Is Solar Worth It in Texas? Cost and Payback
How much do solar panels cost in Texas, and how long until they pay back? See Houston payback by price per watt and export credit, with clear assumptions.
Published 4 min readRoofPayback editorialChecked by automated fact and quality checks
Official data: EIA · DOE · IRS · how we check
In this article · 8 sections
Short answer
Solar can be worth it in Texas, but the answer depends on your price per watt, your utility's credit for extra power, and how much you use. In our example home using Houston sunshine, payback is 14.3 years at full export credit. That is close to Florida (14.1 years) and Arizona (13.9 years), and much slower than California (7.4 years).
Texas has strong sun and a below-average electricity price. That mix gives a middle-of-the-pack result: good output, but modest savings per kilowatt-hour (kWh, the unit your bill uses).
The example home and its assumptions
All numbers here come from one example. It is not a quote for your roof.
- 7 kW system, south-facing, 20° pitch, 14% losses
- 10500 kWh of use per year, with 40% of use while the sun is up
- Installed cost of $3500 per kW ($24500 total), no incentives
- $100 per year maintenance
- Electricity price rising 2.5% per year
- Panel output falling 0.5% per year
- 25-year horizon
- Export credits capped at a year of grid purchases (annual true-up)
Production comes from PVWatts, a free solar estimator from the U.S. Department of Energy's National Laboratory of the Rockies. Prices come from the U.S. Energy Information Administration (EIA).
What Texas sun and prices look like
For Houston, PVWatts gives 1421 kWh per kW per year. The EIA reports an average Texas residential price of 15.91¢ per kWh for August 2026, up from 15.4¢ a year earlier (a 3.3% change). The U.S. average was 18.16¢.
With those inputs, year-1 savings in the example home are $1583 at full credit. For price context, see our Texas electricity prices page and the wider explanation of why prices differ by state.
Payback depends on what you pay per watt
Installed price moves the result more than almost anything else. Using the same Houston example:
| Installed cost | Total for 7 kW | Payback (full credit) |
|---|---|---|
| $2500 per kW | $17500 | 10.6 years |
| $3000 per kW | $21000 | 12.5 years |
| $3500 per kW | $24500 | 14.3 years |
Berkeley Lab reports a median installed price of $4.0 per watt for host-owned residential systems installed in 2024, with a 20th to 80th percentile range of $3.0 to $5.2 per watt (2024 dollars, before incentives). Cash-purchased systems had a median of $3.5 per watt and loan-financed systems $4.7 per watt. Your own quotes may be higher or lower, so compare several. Our cost per watt guide and loan vs. cash guide explain the difference.
Export credit terms change the result
Most of the time, your panels make more power than your home uses at midday. The extra goes to the grid. How your utility pays for it matters a lot.
| Credit for exported power | Example payback (Houston) |
|---|---|
| Full credit | 14.3 years |
| Half credit | 19.2 years |
| Quarter credit | 23.1 years |
Texas has many retail electricity providers and utilities, and buyback plans differ. Some plans credit exports at close to the retail rate. Others pay much less. Ask for the exact buyback terms in writing before you sign, and check the program database at DSIRE. Read our net metering vs. net billing guide to see how these terms work.
Texas cities: Houston, Fort Worth, El Paso, Lubbock
Readers often search for solar panel costs in Fort Worth, El Paso, and Lubbock. We only calculated one reference city for Texas, Houston, so we do not give separate payback numbers for the others. West Texas generally gets more sun than the Gulf Coast, which tends to raise output per kW, but we have not run those cities here.
You can run your own address in the solar calculator, which lets you adjust cost, use, and credit. See our Texas solar page for the state summary.
Other things to check
- Tax credit. The 30% federal Residential Clean Energy Credit (Section 25D) is not available for property placed in service after December 31, 2025. Our example assumes no incentives. See solar without the tax credit.
- Daytime use. The more power you use while the sun is up, the more you keep at full retail value. Read daytime electricity use.
- Rising prices. Higher rates shorten payback. See payback if prices rise.
- Degradation. Panels lose a little output each year, which our example includes.
Bottom line
Texas solar is a reasonable but not spectacular investment in our example: 14.3 years at $3500 per kW with full credit, or 10.6 years at $2500 per kW. A weak buyback plan can push payback past 23 years. Get several quotes, read the export credit terms closely, and test your numbers in the solar calculator. This is general information, not financial or tax advice.
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