generating solar energy from solar panels on home

Solar Energy For Your Texas Home – Three Options

When you talk about “going solar,” people immediately think they have to invest in rooftop solar. But there are three different ways to go solar in Texas.

  • Rooftop Solar Panels. Install rooftop solar panels on your home. Your solar payback will depend on the amount of sun your home gets, the size of the system, and solar buyback electricity plans in your area. You’ll want to carefully calculate the ROI for your solar panels.
  • Community Solar. Invest in local solar power projects in your community. In community solar, you buy “shares” in a solar project to offset your usage of carbon-based power.
  • Solar Energy through RECs. Select an electricity plan that includes purchase of renewable energy certificates from solar power projects in your area.

Below, we’ll explain in more detail, from the most expensive to least expensive approach.

Option 1: Rooftop Solar Panels for Your Texas Home

Buying solar panels for your home in Texas can be an expensive proposition, usually with a long term financing deal. Here are three questions to ask if you are considering rooftop solar for your home:

  1. How much will solar panels cost for my home?
  2. Are solar panels worth it for my home (return on investment or time for payback)?
  3. Can I make money with solar?

How Much Will Solar Panels Cost for My Home?

The cost of solar for your home will depend on the size of the system you install. System size will depend on what percentage of your power needs you want to satisfy, the size and type of roof, and the type of solar panels you select.

The Center for Sustainable Energy notes that the average residential size system (5kW) costs between $3 and $5 per watt generated, or $15,000 to $25,000, before tax credits and incentives.

You can get a custom proposal for your home solar panels by completing the form below. We’ll connect you with Freedom Solar Power, the number one SunPower dealer in Texas. They’ll contact you to schedule an appointment. Then an energy consultant will meet with you virtually or at your home. You’ll ge ta custom proposal with system size, design, cost, financing and estimated electricity bill savings.

Is Solar Energy Worth It For My Home?

Whether solar energy is right for your home depends a lot on where you live. And if you live in Texas, you’re in luck. Texas is one of the best states to install solar panels. That’s because we have 234 sunny days per year, which is about 29 days more than the national average.

Where you live determines the cost of electricity, which is a big factor in calculating your return on investment. It also determines the amount of incentives available, like tax credits and rebates. And lastly, where you live determines whether you can sell excess power back to the electrical grid (known as “net metering”).

Want to see the sun exposure opportunity in your area? Google it. No, we mean it! Use Google’s sunroof tool to estimate the solar opportunity in your neighborhood, based on rooftop sizes and sun exposure.

You’ll need to factor in the Residential Renewable Energy Federal Investment Tax Credit for solar home installations. Solar panel systems installed in 2022 are eligible for a tax credit of 26% of the cost of your system. Solar panel systems installed in 2023 will be eligible for a 22% tax credit.

And, if you live in the Oncor, AEP Texas West or AEP Texas Central utility markets? If you install a battery storage system when you install your solar panels, you could receive a rebate.

All of these things factor back into your return on investment for solar panels in Texas.

Time needed: 5 minutes.

How to calculate ROI for solar panels on your home.

  1. Total Cost of Solar Panel Installation

    Your solar panel installation size will be based on the size of your roof and the amount of electricity you use. A typical home solar energy system is 5kW, and costs around $20,000.

  2. Minus Federal Tax Incentive

    Systems installed in 2022 will have a 26% tax credit. For our typical home, that would be $5,200.

  3. Minus Local Incentives & Military Discounts

    Local solar energy incentives vary by state and utility. For our example, we’ll assume $1,000. And if you are active military or a veteran, you could qualify for an additional $1000 incentive if you work with our recommended provider.

  4. Calculate Net Solar Energy System Cost

    Total Cost of Solar Panel Installation minus Federal Tax Incentive minus Local Incentives. In our example, $20,000 cost – $5,200 tax incentive – $1,000 local incentives = $13,800 net solar energy system cost.

  5. Calculate Electricity Cost Savings

    Amount of electricity you will use from your system, multiplied by your rate per kilowatt hour.
    1) Unless you have a solar battery or a net metering agreement, any power you generate during the day that you don’t use immediately is wasted. Make sure you take your time of use into account!
    2) The current price you pay per kilowatt hour of power will change over time. To be conservative in your return on investment estimate, use your current price of power. And, don’t include the delivery cost, just the energy cost.

  6. Calculate Selling Power to the Grid

    Any excess solar energy that you generate can be sold onto the grid through net metering through a solar buyback electricity plan.

  7. Calculate Payback Period

    (Total net cost of solar energy system) divided by
    (Total annual value of electricity cost savings + Sale of power to the grid)

Hate math? Most local solar installation companies will work with you to calculate the payback on your solar energy system. That’s why we’ve partnered with Freedom Solar Power in Texas to get free ROI estimates for our customers. Just complete the form above.

How to Sell Solar Energy Back to the Grid (Net Metering)

If you set up a solar panel system at your house, chances are you’ll generate more electricity than your home uses during daylight hours. According to the Solar Energy Industries association, 20-40% of your solar power could go back to the grid.

