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What Houston Residents Need to Know About Solar Panels, Pricing and Incentives

Are you looking to cut your energy costs? Here are some solar alternatives for residents of Space City.

View of downtown Houston skyscrapers seen from below on a sunny day.
This view from downtown Houston begs the question: Does the sun shine a little brighter in Texas? 
Art Wager/Getty Images

Are solar panels a good investment in Houston? For many H-Town residents and businesses, the answer is yes. According to US Climate Data, Houston gets 2,633 annual hours of sunshine, an average of 7 hours per day. This means solar panels in Houston have the potential to generate a lot of energy. 

Storms and hurricanes occasionally strain the limits of Houston's power infrastructure, leading many Houstonians to look for ways to strengthen their energy independence in case of power outages. 

Houston residents are also turning to solar to lower monthly electricity bills. The US Energy Information Administration places the average Texas electricity bill at $150.56, nearly $13 above the national average of $137.70. Investing in solar panels may be the right choice for you, considering the high energy consumption and rising electricity prices.

Houston solar panel costs

The cost of solar panels in Houston will vary among homes based on the solar array size and individual household electricity consumption. Texas data from the Lawrence Berkeley National Laboratory's Tracking the Sun report can also help us estimate what Houston residents will pay for solar panels. Plus, solar incentives are available in Houston to lower the overall cost of home solar panels. Current incentives include a 30% federal solar tax credit, net metering benefits from Houston electricity providers and more. 

Stats for Texas solar systems


System size (kW) Price per watt Total cost
High 10.2 $4.01 $41,052
Median 7.4 $3.80 $28,888
Low 5.4 $3.23 $17,293

Texas vs. the rest of the US


System size (kW) Price per watt Total cost
Texas 7.4  $3.80 $28,888
Nationwide 7.6  $3.67 $26,882

Solar financing options for Houston residents

Solar panel systems in Houston are typically paid for by one of the following options. Each payment method has pros and cons for homeowners to consider. 

  • Cash: Interest-free, but must pay upfront
  • Solar loans: Can pay over time, but interest can accrue
  • Solar lease: Flat monthly payments, but ineligible to claim some incentives and rebates
  • Power Purchase Agreement: Little-to-no homeowner maintenance, but it takes longer to see a return on investment

Cash and solar loans are the most beneficial for homeowners who want a quick solar investment return. Solar leases and PPAs are best for residents who can't pay cash and may not qualify for a large loan.


Advertiser Disclosure: CNET's corporate partner, SaveOnEnergy, can help you find the right energy fit for your home. The SaveOnEnergy marketplace helps you search, compare, sign up and save on the right energy fit for your home -- all for free. If you're interested in solar, answer a few questions to get an exact price quote from our solar advisors.


Houston solar panel rebates and incentives

Homeowners looking to install solar panels can refer to the Houston incentives and rebates table below. The most well-known, cost-saving incentive is the Residential Clean Energy Credit. Homeowners who pay with cash or use a solar loan, between 2022 and 2032, can receive a 30% federal tax credit when they file their income taxes for the entire cost of a solar panel installation. Previously known as the Investment Tax Credit, this benefit can save Houston residents around $8,500 on the median Texas solar system price of $28,888. A reputable solar installer can also assist with determining other local benefits available through your electricity provider or county and town governance. 

Some Houston solar incentives

Program Description
Energy-efficient mortgages An EEM assesses the value of future utility savings to secure better financing for the borrower. Financing terms may include larger loan amounts, lower interest rates and more.
Green Mountain Energy Renewable Rewards Buyback Program Green Mountain Energy gives bill credits to solar owners when they connect to the grid with a system size of less than 50 kW.
Net Metering Programs Houston electricity providers often offer net metering programs for solar owners. Net metering sells extra energy back to the grid for electricity bill credits. Contact your electric provider to see if a net metering program exists.
Renewable Energy Property Tax Exemption Houston residents are exempt from property tax increases that occur from installing a solar panel system. Residents can apply with Form 50-123.
Residential Clean Energy Credit Houston residents can claim the Clean Energy Credit. This 30% federal tax credit is available until 2032. IRS form 5695 is needed to apply.
TXU Energy Home Solar Buyback The TXU Solar Buyback program offers electric bill credits for solar system owners who send excess energy to the grid.

Houston solar panel companies

Houston has hundreds of solar panel installers for residents and businesses, but selecting the best installer requires research and planning. Below are five solar panel companies available in Houston that we've listed among our choices for best solar companies, based on customer data and buying trends. 

