Solar Panel Cost in Texas: $2.25/W, 10.7–21.1-Year Payback

Solar in Texas costs about $18,000 for 8 kW at $2.25/W and pays back in roughly 10.7–21.1 years at 15.9¢/kWh with the federal credit at $0.

Updated September 2026 · Source: EIA Electric Power Monthly Table 5.6.A (July 2026 data) · next EIA update ~Oct 23

By SolarCostData Data Desk · Reviewed September 2026 · Corrections log

On this page: CalculatorTableHow we calculatedSources

Why Texas’s payback lands where it does

Texas’s average rate rose about three percent to 15.9 cents per kilowatt-hour this July from 15.36 cents a year earlier, a rank-29 rate that’s fairly ordinary for a state this size. Strong sun makes up the difference: yield of 1,455 kilowatt-hours per installed kilowatt, well above the national middle, combined with relatively low installed costs, pulls the payback down to a brisk 10.7 years. Reliant Energy Retail Services, the largest retail electric provider in Texas’s competitive market with over 1.5 million residential customers, actually charges above the statewide average at 17.4 cents, so Reliant customers should see a payback faster than the 10.7-year state figure. Texas sets no statewide net-metering rule at all — in its deregulated market, what an export is worth is whatever a customer’s own retail electric provider contract says, so shopping around for a REP with a real buyback plan matters as much as the state’s averages.

Electric utilities in Texas

The state average hides real spreads between utilities. The largest residential utilities EIA-861 lists for Texas, with each one’s own average bundled residential price (2024 — revenue ÷ sales, the audited annual figure, not this month’s tariff):

Your utility decides Texas’s real number — the ZIP lookup finds it in three clicks; the 2024 annual utility averages above sit apart from the June-2026 monthly 15.9¢ state figure.

Texas’s rate, the last 24 months

July 2025 → July 2026: 15.36¢ → 15.88¢. The rate tracker has every month against the US average.

An 8 kW system in Texas, priced out

The $2.25/W used above comes from EnergySage marketplace quotes (August 2026). Those are quotes in a competitive online market, not signed contract prices.

For comparison, Lawrence Berkeley National Laboratory’s Tracking the Sun reports $4.04/W for Texas in 2025 (n=2,670) — 1.80x higher. The two measure different things: LBNL records prices actually reported to incentive programs, including dealer-fee financing and full retail channel costs, while EnergySage reflects what a price-sensitive online shopper is quoted. The real market median is probably between them. At the LBNL price this system would cost $32,320 and take about 18.6 years to pay back, against 10.7 at the quote-based figure — treat that as the upper case.

Read that table with one caveat: $2.25/W is Texas’s market average, and it is the input most likely to differ for you. A quote $0.50 per watt above or below the $2.25 used here moves the payback by roughly a year and a half in either direction.

How much sun Texas actually gets

A kilowatt of panels in Texas produces about 1,455 kWh a year on an unshaded, south-facing roof at a 20-degree pitch. Sites that swap Texas’s 1,455 kWh for a single national average are how Arizona and Washington end up with identical paybacks despite a 1.6x real difference in output.

That figure is a five-point cluster around Dallas. It is a state average, and in Texas that hides a lot: Houston 1389 to El Paso 1784 — a 28% span. If you are not near Dallas, treat the number as a starting point and run your own address through a modelling tool.

City-level figures for Texas

We have separately modeled production for 7 Texas cities, and they are 28% apart — Houston at 1,389 kWh per kW against El Paso at 1,784. Installed cost held at $2.25/W; paybacks use each city’s own utility tariff and export treatment where we have official EIA-861 data, which is why some differ sharply from this page’s state-average model.

• El Paso — 1,784 kWh per kW, payback about 10.3–19.7 years (on its own utility’s tariff)
• Lubbock — 1,682 kWh per kW, payback about 9.3 years
• Corpus Christi — 1,479 kWh per kW, payback about 10.5 years
• San Antonio — 1,457 kWh per kW, payback about 27.3 years (on its own utility’s tariff)
• Dallas — 1,455 kWh per kW, payback about 10.7 years
• Austin — 1,447 kWh per kW, payback about 17.8 years (on its own utility’s tariff)
• Houston — 1,389 kWh per kW, payback about 11.2 years

Those are real PVGIS-NSRDB location points, not the state figure scaled by guesswork. All Texas and other city figures .

Two adjustments matter before you apply this to your own roof:

• Shading and orientation. The 1,455 kWh figure assumes an unobstructed south-facing array. A real Texas roof — its own azimuth and pitch, a tree or a chimney — typically produces 10-25% less; this page models 90% of the ideal, so the 10,476 kWh/year above is already derated from 11,640. A genuinely unshaded south roof can adjust upward in the calculator.
• Year-to-year weather moves output by roughly ±5% either way.

How Texas compares with the other 49

Texas ranks 29th of 50 on electricity price and 23rd on annual output value per kW installed — close enough that its rate is a fair proxy for its solar case, which is not true everywhere. Its immediate neighbors on price are Oregon (16.0¢) just above and West Virginia (15.8¢) just below.

Florida is Texas’s closest comparable-rate analogue — 15.0¢/kWh, roughly 1,475 kWh per kW, and a payback within about a year of this one (10.6 vs 10.7 years). If you find Texas quotes hard to sanity-check, Florida numbers are broadly transferable.