Think of it this way. The sun is shining all day when you are away from home, at work or school. Then when you come home at dusk, you are turning on the TV, dishwasher, and air conditioning. So you are generating most of your solar power during the day, when you aren’t home to use it. Unless you have a battery storage solution at your home to store excess solar energy, the power would be wasted!

By participating in net metering, the excess power flows onto the grid and generates credits on your electricity bill.

Net Metering is the billing mechanism that credits you for any solar power that you add to the electrical grid. Customers are only billed for their “net” electricity usage. You receive credit for your electricity at the same rate you purchase electricity from your electricity company.

In Texas, you will need to buy a special type of electricity plan to sell power back to the grid. Shop for a Texas solar buy back plan.

Shop Texas Solar BuyBack Electricity Plans

Option 2: Community Solar Near You

Community solar is a great option for consumers when solar panels don’t make sense (or aren’t allowed by your homeowners association), but you still want to support renewable green power. Community solar is a small but growing opportunity to go solar in Texas.

What is Community Solar?

Community solar allows you to purchase “shares” in a solar power facility near your home. If you join a community solar project, you receive credit on your electric bill each month for the electricity produced by your share in the project. This is known as “virtual net metering.”

In net metering you receive credit for your excess solar power that’s added to the grid. In community solar, you receive credit for the solar power that your share in the community solar project generated.

For example, if you own a 1% share in the community solar project, you receive credit for 1% of the solar power that was produced.

Is Community Solar Available Near Me?

Community solar is very popular in the northeast markets and growing in Texas. Within Texas, TXU and Reliant Energy both offer community solar plans where the power you purchase directly supports a specific solar energy farm in your community.

You could also check out Arcadia Power. Under Arcadia’s unique model, you designate Arcadia as your billing company and give them access to your utility account information. Arcadia then matches you to a local community solar project.

Each month, Arcadia will apply a credit to your bill for your share in the project. They charge the net amount to a credit card that you put on file with your account. Then they settle everything out with your local utility company, so your account remains up to date.

Option 3: Solar Electricity Plans

The third way you can get solar energy is by buying a solar-focused renewable electricity plan from your retail energy provider. Retail Electricity Providers will buy Solar Renewable Energy Certificates, or SRECs, to offset your electricity usage. Or, a REP may invest in a solar farm in your area to generate your power. .

What is a Solar Renewable Energy Certificate?

A utility scale solar project or community solar project generates two income streams: Energy + SRECs.

A Solar Renewable Energy Certificate (SREC) is created that corresponds to every 1MWh (1000 kWh) of power generated from that solar power installation facility.

This certificate is sold to electricity providers separately from the power generated, making it a financial instrument.

How do SRECs Support Solar Energy?

So what does it mean when you buy a 100% solar energy electricity plan? It means your retail energy provider has purchased SRECS on your behalf to offset the amount of energy you consume.

While solar power will not flow to your home, consider your purchase of a a 100% solar renewable energy plan as a “vote” for solar energy. An active SREC commodity market is a green light to local developers and encourages more investment in solar resources.

Best Solar Energy Electricity Plans in Houston (Centerpoint)

Provider Plan Name Term Rate/kWh
TXU Energy TXU Energy Solar Saver 12 12 16.5 ¢ Details
Chariot Energy Solarize 36 36 16.7 ¢ Details
TXU Energy TXU Energy Free Nights and Solar Days 12 12 18.7 ¢ Details
Rhythm TX Shine 24 24 19.1 ¢ Details
TXU Energy TXU Energy Solar Value 12 12 19.5 ¢ Details
Chariot Energy Rise 12 (Solar Buy Back Plan) 12 20.7 ¢ Details
Reliant Energy Reliant Truly Free Nights 100% Solar 24 24 20.9 ¢ Details
Reliant Energy Reliant Truly Free Weekends 100% Solar 24 24 20.9 ¢ Details
Reliant Energy Reliant Truly Free Flex Days 100% Solar 24 24 20.9 ¢ Details
Green Mountain Energy Go Local™ Solar 12 Preferred 12 22.9 ¢ Details

Best Solar Energy Electricity Plans in Dallas (Oncor)

Provider Plan Name Term Rate/kWh
TXU Energy TXU Energy Solar Saver 12 12 14.9 ¢ Details
Chariot Energy Solarize 36 36 15.8 ¢ Details
TXU Energy TXU Energy Free Nights and Solar Days 12 12 17.2 ¢ Details
TXU Energy TXU Energy Solar Value 12 12 17.8 ¢ Details
Rhythm TX Shine 24 24 17.8 ¢ Details
Chariot Energy Rise 12 (Solar Buy Back Plan) 12 19.7 ¢ Details
Reliant Energy Reliant Truly Free Weekends 100% Solar 24 24 19.9 ¢ Details
Reliant Energy Reliant Truly Free Nights 100% Solar 24 24 19.9 ¢ Details
Reliant Energy Reliant Truly Free Flex Days 100% Solar 24 24 19.9 ¢ Details
Green Mountain Energy Go Local™ Solar 12 Preferred 12 22.5 ¢ Details

Search All Texas Electricity Plans with Solar Energy


Want to learn more about solar power? Here are some additional resources:

  1. Guide to understanding solar:
  2. Solar Explained:

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