Although Texas is by far, the largest oil-producing state in the U.S., Texans seem to have fallen in love with solar panels for solar power Texas. Although Texas was a tad behind the curve relative to solar installations until recently, today, they are fourth in the country behind only California, Arizona, and North Carolina. Texas is poised to become a national leader over the next five years as the state removes market barriers, and more residents recognize solar power’s benefits.
According to the Texas Solar Energy Society, Texas Ranks #1 of All States in Solar Energy Potential
Texas ranks in the top five percent nationally, with 2,850 hours of sunlight each year. The largest of the contiguous forty-eight states, the geography of Texas, features a vast east-to-west expanse. As you can see below, the state enjoys excellent solar capabilities, particularly in the western portion of the state. Texas has significant renewable energy capabilities, a virtually untapped solar reservoir. This makes generating power from panels quite feasible in Texas.
Reprinted from the National Renewable Energy Lab
A Quick National & State Overview of Solar Power
The Solar Energy Industries Association tells us that in 2019 the U.S. installed 13.3 gigawatts (GW) of solar photovoltaic capacity to reach 77.7 GW of total installed capacity. That’s enough energy to power some fourteen and a half million homes in America. Last year, solar accounted for forty percent of all new electric generating capacity added to the grid – more than any other energy source and the highest share in the industry’s history..
As impressive as the above may sound, solar still accounts for only 1.8% of the electricity generated in the U.S.
- Fun fact: Throughout this article, we will refer to kWh, MWh, and GWh. To make this easier to understand, one kilowatt-hour (kWh) is the energy consumed by a 1,000-watt or 1-kilowatt electrical appliance operating for one hour. A megawatt-hour (MWh) equals 1,000 kWh, and a gigawatt-hour (GWh) equals 1,000 MWh. Simple?
The SEIA estimates that one megawatt can supply, on average, 164 U.S. households. Due to Texas’ hotter than average climate, each megawatt of solar serves only 115 homes in Texas.
Solar Power Texas Stats
Texas has installed enough solar capacity to power close to 500,000 homes, making it the fourth-largest solar state in the country. However, as we all know, Texas is big, with over 7.4 million households. Only 1.1% of the state’s electricity generation is from solar. Texas solar capacity is expected to grow by another 6,409 MW over the next five years as fossil fuel, and natural gas plants are retired.
Another interesting fact is that solar investments generate significantly more local jobs, about three times as many direct and indirect jobs as comparable investments in fossil fuels. Consider that 1.1% of the state’s electricity from solar creates over 10,000 positions in the state.
Why Consider Solar for Your Home or Business in Texas?
Some large Texas businesses such as Campbell’s Soup, FedEx, and Applied Materials already use solar power to either augment or replace their grid usage. For residents, solar is becoming more of an economic choice versus a socially responsible, environmentally friendly lifestyle statement. We will delve into solar costs and trends, return on your solar investment, and how solar impacts your home’s resale value in Texas. We’ll illustrate that there is minimal financial downside or risk in solar investment.
There are numerous advantages of installing solar panels in Texas. First, there is a high amount of radiant energy emitted from our 2,850 hours of sunlight. if you live in an area where net metering is offered, the production from your system could save you a small fortune on your electric bill. Along with other Federal and local solar incentives, the state also exempts the total appraised value of your solar system from your property taxes.
In short, there is minimal financial downside or risk in solar investment. Your solar system extracts free energy from the sun, has few or no moving parts, so there is minimal maintenance, and systems have an operational life of twenty-five years or more.
Solar Installation in Texas – The Financial Facts
Solar costs are less than the electricity supplied by coal or natural gas. And, since solar photovoltaics is a technology, and renewable, versus fossil fuel, this gap will widen. Solar energy is exceptionally affordable as the cost of installation has been steadily declining over the past few years. In Texas, prices have fallen 38% over the last five years as the state is developing into a solid solar market.
The Cost of a Solar Installation in Texas
In 2020, the average cost of a typical 5 kW solar system is $16,442 before the federal solar credit for low-end products – but expect to pay more for higher-value better performance HJT panels. After claiming the 26% federal solar credit, the net price is $12,167, which is still subject to further rebates at a local level. See the table below for the details regarding additional installation sizes:
The Financial Benefits of a Solar Installation in Texas
Using the 5kW system example, the cost after federal incentives is still a substantial expenditure at $12,167. Now, let us look at the cost mitigation, payback period, and long-term return on your solar investment.
Using an average cost of $2.58 / watt on your 5kW system, it will take seven years, on average, to pay back your initial investment. The Levelized cost of solar energy is $.05 per kWh – versus $.25 per kWh without solar. If you use an average of 17,950 kWh per year, your cost will be $4,489.50 without solar, but only $897.90 with solar! Based on an operational life of only twenty-three years, your life savings will be over $85,000.00.
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The Sooner You go Solar; Greater the Federal Tax Credits
You may have heard that tax credits ended in 2019. Not so. As you will see in the following segments, Texas offers a tax incentive by excluding the cost of your solar system from your property taxes. Other local governments and energy providers also have incentive programs. Below is an overview of the Federal Tax Credit Program for 2020 onward:
Long-Term Return on Investment of Solar
A lifetime savings of $85k on a $12,000 investment is appealing. However, let’s say after enjoying your annual savings of $3,591 for four years, you decide it’s time to move to a larger home or downsize. In effect, the monthly savings on your electric costs have already recouped your initial investment.
Savvy residential real estate experts tell us that each watt of solar adds about $4.00 to a home’s value. In our 5kW system example, your home with solar should sell for about $20,000 more than your neighbor’s house without solar. You recoup your initial outlay in mitigating electricity costs while you own the home, and profit on the system when you sell the home. That’s a significant return on investment.
Texas is somewhat unique in that electric utilities are deregulated, making it possible for residents in most cities to choose which retail electric provider they use. As a result, solar incentives vary by locale – in cities such as Austin, El Paso, and San Antonio, utility incentives and rebates are available, as are net metering programs offered by providers, making savings and ROI even more attractive.
Net Metering in Texas
If your utility has a net metering policy, you receive credits on your electric bill for the extra electricity your solar panels produce. When your panels don’t provide sufficient electricity to meet your requirements, you draw on your net metering credits instead of buying power from the utility.
Additional Benefits of Panels for Power in Texas
Perhaps the most significant benefit of panels for power versus fossil fuels is that solar is cleaner and reduces your carbon footprint. Renewable energy creates no local air pollution, improves public health, and fights climate change.
- Provides energy independence
- Job creation to support the local economy
- Sustainable energy enhances the reliability of the grid
- Reduces dependence on the volatility of fossil fuel future costs
Creating your personal solar power is more efficient – you use the energy where it is generated, reducing losses in transmission.
Solar Rights Law in Texas
Many residents that live in a neighborhood governed by a homeowners’ association (HOA) worry their association’s Covenants, Conditions, and Restrictions (CC&Rs), will restrict your ability to go solar. Fortunately, Texas, like many states, has a solar rights law that prevents HOAs from banning solar energy systems. In Texas, you can go solar with confidence.
PEP Solar Providing Solar Panels in Texas for Power
PEP Solar is a full-service solar company. We have been installing, servicing, and repairing solar for homeowners and businesses since 1981. We have a dream for real change in Texas by going green and helping to make the world a better place, starting with you and your community. Save money, protect our state, and help our communities thrive. Our mission has always been to provide complete residential and commercial solar power solutions that perform beyond your expectations for the life of your system.
Let us help you become a “prosumer,” a homeowner that both produces and consumes solar energy. For more expert information on all things solar, visit us online at pepsolar.com or contact us at: (623)806-8806