ADT Solar

ADT Solar, a division of ADT security, was known as Sunpro Solar before ADT purchased it in 2021. Headquartered in Florida, this solar panel company offers high-quality monocrystalline solar panels backed by a 25-year warranty. Solar battery options include the Tesla Powerwall and Enphase IQ. ADT Solar ranked second on Solar Power World Magazine's Top Residential Solar Installer list in 2021. 

Palmetto Solar

Founded in 2010, South Carolina-based Palmetto Solar offers its customers monocrystalline solar panels and Sonnen solar batteries. Palmetto boasts "end-to-end solar services" by supporting the customer at every step of the solar process, resulting in the company being named the "most forward-thinking solar contractor" by Solar Power World in 2022.

SunPower Solar

Since 1985, SunPower and its sister company Maxeon have provided solar panel installations with the most efficient residential solar panels available. Based in California, the company has a 25-year system warranty and a 10-year battery warranty, along with several financing options. Due to its sustainable practices, the business earned PV Magazine's Sustainability Award in 2019. 

Sunrun

Budget-conscious solar customers can turn to Sunrun for solar leases and PPAs. While other solar companies tend to encourage cash or loan options, Sunrun customers typically pay a flat monthly fee while the company maintains ownership of the solar array. Founded in 2007 and headquartered in California, Sunrun's speedy growth and 2020 acquisition of Vivint Solar led to it becoming the largest US solar company. Sunrun has won various awards, including the 2014 Global Cleantech award for innovation in clean technology and the 2010 Green Power Leadership award for advancing green power. 

Tesla Solar

Popular electric vehicle brand Tesla ventured into the solar panel market in 2016. Known for its Powerwall battery and Solar Roof, the Texas-based company offers high-efficiency solar panels with a 25-year panel performance, 10-year comprehensive system warranty and 10-year battery warranty. Tesla's price transparency through online quotes and referral bonuses has provided a positive counterbalance to the company's initial dispute with shareholders and lawsuit over pricing inconsistencies.

Installation factors to keep in mind

The decision to invest in solar to gain more energy independence involves many contributing factors. Is solar worth it for you? To make the best decision, consider these factors of solar installation, ownership and maintenance.

Factor Details
HOA rules HOAs cannot ban solar panels in Houston due to Texas solar rights laws, but your neighborhood could have rules around the placement or aesthetics of solar panels. Look into your HOA agreement to see if any restrictions apply.
Home insurance Your home insurance may go up by adding solar panels to your home, but it's important to insure your investment. Speak with your home insurance company in advance to see how adding solar panels will affect your coverage.
Home location Solar power captures energy from the sun, so sunlight is essential for an effective array. Although panels can still generate energy in cold or shaded areas, extreme cover is unfavorable.
Own or rent Ask your landlord if installing solar is permitted at your home if you rent. If not, you can consider community solar programs like Arcadia to use solar energy and possibly see savings on your electric bill.
Roof condition Trusted solar installers will analyze roof quality and age to include any needed repairs when creating an initial solar panel quote. The roof's size and slope are also a factor in how many solar panels are required, which will affect the productivity of the solar array.

Houston solar power FAQs

Are solar panels in Houston required on new houses?

No. New homes in Houston are not required to have solar panels. However, as of April 2021, all new homes are subject to Houston's Solar Ready provision. According to The Houston Chronicle, the Solar Ready provision means "developers must incorporate the potential for their installation in the future into their plans." 

How much solar power do I need to run a house in Houston?

The amount of solar power needed to run a home depends on that household's size and energy consumption. Larger Houston homes, especially those with pools or saunas, will require more energy than the average home to provide electricity for the entire house. In Texas, the median solar system size is 7.4 kW. 

Look at your energy bills over the past 12 months to see how much energy your home uses in a year. Past bills are usually available online at your electric provider's website and will state how much kWh is used per month. By adding the kWh per month for the past year and dividing by 12, you can get an average of your home's kW use and then plan accordingly for the right–sized solar array. A reputable solar installer will do this part for you. In a power outage, a solar battery can keep essential appliances running temporarily. Solar panels will not provide electricity during a power outage without a solar battery because a connection to the power grid is required. 

What are the best solar panel companies in Houston?

ADT Solar, Palmetto, Sunrun, SunPower and Tesla Solar are five solar companies with good reviews that service the Houston area. According to the Solar Energy Industries Association, over 500 solar panel companies exist in Texas, so choosing the best company depends on what qualities you are looking for in a solar installer. Homeowners looking for a low upfront cost may find Sunrun to be the best for them. Those looking for a hands-off approach to solar installation might prefer a company that handles all the small details like Palmetto. Solar users that prefer a legacy brand with a long history in the solar industry might consider ADT Solar or SunPower.