When is solar worth it in Texas?
Solar pays best when most of these are true. The more boxes you check, the better your odds.
- 1Open the free PVWatts calculator
It’s run by the National Laboratory of the Rockies (formerly NREL), a federal lab. Oncor uses it to set its solar incentives. Open PVWatts.
- 2Enter your address and system size
Use the size from your quote, and set the direction your roof faces.
- 3Bring the yearly kWh back here
Type it into the payback calculator below to see your real payback.
Why does solar take longer to pay off in 2026?
The 30% federal credit paid for almost a third of a system. The IRS says it isn't available for property placed in service after December 31, 2025.
An example only. Bars start at zero. Your payback depends on your price, usage, roof and buyback plan.
Homes in Austin Energy’s service area paid about $3.27 a watt in 2025, its rebate records show, so a typical 8 kW system there runs about $26,000. Some utilities still help: Austin Energy pays a $4,000 rebate, and Oncor’s 2026 program pays installers, with or without a battery. See what solar costs in Texas and every incentive in Texas solar incentives.
How much does each solar kWh save me?
It depends on where the power goes. Power you use at home saves your full price. Extra power sent to the grid earns whatever your buyback plan pays.
Bars start at zero. 15.88¢ is the Texas average price (EIA, July 2026). AEP Texas warns that some electric companies pay nothing for extra solar power, so check a plan’s fact label first.
Bars start at zero. Example: 12,000 kWh a year, 60% used at home, the 15.88¢ Texas average price (EIA) and $3.27 a watt (Austin Energy, 2025). Try your own numbers below.
That's why the buyback plan matters so much in Texas. Compare plans in our solar buyback plans guide, and check what a fair price per kWh is. Not sure you can pick a plan? Use our utility finder.
Be careful with big lifetime-savings claims in ads. They depend on guesses about your price, your buyback plan and future rates, so run your own numbers below. A battery can also store midday power for the evening; see is a home battery worth it?
Will solar pay off for my Texas home?
Use the numbers from a real quote if you have one. The starting numbers are examples. No 30% credit is applied, because it's gone for 2026 installs.
Cost: $26,160. Yearly savings: about $1,383. Over 25 years: about $8,400 ahead.
A buyback plan that pays your full 15.88¢ for extra power would save you about $522 more a year.
Production comes from yuor quote. Savings assume today's prices with no rate increases, no panel wear and no loan costs. Not financial advice.
Should I buy, finance or lease solar?
How you pay changes the math as much as the panels do.
Cash usually saves the most over time. Loans add interest, and some loan quotes hide a dealer fee in the price, so ask for the cash price too.
No upfront cost, but you pay for 20 years or more, often with yearly price increases. See the catch with free solar.
What does the new Texas solar sales law do?
Senate Bill 1036 took effect September 1, 2025. It covers solar sales and leases, and it gives you real protection.
- 15 business days to cancel
Every solar contract must let you cancel within five business days, with no penalty.
- 2Your loan cancels too
If the seller works with or referred you to a lender, the contract must say that lender cancels the loan too.
- 3Sellers must register
Since September 1, 2026, most solar sellers and salespeople must be registered with TDLR. Licensed electrical contractors are exempt.
- 4Real penalties
A court can fine a seller up to $2,500 per violation, or up to $10,000 if the victim is over 65.
What should I ask before I sign a solar contract?
Five questions that catch most bad deals.
- 1"What's the price per watt?"
Total price divided by system watts. Austin homes averaged $3.27 in 2025. Under $3 is strong; over $4, ask why.
- 2"How much will it produce?"
Ask for the yearly kWh estimate and a shade report for your roof.
- 3"What buyback rate did you assume?"
Savings that assume a 1:1 plan won't hold on a low buyback plan.
- 4"Does my roof need work first?"
Removing and reinstalling panels later costs extra. See roof costs.
- 5"Are you registered with TDLR?"
It has been required since September 1, 2026. Then score the company yourself in 2 minutes.
Is solar worth it? Questions, answered
Is solar worth it in Texas in 2026?
It can be, especially for homes with big bills, sunny roofs with years of life left, and a good buyback plan. With the 30% federal credit gone for 2026 installs, payback takes longer, so run your own numbers with a real quote before you sign.
How long does solar take to pay off in Texas?
It varies a lot. In our example, a $26,000 system saving $1,800 a year pays off in about 14.4 years without the credit, compared with 10.1 years when the 30% credit applied. Your price, usage and buyback plan change the answer.
Does my buyback plan change solar payback?
Yes, a lot. In our example, the same $26,160 system pays off in about 13.7 years on a plan that credits extra power 1:1. It takes 18.9 years at 5¢ a kWh and 22.9 years with no buyback. Compare plans in our solar buyback guide.
How much can solar save me a year in Texas?
It depends on how much power your panels make and where it goes. In our example, an 8 kW system making 12,000 kWh a year saves about $1,383. That’s $1,143 on power used at home at 15.88¢, plus $240 for extra power sold at 5¢. A 1:1 buyback plan would raise it to about $1,906.
Can I cancel a solar contract in Texas?
Yes. Since September 1, 2025, Texas law requires every residential solar sales or lease contract to let you cancel within five business days without penalty. If you cancel and the seller works with or referred you to a lender, the contract must say that lender cancels the loan too.
