Is Solar Worth It in Texas in 2026?
Texas gets a lot of sun — roughly 235 sunny days a year statewide — and a well-sited rooftop system around Dallas produces about 1,523 kWh per installed kilowatt per year (PVWatts data). Electricity prices have also climbed steadily: about 15.5¢ per kWh in 2025, up roughly 42 percent since 2005, with the last decade running about 3 percent a year. High production and rising bills are the two ingredients that usually make solar pay off.
But 2026 changed the math everywhere, and Texas has its own wrinkle on top. The 30 percent federal tax credit that used to knock thousands off a system ended for installations completed after December 31, 2025 — no phase-out, no exceptions for owned systems. Texas never had a state credit to fall back on, since it has no state income tax. What's left is a property tax exemption plus whatever export credit you can negotiate — and that's where Texas gets complicated. Roughly 85 percent of the state is a deregulated electricity market, so there's no single "net metering rate" here. Some homeowners get real money for exports; others get next to nothing. This page walks through Texas's actual numbers.
Texas Electricity Prices
Solar is a bet on where electricity prices go next, so look at where they've been first. Here's the last several decades of Texas residential rates, from federal EIA data.
Full Texas electricity price data (1990–2025)
| Year | Texas (¢/kWh) | US avg (¢/kWh) |
|---|---|---|
| 1990 | 7.2 | 7.8 |
| 1991 | 7.6 | 8.0 |
| 1992 | 7.7 | 8.2 |
| 1993 | 8.0 | 8.3 |
| 1994 | 8.1 | 8.4 |
| 1995 | 7.7 | 8.4 |
| 1996 | 7.8 | 8.4 |
| 1997 | 7.8 | 8.4 |
| 1998 | 7.7 | 8.3 |
| 1999 | 7.6 | 8.2 |
| 2000 | 8.0 | 8.2 |
| 2001 | 8.9 | 8.6 |
| 2002 | 8.1 | 8.4 |
| 2003 | 9.2 | 8.7 |
| 2004 | 9.7 | 9.0 |
| 2005 | 10.9 | 9.5 |
| 2006 | 12.9 | 10.4 |
| 2007 | 12.3 | 10.7 |
| 2008 | 13.0 | 11.3 |
| 2009 | 12.4 | 11.5 |
| 2010 | 11.6 | 11.5 |
| 2011 | 11.1 | 11.7 |
| 2012 | 11.0 | 11.9 |
| 2013 | 11.4 | 12.1 |
| 2014 | 11.9 | 12.5 |
| 2015 | 11.6 | 12.7 |
| 2016 | 11.0 | 12.6 |
| 2017 | 11.0 | 12.9 |
| 2018 | 11.2 | 12.9 |
| 2019 | 11.8 | 13.0 |
| 2020 | 11.7 | 13.2 |
| 2021 | 12.1 | 13.7 |
| 2022 | 13.8 | 15.0 |
| 2023 | 14.5 | 16.0 |
| 2024 | 14.9 | 16.5 |
| 2025 * | 15.5 | 17.3 |
Source: US EIA, average residential retail electricity price. Values in cents per kWh. * 2025 is preliminary.
Texas rates sat around 15.5¢ per kWh in 2025 — about 42 percent higher than in 2005. That's a real but comparatively modest climb next to some other states, partly because ERCOT's competitive wholesale market has kept a lid on prices for long stretches. The more useful number for planning is the last-decade pace: roughly 3.0 percent a year, which compounds to roughly double your bill over a typical system's working life. A rising rate line makes every kWh your roof produces worth a little more each year.
The Texas Sun, Month by Month
At about 30.9°N latitude, Dallas sits solidly in the sunbelt but far enough north that winter days are noticeably shorter than summer ones. That's the shape below.
Texas monthly solar production data
| Month | kWh per installed kW |
|---|---|
| Jan | 113 |
| Feb | 106 |
| Mar | 126 |
| Apr | 130 |
| May | 134 |
| Jun | 139 |
| Jul | 144 |
| Aug | 145 |
| Sep | 138 |
| Oct | 126 |
| Nov | 109 |
| Dec | 112 |
| Year | 1523 |
Source: NREL PVWatts typical-year estimate (Dallas), per installed kW at latitude tilt.
August is the strongest production month at roughly 145 kWh per installed kW, while February is the weakest at about 106 — a swing of nearly 40 percent. That August peak lines up almost exactly with when Texas AC bills are worst, which helps if your plan credits exports well. It matters less if your buyback rate is weak — then solar's value leans more on what it saves you directly than on what it earns back from the grid.
What Solar Costs in Texas in 2026
Industry-reported pricing (EnergySage, SolarReviews, and similar marketplace aggregators) puts most residential Texas installs at roughly $2.20 to $3.20 per watt as of mid-2026 — third-party estimates, not a government-published rate, so treat them as a starting point for your own quotes. With the federal credit gone, the number you negotiate is very close to the number you pay.
| System Size | Typical 2026 Cost | Roughly Offsets | Fits |
|---|---|---|---|
| 5 kW | $11,000 to $16,000 | ~7,615 kWh/yr (~$98/mo at 15.5¢) | Smaller home, lower usage |
| 8 kW | $17,600 to $25,600 | ~12,184 kWh/yr (~$157/mo) | Average Texas home |
| 12 kW | $26,400 to $38,400 | ~18,276 kWh/yr (~$236/mo) | Large home, heavy AC use |
Those offset figures assume you can use or bank all the power your system makes — worth flagging here, since a poor buyback plan means excess summer production doesn't convert cleanly into savings. Compare price per watt across at least three installers, and ask each one whether the federal credit is baked into their quote. If it is, that quote is wrong.
