Are Solar Panels Worth It in Texas?
Last updated July 1, 2026 · based on Texas energy prices
In Texas, where residential electricity averages about 15¢/kWh and rooftop solar yields roughly 1,500 kWh per kW per year, solar has a longer payback here (about 16.7 years) because sunlight is more limited — it makes the most sense if your rate is rising or you value energy independence.
Texas solar cost & savings (typical 7 kW system)
| Metric | Estimate |
|---|---|
| Annual production | 10,500 kWh |
| Installed cost (before incentives) | $21,000 |
| Estimated annual savings | $1,260 |
| Payback period | 16.7 years |
| 25-year net savings | +$8,680 |
Figures use Texas average prices, a 7 kW system at $3.00/watt, 50% self-consumption at retail plus a conservative 9¢/kWh net-metering credit, and ~0.5%/yr panel degradation. Sources: EIA electricity prices and NREL PVWatts production modeling.
What this means for Texas homeowners in 2026
The 30% federal residential solar tax credit (Section 25D) expired December 31, 2025, so a 2026 installation in Texas carries the full upfront cost unless a state or utility incentive applies. Because Texas electricity costs around the national average, the payback case is more marginal — strongest for high electricity users, south-facing roofs, and homeowners who plan to stay long term.
Frequently asked questions
Are solar panels worth it in Texas in 2026?
At Texas's electricity price of 15¢/kWh, a typical 7 kW system saves about $1,260 per year and pays for itself in roughly 16.7 years. There is no federal solar tax credit in 2026 (Section 25D expired December 31, 2025), so these figures reflect bill savings and net metering only.
How much do solar panels cost in Texas?
A 7 kW system costs roughly $21,000 installed at about $3.00/watt before any state or utility incentive. Costs vary by installer, equipment, and roof complexity.
How much electricity will solar produce in Texas?
About 1,500 kWh per year per kW installed in Texas, so a 7 kW system produces roughly 10,500 kWh/year. Your exact output depends on roof orientation, tilt, and shading.
Estimates based on Texas average energy prices and a simplified model; your results will vary. Energy prices and incentives change frequently. Not financial advice.