Texas Solar – All You Need to Know 

Texas is the 2nd largest solar market in the US in terms of installed capacity, surpassed only by CaliforniaBy the end of 2024, the Solar Energy Industries Association reported 41,460 megawatts (MW) of solar generation in Texas, enough to provide electricity for 4,966,507 homes.

Texas installed more solar PV capacity than any other state in 2024, adding 11,627 MW to the ERCOT grid. In comparison, California was in 2nd place with 4,961 MW installed, while Florida was 3rd with 4,730 MW. Solar power is growing very fast in Texas, and this is reflected in the data reported by the SEIA during the last three years:

• 4,898 MW in 2022
• 11,728 MW in 2023
• 11,627 MW in 2024

Solar technology has also been a driver of investment and job creation in Texas. According to the SEIA, the solar industry reached a cumulative investment of $50.1 billion statewide by the end of 2024. Solar investment in 2024 alone was $14.4 billion, representing nearly 29% of the cumulative total.

The SEIA identified 592 solar companies in Texas at the time of its latest report, including 107 manufacturers and 222 installers and developers. The SEIA also reported 12,421 solar jobs in the Lone Star State, with 290,194 photovoltaic installations completed by the end of 2024.

The growth potential of the Texan solar industry is considerable. In spite of the record-breaking figures reported for 2023 and 2024, solar power only accounts for 7.83% of Texas’ electricity. According to SEIA estimates, the state could deploy an additional 41,045 MW during the next five years, doubling its current solar capacity.

How Much Do Solar Panels Cost in Texas?

Based on April 2025 industry data from EnergySage, Texan homeowners can expect to pay between $8,846 and $11,968 for a 5-kW solar system, with an average cost of $10,407 before incentives. In other words, the average installed cost of a home solar system in Texas is $2.08 per watt. After claiming the 30% Investment Tax Credit, the net cost of a 5-kW solar system decreases to $7,285.

These cost figures are useful as a starting point if you’re considering solar panels in Texas, but keep in mind that prices vary depending on property conditions and location. To get an accurate quote that meets the needs of your home, the best starting point is a professional assessment from a qualified solar installer.

The US Energy Information Administration provides updated information about electricity costs in each state, and this can be used to estimate the potential savings of solar panels.

In the case of Texas, the average residential electricity rate was 14.89 cents/kWh as of February 2025. If you have a 5-kW system with an output of 7,000 kWh/year, you can expect to save over $1,000/year.

Home Solar Systems and Texas Payback Programs

Net metering is a major incentive for solar power, especially in homes that are mostly empty during the day. With net metering, surplus solar electricity that is not consumed at the time of production can be exported to the local grid, and you get a power bill credit in return.

Solar buyback is a closely related concept, where your electricity provider purchases surplus energy from your solar panels at a specified price. The term “net metering” is normally used when you get the full value of each kilowatt-hour, while “solar buyback” is a more general term that also covers programs with partial credit for each kilowatt-hour.

Texas does not have a statewide net metering law, but several electricity providers and municipal utilities offer the benefit for solar owners. If you want to learn more about net metering and solar buyback programs in Texas, we have a detailed guide that covers them.

PACE Loans for Solar Power in Texas

Property Assessed Clean Energy (PACE) is a financing option for home upgrades that improve energy performance, and this includes solar panels. PACE loans normally offer a low interest rate, combined with a repayment period of 10-20 years. This means you can go solar at zero upfront cost, and pay for the system over time with the savings achieved.

PACE loans also have a major advantage over traditional loans: The loan is bound to the property where it is used, not the owner, and payments are charged along with property taxes. This means a PACE loan can be easily transferred when a home is sold.

PACE loans have been enacted by law in Texas. Due to the nature of these loans, they must be enabled by state governments before they can be offered to homeowners and businesses.

A Snapshot of Texas’ Electric Sector 

Texas has a deregulated energy market operated by ERCOT, with electricity prices below the US average. The following table compares kilowatt-hour prices by market segment, considering Texas and the US in general.

Market Segment	Texas kWh Price	US kWh Price
Residential	14.89 cents/kWh	16.44 cents/kWh
Commercial	8.64 cents/kWh	13.09 cents/kWh
Industrial	6.03 cents/kWh	8.23 cents/kWh

Texas is by far the largest producer of oil and gas in the US. In 2023, the Lone Star State provided 43% of the country’s crude oil, and 27% of marketed natural gas. Texas not only has the highest fossil fuel production, but also the highest electricity output. The state generated 13% of US electricity in 2023, roughly two times the output of Florida in 2nd place.

In October 2024, the US EIA reported a net summer capacity of 155,010 MW for Texas, which represents 13% of nationwide installed capacity.

• Natural gas is the main source of electricity, accounting for 50% of generation.
• Texas has been the leading wind power state for nearly 20 years, with 28% of nationwide wind output in 2023.
• Wind energy surpassed nuclear power in 2014, and coal power in 2019. Wind turbines currently provide around 22% of the state’s electricity.

The Lone Star State also has the highest energy consumption in the US, and the 6th-highest per capita consumption. The industrial sector accounts for more than half of consumption: Texas is home to many energy-intensive facilities such as refineries and petrochemical plants.

The state’s population of 31.29 million also contributes to a high demand for energy, but the residential sector only represents 1/8 of energy usage. Considering only residential consumption, Texas is among the top 20% most efficient states. Around 60% of Texan households use electricity as their main energy source for space heating, but peak demand tends to happen in the summer due to air conditioning.