Solar installation isn’t cheap but it can produce a high return on investment. You will save money on electricity bills and add value to your home. You can also cash in on tax credits and incentives.
Solar is a particularly good investment in the sunny state of Texas. Texas offers plenty of sunshine and several incentives. Read on to find out how to maximize the ROI on your installation and find the best solar companies in Texas.
What are Texas Solar Incentives?
Texas households that go solar are eligible for a property tax exemption. The exemption is equal to 100% of your property tax value including the assessed value of your solar system. The exemption is offered annually for as long as you own your solar panels.
Eligible households will not see an increase in their property tax due to an increase in their home’s value. For example, if your home is worth $350,000 and you install a $25,000 solar system, your property tax will still be assessed on a $350,00 home value, not a $375,000 home value.
Local Solar Exemptions
You may be eligible for more exemptions depending on where you live in Texas. Here are some that may be available.
CenterPoint Energy Residential: This program offers incentives for contractors and homeowners that work together to make energy-efficient home improvements.
AEP Texas SMART Source Solar PV Program: This program services the AEP Texas service territory. It provides up to $3000 in savings for homes with solar systems up to 30 kW.
Austin Energy Solar PV Rebate and Incentives: This Austin-based program offers up to $2500 in savings for homes with at least 3kW installed capacity. You must also take a solar course to qualify.
Talk to your utility company to learn how to qualify and ensure you’re not missing out on any incentives.
Net Metering
Net metering offers another way to save on your Texas solar installation. It credits you for the unused energy you send back to the grid. The credits can be applied as savings to your energy bills.
Texas does not have a statewide net metering policy, but many utility companies offer this service. Talk to your utility company to determine if you are eligible for net metering in your area.
The Federal Solar Tax Credit
The Federal Solar Tax Credit is a nationwide program offered by the federal government. It allows you to reduce your taxable income by 30% of your solar panel and installation value.
If you had $100,000 in taxable income and installed solar panels worth $25,000, you would be eligible for a credit of around $8300. Your taxable income would go down to $917,000 so you would pay less in taxes.
Note that the federal solar tax credit is set to reduce to 26% in 2033 and 22% in 2034 before phasing out completely. Go solar sooner rather than later to take advantage of the available credit. Talk to a tax professional to ensure you qualify.
How Much Can You Save When You Go Solar in Texas?
Texas has favorable sunny conditions. According to the World Bank Global Solar Atlas, it ranks second in the United States for solar power.
U.S. Energy Information Administration data reveals that Texas residential customers pay an average electric tariff of 14.26 cents per kWh of power. Most 6kW systems will generate 4800 to 10,800 of energy per year. With those numbers, Texas residents can save over $200- $2400 in electricity expenses annually.
Incentives also help residents save. A 2022 National Renewable Energy Laboratory (NREL) study shows that most United States solar systems have a market price of $2.95 per watt. That means a typical 6kW installation costs an average of $17,700 each year. That equals a credit of $4,410 on your annual taxes.
Additional incentives can save you thousands more. For example, the AEP Texas SMART Source Solar PV Program would knock another $3000 off your taxable income. These savings can add up considerably.
Increased Home Value
Texas solar homeowners will also profit from solar with increased home value. Buyers will pay more for homes with a solar installation because they know it will save them money. It is a big selling point in the Lone Star State.
So how much will your home value increase? It depends on local electricity rates, the solar market, and the condition of your system. According to Energy.gov solar power installation can improve home values by as much as $15,000.
A 2021 Zillow report showed that 67% of buyers consider energy efficiency to be a major factor in their home-buying decision. A study conducted by the U.S. Department of Energy’s Lawrence Berkeley National Laboratory showed some buyers are willing to pay as much as $15,000 more for a home with solar power. You will save money while you live in your home and when you sell.
Is it Worth it to Rent?
Renting solar panels will help you save money on your electric bill. It will also allow you to avoid the expenses of solar installation.
However, you won’t qualify for the federal tax credit and other incentives. You will also not see an increase in home value. The solar company will take back your panels when you sell.
You may also consider a PPA which involves paying per kilowatt hour rather than a fixed monthly amount. However, both options have similar outcomes. They won’t increase your home value or qualify you for credits and incentives.
Other Benefits of Going Solar in Texas
Solar goes beyond financial benefits. Homeowners who go solar will also see the following advantages.
Environmental Benefits
Solar does not rely on fossil fuels that pollute our atmosphere and are becoming increasingly scarce. It is infinitely renewable and will never run out. It also does not contribute to climate change.
It reduces air pollution that can harm the environment. It does not require water making it a water-saving solution. It operates silently so it does not contribute to noise pollution which can disturb wildlife and cause them to flee their natural habitats.
Provides Energy Independence
Texas sees a lot of storms. According to the National Weather Service, the state averages 137 tornadoes each year making it the most tornado-riddled state in the nation.
The state is also no stranger to hurricanes. The average annual rate of Texas hurricanes and tropical storms is 0.8. This means Texans will experience three or four tropical storms every four years. Florida is the only state in the U.S. with more hurricane occurrences.
And let’s not forget the unexpected Texas freeze of 2020 which left many Texans without heat or power.
Solar provides a solution. It generates power when the grid is down. You can also use solar storage to access energy when the sun isn’t out.
In addition to convenience, solar’s reliability also adds to cash savings. Texans that can remain productive during a storm or recovery period can continue to run their business. They will experience fewer losses related to the outage.
How the Best Solar Companies in Texas Can Help
The right contractors can help you get the most out of your solar energy system. They will help you find high-quality panels that provide efficient energy for your home. They will assist you in finding products that offer optimal value considering your energy needs.
Contractors will also position panels to ensure they capture optimal sunlight in powering your home. They will provide a reliable installation that withstands the test of time. They will offer use and maintenance tips that help you get the most out of our panel.
Your contractor can also help you cash in on valuable credits and incentives. They will let you know what’s available in your area. They will provide you with the paperwork and equipment you need to qualify.
In some cases, you may not qualify for incentives unless you use a qualified contractor. Consider what incentives they offer before starting work. Look at customer reviews and ask questions to ensure you are working with a contractor you can trust.
Solar America Will Connect You with the Best Solar Companies in Texas so You Can Make the Most of Your Investment
Solar America will help you find contractors that help your dollar go farther. Enter your information and our database will come back with a list of the best solar companies in Texas. You can review each to determine their quality of service and how much you can save considering incentives and other factors.
Contractors who partner with us know they are competing against their peers. They are prepared to provide the lowest rates possible. They want to win your business.
Sign up today to learn how we can help your dollar go further.