The export question worth asking your Texas utility

Texas has no statewide export-credit requirement. What you are paid for surplus power — the export credit — is set by your utility or retail provider — REP solar buyback plans — not by state law, and it can differ between plans from the same provider.

So there is no single honest payback for Texas. There is a range, and which end you land on is decided by a contract term rather than by your roof:

Plans with no buyback are common, and the gap between the top and bottom row is 15.6 years on identical hardware — a battery is the one hardware change that moves you up this table. Get the buyback terms in writing before signing, and treat any quote that assumes full retail credit as the optimistic end until your own plan says otherwise. Whether a Texas buyer should own a battery or take a lease/TPO deal is priced in the battery buy vs. TPO calculator .

No statewide mandate. Terms are set by your retail electricity provider and differ between plans from the same provider.

One limit worth knowing: this reflects investor-owned, state-regulated utilities; Texas’s municipal utilities and co-ops are exempt in most cases and set their own terms.

What is actually left in Texas

The 30% federal credit ended for systems completed after December 31, 2025, so it is $0 here as everywhere. What remains is state, utility and local — and it varies far more than the federal rule ever did.

Texas has no state tax credit and no state rebate. What exists is a property-tax exemption (Tax Code 11.27, which you must APPLY for using Form 50-123) and utility-level rebates such as Austin Energy and CPS — those are utility programs, not state ones.

Tax exemptions

On sales tax: No residential sales-tax exemption. The franchise-tax exemption applies to businesses only.

Property tax is fully exempt on the added value, so the system does not raise your assessment. You must APPLY, using Form 50-123.

If that list looks thin, it is — the solar incentives hub shows which states still put real money on the table, and where Texas sits among them.

Is solar worth it in Texas at 15.9¢/kWh?

Texas is the interesting kind of case: an unremarkable 15.9¢ rate rescued by genuinely strong sun. At about 1,455 kWh per kW — well above the national planning figure — output volume compensates for what each unit is worth.

If you want a fast gut check before running the numbers above, the should-I-go-solar screener asks the four questions that matter most in a mid-rate state like Texas.

Two numbers put that in context. At Texas’s rate, the electricity an 8 kW system would produce is worth about $1,664 a year, so the system costs roughly 10.8 years of that output to buy outright — a simple division, before costs. The headline 10.7-year figure above is the full model: it additionally counts 2.5%/yr rate inflation, $150/yr of running costs and one inverter replacement, which is why the two differ slightly. And doing nothing is not free: 25 years of that same electricity, with rates rising at 2.5% a year, comes to about $56,839.

For a 15-year payback in Texas — given its sunshine rather than a national average — the electricity rate would need to be about 12.0¢/kWh. Texas is at 15.9¢, which is comfortably above that line.

Sources and method

• Electricity rate: U.S. Energy Information Administration, average price by state — EIA Table 5.6.A, July 2026 data (released Sep 2026). Rate shown is Texas’s residential average.
• Production: PVGIS v5.2 with the PVGIS-NSRDB radiation database, 1,455 kWh/kW for a five-point cluster around Texas’s largest metro, then the 90% real-roof factor; the assumptions, the ERA5 cross-check and the attribution are on the methodology page .
• Incentives: DSIRE — Database of State Incentives for Renewables & Efficiency, NC Clean Energy Technology Center. Verify current amounts and fund status before relying on them.
• Federal credit status: IRS, Residential Clean Energy Credit . See our 2026 energy tax credit guide .
• Payback model: shared with the solar savings calculator — 2.5%/yr utility inflation, 0.5%/yr degradation, federal credit $0.

Texas’s rate (15.9¢, EIA Table 5.6.A, July 2026 data (released Sep 2026)), export regime, production factor, installed cost and programs were last verified on 25 September 2026; Texas’s export credit resets on its tariff cycle and incentive budgets run out mid-year, so confirm current terms before acting. Not tax or financial advice.

Frequently asked questions

Sources: U.S. Energy Information Administration (EIA) electricity rates · DSIRE incentive records · public IRS/OBBBA guidance. Figures are modeled estimates, not quotes or tax advice. See our methodology.

States with a comparable tariff picture

• Why is my electric bill so high? — Splits a bill jump into weather, rate and usage — with Texas’s own EIA rate history built in.
• Time-of-use rate simulator — Entergy Texas’s RS-TOD — Residential Service - Time of Day schedule is preset from its own tariff sheet — see whether off-peak pricing beats your flat rate.
• Electricity rate tracker — Texas’s last 24 months of EIA rates, charted against the US average.
• Find your rate by ZIP — Texas averages hide utility gaps — look yours up from EIA-861 in three clicks.
• Net metering by state (2026 table) — Every state’s export regime with program, date and source — the rule behind Texas’s payback.
• Solar panel cost in Alabama — Same export regime at 16.4¢/kWh and a 18.6-year payback — the closest tariff comparison to Texas.
• Solar panel cost in Tennessee — Same export regime at 13.7¢/kWh and a 21.2-year payback — the closest tariff comparison to Texas.
• Solar panel cost in Wisconsin — Same export regime at 19.1¢/kWh and a 14.8-year payback — the closest tariff comparison to Texas.