Going solar in Texas: worth it or not?

Electricity prices in Texas have gone up 70% since 2021. Because of inflation, war, and the need for infrastructure upgrades, Texans should plan for ongoing price shocks. Going solar can help.

Photo of Austin, Texas
Austin, Texas – Carlos Alfonso/unsplash

Texas likes to do things differently, and that extends even to esoteric areas like its electricity grid.

Unlike other places in the country, the Lone Star state is truly alone when it comes to electricity. Texas isn’t connected to other regional grids, so when it’s short of electricity, it doesn’t have the ability import it from elsewhere.

Because of this, Texas has suffered recent blackouts as extreme weather has become more common.

This has caused a lot more Texans to become interested solar. Not only does solar protect you from utility rate increases, but it can keep your home powered even when the rest of the grid is dark.

Solar isn’t for everyone, but Texas does have some advantages that can make going solar a good choice for your home. Read on to learn more.

A very quick crash course on the Texas electric grid

North America doesn’t have a single electric grid, but instead has a patchwork of regional grids. In states with deregulated wholesale electricity markets, these regional grids are operated by organizations known as RTOs and ISOs.

The Texas electricity grid is operated by an ISO known as the Electric Reliability Council of Texas (ERCOT). Unlike other regional grids, ERCOT doesn’t have extensive transmission line connections with other grids.

For example, where I live in New York, the regional grid operator (NYISO) can buy or sell electricity from neighboring Pennsylvania, Massachusetts, and Quebec as needed to meet its needs or when the prices are favorable.

Not so in Texas. If a heatwave or cold snap hits and the power grid comes under strain, Texas can’t call on neighboring states to help it out.

By the way, it’s a myth that renewable sources like wind and solar are the reason that the grid is Texas has been unreliable. In fact, it was a failure of natural gas plants due to cold temperatures that caused the blackout in winter 2021, and high temperatures can cause fossil fuel power plants to fail too.

What does this have to do with going solar?

This is interesting and all, but as a Texas homeowner thinking about going solar, why would the inner workings of the electric grid matter to you?

That’s because billions of dollars will be spent to upgrade Texas’ power infrastructure, including weatherizing power plants, adding transmission lines, and deploying a lot of renewable energy.

This type of investment has long been needed, but the costs of these huge investments will eventually be passed onto consumers.

Inflation, war, and more

Global natural gas shortages, partly the result of the war in Ukraine and the Russian gas ban, have meant that the price of fossil fuels have shot up, including the natural gas used for Texas' power plants. Homeowners have seen as much as a 70% increase in their electricity rates compared to the summer of 2021.

New investment in renewables and lowered reliance on fossil fuels should mean that, in the long term, electricity prices will eventually start to drop, but that probably isn’t going to happen anytime soon.

Going solar means locking in your price of electricity for more than two decades

If this kind of inflation gives you stress, you’re definitely not alone. Fortunately, you can do something about it.

If you go solar, you are taking control over the future price of your electricity - for as long as 25 years or more.

This is because when you purchase a solar array, you are buying a system that should operate for 25 years or even more. Think of it like a fixed mortgage, but for electricity. Unless your electricity usage goes up, your electricity bill will be stabilized for as long as your solar array is generating electricity.

(By the way, piece of mind is a reason why you might pay a little more for a system with a good warranty.)

Net metering in Texas

There is no statewide net metering rule in Texas. However, net metering is available in some municipalities. These include:

  • City of Brenham
  • El Paso
  • San Antonio

Policies change, so be sure to check your local utility to find out if net metering is available.

In parts of the state with a deregulated energy market, you choose your Retail Electric Provider (REP). Several of them have a solar buyback plan in which you receive a credit for excess solar electricity you sell back to the grid.

At the moment, there are at least five REPs that offer a solar buyback plan:

Check if your REP offers a plan. If it doesn’t, you might considering switching to one of these.

Solar incentives in Texas

The main solar incentive in the US is investment tax credit which provides homeowners with a tax credit worth 26% of the system costs.

However, a few cities and utility companies offer their own solar incentives on top of that. The following utilities offer significant rebates:

  • AEP Texas (up to $3,000)
  • Austin Energy ($2,500)
  • City of San Marcos (up to $2,500)
  • CPS Energy (up to $3,000)

How to keep the lights on when the Texas power grid goes down

If you’re thinking of going solar to avoid blackouts, it’s important to understand that a standard home solar array will automatically shut down when there’s a blackout, even when the sun is shining. This is because there’s a risk of solar panels energizing downed power lines, which would put utility workers at risk.

A battery is what you need to keep the lights on when the grid goes dark. With enough capacity, your home can stay powered with clean solar electricity indefinitely. There’s different types of battery chemistry to be aware of, and you need to decide if you want to power all of your major appliances (such as central air conditioning) or can live with providing electricity to just a few critical circuits in your home.

You can read our guide on solar batteries to learn more.

Bottom line: solar is a smart choice for many Texans

If you have net metering or a solar buyback program available to you, it’s highly likely that going solar will make sense for you. If you have a good, sunny roof, installing solar panels will protect you from future price shocks. With the poor state of the electric grid in Texas, it’s likely that you can expect ongoing price fluctations.

A battery can make sense too, especially if you don’t relish the thought of having the power go out for multiple days like it did in the winter of 2021.

If you don’t have net metering or a solar buyback plan, a battery can also be a way to make solar viable: you can store your own energy instead of sending it back to the grid at an unfavorable rate.

The best way to go solar is to avoid the big national firms and instead hire a Texas solar installer. When you use The Solar Nerd to request quotes, we always avoid the national companies (who often have sketchy records) and instead refer you to high quality local companies.

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