Is my roof good enough for solar?
It is if it gets sun most of the day and has years of life left. A roof that faces south or west, with little shade from trees or buildings, works best. If yours needs replacing soon, do that first. Taking panels off and putting them back later costs extra.
Is it better to buy or lease solar?
Buying with cash usually saves the most over time, and a loan works if the rate is low. Leases and power purchase agreements cost nothing up front, but you pay for 20 years or more, often with yearly increases, and you don't own the panels.
Will solar get rid of my electric bill?
Usually not completely. You'll still buy power at night and on cloudy days, and you'll still pay your utility's delivery charges. Solar shrinks the bill; a good buyback plan helps shrink it more.
Do solar panels work during a Texas power outage?
Not by themselves. For safety, most grid-tied systems shut off when the grid goes down. To keep power during an outage, you need a battery. See whether a home battery is worth it and what to do when the power goes out.
What makes solar a bad deal in Texas?
A small bill, a shady roof or a roof that needs replacing soon. So can a plan that pays little or nothing for extra power, or a loan with a high rate or a hidden dealer fee. In our example, no buyback alone stretches payback to about 23 years.
What do you want to do next?
Every Texas guide, by topic
Browse every guide on the Texas hub. Or see every state's average price on our price map.
Sources and updates
Sources (17)
- Internal Revenue Service, Residential Clean Energy Credit: not available for property placed in service after December 31, 2025.
- Texas Department of Licensing and Regulation, Residential solar retail sales now regulated by TDLR (September 3, 2025): the five-business-day right to cancel under SB 1036, and where to file complaints.
- Texas Department of Licensing and Regulation, Residential Solar Retailers at a glance: covered sales and leases, and registration beginning September 1, 2026.
- Texas Legislature, SB 1036, 89th Legislature: the solar sales law, including the right to cancel, lender cancellation and penalties.
- Austin Energy, Austin Energy Solar Programs (October 20, 2025): a 2025 residential average of $3.27 a watt without storage.
- Lawrence Berkeley National Laboratory, U.S. Distributed Solar and Storage, 2026 Data Update: 2025 home system sizes and prices nationwide.
- U.S. Energy Information Administration, Electric Power Monthly, Table 5.6.A: the Texas average residential price of 15.88¢ per kWh, July 2026.
- AEP Texas, Solar energy: electric companies set buyback terms, some pay nothing, and most solar panels shut off during an outage.
- National Laboratory of the Rockies (formerly the National Renewable Energy Laboratory), PVWatts Calculator: estimates the yearly output of a solar system at any address.
- Oncor, 2026 Solar Program Manual: home options with and without storage, and incentives calculated with PVWatts.
- Austin Energy, Power Up with Sunshine (August 24, 2026): the $4,000 home solar rebate.
- Texas House Research Organization, Solar energy in Texas (2010): Texas ranked first in the nation in solar resource potential, according to the State Energy Conservation Office at the time.
- Texas Legislature, Tax Code, Chapter 11 (Section 11.27): the property tax exemption for solar energy devices.
- Texas Comptroller, Form 50-123: the application for the solar property tax exemption.
- TXU Energy, Solar Buyback System Flex fact label, Dallas, October 5, 2026: a 1:1 buyback rate.
- Champion Energy, Solar buyback rate history: average wholesale credits, July to September 2026.
- Constellation, 24 Month Residential TOU Rate fact label, Dallas: does not buy excess generation.
Changelog · last updated October 16, 2026 · 4 updates
- October 16, 2026: We now score 25 Texas electricity companies, so the buyback note and the “Up next” link now say the 1:1 finding covers the 10 companies whose solar plans we compared on October 5, 2026. No figures changed. We also added our new city guides, four new company reviews and the Smart Meter Texas guide to the guide map. Corrected the seller fines, registration exemption and lender-cancellation wording to match Senate Bill 1036, labeled the $3.27 a watt price as Austin Energy’s, dated the solar-potential ranking and used the National Laboratory of the Rockies’ new name.
- October 13, 2026: Moved to theday.company/tx/are-solar-panels-worth-it; the old address forwards here. Added a quick decision box, a date alert and a yearly buyback line in the calculator and next-step links. Tightened the short answer, swapped four answers that other guides cover in depth (net metering, the tax credit, property tax and waiting on prices) for answers on yearly savings, buyback plans, roofs and bad deals, and updated the seller registration date. No figures changed.
- October 5, 2026 (evening update): Added current buyback figures from the 10 companies we’ve scored, an “Up next” link to our 10-company solar buyback comparison, and all 10 company reviews in the guide map.
- October 5, 2026: Guide published: when solar pays in Texas without the federal credit, what each solar kWh saves, how the buyback plan changes payback, buy versus lease, the SB 1036 sales law and a 2026 payback calculator.
How to cite this page: The Day Company, "Are solar panels worth it in Texas in 2026? The honest math", updated October 16, 2026, https://theday.company/tx/are-solar-panels-worth-it.
Payback figures are illustrative and depend on your price, usage, roof, production and buyback plan; this is not financial or tax advice. Prices come from Austin Energy’s 2025 rebate records. Legal details summarize SB 1036 and TDLR guidance. The Day Company is not affiliated with any installer, utility or electric company named here.