Estimate Your Texas Payback
The calculator below starts from Texas's average electricity rate and typical production around Dallas. Enter your own monthly bill to see an estimated system size, payback period, and 25-year savings. Texas rates have climbed about 3.0 percent a year over the last decade — a reasonable starting point for the inflation field, though drag it lower if you expect ERCOT's competitive market to keep a lid on prices, or higher if you expect grid-hardening costs to pass through to ratepayers.
Texas Solar Incentives in 2026
- Gone — the 30 percent federal credit: The federal Residential Clean Energy Credit ended for installations completed after December 31, 2025, with no phase-out. An installer's pitch that still assumes it is out of date.
- Never existed — a state credit: Texas has no state income tax, so there was never a state-level solar credit to repeal. DSIRE lists no active Texas residential solar credit or statewide rebate program as of 2026.
- Still here — the property tax exemption: Tax Code Section 11.27 excludes 100 percent of the added appraised value from a qualifying solar device. You must file Comptroller Form 50-123 with your county appraisal district (not the Comptroller), typically January 1 to April 30 the year after installation — miss it and the exemption isn't automatic.
- Patchy — municipal utility rebates: Austin Energy offers a $2,500 rebate tied to a required solar education course. CPS Energy in San Antonio has ended its rebate entirely. On a different utility or co-op, check their site directly — there's no statewide default.
- Partial — leases and PPAs: Third-party-owned systems can still capture a separate federal business credit (Section 48E) through 2027, but it belongs to the leasing company, not you. It may show up as a lower lease rate, or it may just pad their margin. Compare any lease against a cash or loan purchase first.
Solar equipment isn't specifically exempted from Texas sales tax the way it is in some other states, so factor that into your installer's all-in quote.
Net Metering and Solar Buyback in Texas
This is where Texas genuinely differs from most of the country: there is no statewide net metering law. DSIRE and the Public Utility Commission of Texas confirm there's no PUCT rule requiring a fixed 1:1 credit for solar exports. What you get for exported power depends entirely on where you live and what plan you choose.
In the roughly 85 percent of the state served by deregulated Retail Electric Providers under Power to Choose, net metering isn't automatic — you must opt into a REP's voluntary solar buyback plan. Rates vary enormously: some REPs offer a flat, low fixed credit around 3-4¢/kWh (close to wholesale avoided cost), while others offer real-time wholesale plans where the credit floats with the ERCOT market — spiking well above $1/kWh during scarcity, or crashing near zero during oversupply. A plan that looks best in July can look very different in October.
Regulated municipal utilities are the exception, each setting its own tariff by ordinance. Austin Energy's Value of Solar (VoS) tariff credited 9.91¢/kWh as of 2026 — roughly double what CPS Energy in San Antonio pays under its avoided-cost buyback, around 3-4¢/kWh (CPS's rebate has ended). Two Texas homes with identical systems, 80 miles apart, can see meaningfully different payback purely from utility territory.
Free-Nights Plans and Solar Don't Mix
Texas is famous for "free nights" and "free weekends" electricity plans, which exist here specifically because of ERCOT's day/night price spread — REPs can afford cheap overnight power because daytime demand and price run so much higher. It's a genuinely good deal if you don't have solar.
If you do, there's a catch rarely explained up front: free-nights plans are structurally incompatible with solar buyback in nearly every current plan as of 2026. The billing math assumes you're a net buyer of power around the clock — the REP recoups "free" nighttime energy by charging more during the day. A solar owner exporting power breaks that math, so REPs generally require picking one structure or the other, not both. This is a real trade-off unique to Texas's deregulated retail market. Ask any REP directly whether their free-nights plan works with solar before signing; the honest answer is usually no.
How to Go Solar in Texas
Work through these steps in order before you commit.
- Pull your last 12 power bills for your true average monthly cost — Texas bills swing hard between a mild spring month and a brutal August.
- Identify your setup: municipal utility (Austin Energy, CPS Energy), co-op, or deregulated REP under Power to Choose. This determines your buyback rate.
- If deregulated, shop Power to Choose specifically for solar buyback plans and compare per-kWh export rates — don't assume "free nights" and buyback coexist.
- Confirm your roof has 10-15 years of life left, or replace it first — see our roofing guide before committing panels to an aging roof.
- Get at least three quotes and compare price per watt, equipment, and warranties — confirm none assume the expired federal credit.
- File Comptroller Form 50-123 with your county appraisal district after installation to lock in the property tax exemption.
- Have your installer verify wiring capacity and permitting — see our electrical guide for what a solar-ready interconnection involves.
For the mechanics of how solar works, sizing, and buying versus leasing, read our main solar panels guide. If hail or wind is a concern for your roof, our home insurance guide covers how policies treat rooftop solar in storm-prone areas.
Sources
Figures on this page are 2026-current. Rates: US EIA, Electric Sales, Revenue, and Average Price (2025 preliminary). Federal credit repeal: IRS — Residential Clean Energy Credit and CRS IN12611. Net metering and incentive status: DSIRE — Texas. Property tax exemption: Comptroller Form 50-123 and Tax Code §11.27. Austin Energy rate and rebate: Value of Solar Rate and Solar Solutions. Sunny days: Current Results. Cost per watt: EnergySage and SolarReviews. Production: NREL PVWatts. Reviewed every six months.