 per watt. The reason we think of “cost per watt” is because once we size the system based on your needs, we can easily figure out your overall investment. If we decide to make changes later, it is an easy exercise to increase or decrease the total price. In the Solar industry, everything is based on the number of watts.
For example, if the needs of your home call for a 6-kilowatt (6 kW) solar panel system, you can expect the price around $17,000. This would be a typical price and doesn't factor in any of the things that would be unique to your circumstance which would increase or decrease that price.
On average across the state of Texas, the price for an installed solar panel system will fall between $11,900 and $16,200. Fortunately, this isn't the price that you would ultimately pay because there are Federal incentives and Texas State incentives that will lower that price considerably.
Depending on who you ask, these numbers will differ. In the 5 largest population centers in Texas ( San Antonio, Fort Worth, Houston, Austin, and Dallas) Prices range between $12,000 and $16,000 for a 7 KW solar panel system.
As I mentioned earlier, Texas homeowners can take advantage of federal and state programs that are designed to help people install solar on their roofs. These programs are designed to protect the good people of Texas and take the burden off of the electric grid. Let's talk about some of these programs that help homeowners go solar.
Solar Rebate Programs And Incentives In Texas
Texas has one of the best states for incentives and rebates when it comes to solar.
All of these programs exist to help homeowners pay for the cost of installing solar panels. Please remember that these systems usually don't simply offer a price reduction but they are sometimes complex. These systems are well tested and hundreds of thousands of Texans have taken advantage of them.
Federal Investment Tax Credit
This program is not unique to Texas but is probably the number one motivator when people are thinking of putting solar on their roofs. This program provides a rebate equal to 26% on the cost of their solar system.
Incentives From Individual Cities
Certain Texan cities are offering programs that are designed to help you make the decision to go solar. Of course, this depends on what city you live in or near is offering, but you can use these programs to reduce the cost of installing solar on your roof.
The City of Austin provides a rebate program they are calling the “residential solar rebate program" and it is very significant against the cost of a solar system. This rebate has a value of up to $2,500 for any city resident of Austin who installs a solar system on their home. Interestingly enough, this program requires the homeowner to go to a solar education course in order to qualify for this program.
The city of Houston has a different approach than Austin. In Houston, homeowners can use net metering from their utility company. Net metering is a program whereby the homeowner can sell excess electricity back to the utility. Green Mountain Energy, Amigo Energy, ITC, TXU, and Reliant each offer net metering programs.
Additionally, Reliant and Green Mountain will also pay up to $4,500 in a rebate for any solar panel installation that is eligible.
For homeowners that are farmers in Dallas as well as a Farmers Electric Cooperative member, can get additional rebates of up to $1,000. The utility provider, Oncor, also provides other incentives to homeowners in Dallas.
Customers of CPS Energy who reside in San Antonio can enjoy an amazing incentive program. This popular program has helped many residents of Texas install solar on their homes.
We touched on the incentive program from CPS Energy. we are going to delve a little more into that. This program began at the beginning of 2018.
CPS Energy created a solar program and funded it with $9M. This money was to be paid for the installation of a residential solar system for their customers.
It also provided for $6M for commercial solar panel installations. Giving rebates of up to half of the total cost of the installation of solar panels, and limited to $25,000 for residential solar panel systems and up to $80,000 for solar panel systems for commercial customers.
Solar Rights Law
One of the biggest challenges in the nation for the adoption of solar for electricity is that homeowners associations oftentimes don't like the look of solar panels in their neighborhood. Because of this, they make homeowners rules against it. As to be expected from Texas, they want people to have the freedom to decide. Hence, the solar rights law.
This law takes the decision away from the homeowner’s associations and puts it in the grasp of individual homeowners. It allows individual homeowners to make the decision to go solar or not by removing the interference of the homeowner’s associations.
Texas, as a state, does not have a net metering program like many other states of the Union. However, there are many utilities in Texas that do offer net metering programs. If you happen to live in the city of Brenham or are a customer of El Paso Electric, Green Mountain Energy, or CPS Energy, you will be pleasantly surprised that they offer net metering programs. This might make more of a difference if you understood a pretty important question. What is net metering?
What Is Net Metering?
Homeowners typically get their electricity from the grid. It provides power for everything “electric” in their homes. The grid also provides electricity for city and state buildings. Of course, once you have solar on your home, things work a little bit differently.
Once you have solar, you will probably produce more electricity than you can use at any particular time. If you decide not to include a solar battery in your configuration you won't have any place to store that electricity that you created in excess for use later.
Wouldn't it be great if all the extra electricity that the solar panels create could be sent back to the grid for neighbors to use? Well, that is exactly what net metering is. Net metering allows you to create as much electricity as your panels can produce, and sell the extra electricity back to the utility. Net metering programs allow homeowners who have a solar system on their roof a way to automatically sell the energy they make back to the utility company. In most states, net metering is part of state law. But in Texas, net metering is an agreement that you will have directly with your electricity provider - the utility.
Once you install solar panels on your roof, and they produce more electricity than you can use, you don't have to let it go to waste. The smart meter on your house will automatically keep track of the excess electricity that was returned to the utility and give you free credit in the future when you need to use that electricity.
There are a few ways to pay for your solar system. The most popular is to use a solar panel loan. There are specific lenders who offer solar panel programs. Normally, the solar company that is doing the installation will have a relationship with one or more of these lenders. They maintain these relationships so that they can quickly provide low-interest loans to their customers. Also, a good number of solar installers provide in-house loans. This allows solar companies to provide faster loans to a wider variety of customers. When calculating the “Payback Period” the cost of the loan is always factored into the calculations.
The Payback Period
The payback period is the amount of time it takes for the homeowner to earn back the cost of their solar installation. This period includes the cost of the system against the rebates, financial incentives, the credits we’ve covered, and the cost of your electricity. The payback period will tell you how long you should expect it to be before the total amount you’ve saved per month is equal to the cost of the system.
The average payback period in Texas is between 10 and 13 years. That might seem like forever, but it's not when you find out that the life of a solar panel system is 25 to 30 years.
Let's look at the case where your solar system completely pays for your home energy use. For this example, we will assume that the system costs you $18,000. Using the federal tax credit of 26%, the cost will automatically be reduced by $3,900 - leaving you with a system cost of $14,100. This price does not consider any other incentive or rebate programs, of which there are several. We won't consider these because they vary from location to location and we want to keep it simple for this article.
Solar panel systems usually have a lifetime of about 30 years. So that $14,100 will be exactly what you pay for electricity in the next 30 years. That works out to less than $500 a year for electricity.
Now let's compare that against a normal electricity bill in Texas for the same sized house. The average homeowner in Texas pays $140 per month for their electricity. If you multiply $140 X every month in the next 30 Years, it adds up to over $50,000. With solar, $14,100. With the power company, $50,000. That’s an enormous saving.
So, is it worth it to go solar in Texas? Absolutely!
Your savings will be over $35,000 just by switching to solar. Considering that most solar installers offer a “no-money-down” program, this is a very easy decision to make. The great state of Texas and the federal government are providing you outstanding programs so you can easily switch to solar. Add to the savings, the security of having electricity during a blackout, and that you will be helping clean up the environment, make the move to solar energy as soon as possible.