What if you could cut your electricity bill, increase your home’s value, and protect yourself from rising energy rates — all at once?
For thousands of Texas homeowners, solar energy is making that a reality. But the real question is: Are solar panels worth it for you in 2025?
The short answer? In many cases — absolutely. But it depends on your location, your utility provider, the size of your system, and how you take advantage of the available incentives.
In this guide, we’ll break it all down for you. You’ll discover:
How much solar really costs in Texas (including Dallas-specific pricing)
How the 30% federal tax credit and Texas property tax exemptions reduce your net cost
What utility rebates and solar buyback programs are available in 2025
And most importantly — how long it takes to break even
If you’ve been on the fence about going solar, this is the clear, no-fluff breakdown you’ve been looking for. Let’s explore whether going solar in Texas is a smart investment for your home — and your wallet.
What Is the Current Cost of Solar Panels in Texas?
When it comes to installing solar panels in Texas, the upfront cost is usually the first concern. The good news? Solar has never been more affordable — and thanks to federal tax credits and local incentives, your net cost is often thousands less than you’d expect.
Average Cost of Solar in Texas (Before Incentives)
As of 2025, the average price per watt for residential solar in Texas ranges from $2.60 to $3.00. That means:
| System Size | Est. Cost (Before Incentives) |
|---|---|
| 6 kW | $15,600 – $18,000 |
| 10 kW | $26,000 – $30,000 |
| 12 kW | $31,200 – $36,000 |
These figures are before applying any credits, rebates, or local programs — which can significantly reduce what you actually pay out of pocket.
What About Dallas?
If you’re located in Dallas, you’ll likely fall right in line with the Texas average. Some homeowners may even get slightly better pricing due to higher installer competition and access to programs like Oncor’s seasonal solar incentives.
What Affects Solar Pricing?
A few things can impact your final quote:
Roof type, age, and orientation
Whether you include battery backup
Installer pricing and equipment brand
Utility-specific interconnection fees
In the next section, we’ll show you how the 30% federal tax credit brings these numbers down — and how much you can actually expect to save long-term.
Not sure how many solar panels your home might need? Here’s a simple breakdown for Dallas homeowners.
Federal Solar Tax Credit in 2025
Here’s one of the biggest reasons solar is more affordable in 2025 than ever before: the Federal Solar Investment Tax Credit (ITC).
This nationwide incentive allows you to claim 30% of your total solar installation cost as a tax credit — a direct reduction of your federal tax bill.
How It Works
Let’s say your total solar system costs $25,000. With the 30% federal credit:
You get $7,500 back as a credit on your federal taxes
That brings your effective cost down to $17,500
If your tax liability is less than $7,500 this year, don’t worry — the credit rolls over to future tax years until it’s used up.
Note: This applies whether you pay cash or finance your system with a solar loan.
2025 Is the Time
The 30% credit is locked in through 2032, but there’s no telling what Congress may do long-term. If you’re on the fence, taking action now ensures you maximize your savings while the program is still strong.
And the best part? Most solar installers — including First Solar Installers — will help you document everything you need to claim the ITC during tax season.
In the next section, we’ll break down what Texas offers in addition to the federal credit — including rebates, property tax exemptions, and more.
Texas Solar Incentives & Rebates in 2025
While Texas doesn’t offer a statewide solar tax credit, there are still powerful financial incentives that can help reduce your total system cost — especially if you live in the Dallas area or near major utility providers.
Curious how much energy solar can generate for your home? Explore solar panel output explained.
Texas Solar Rebates and Incentives
Here’s what’s currently available to Texas homeowners in 2025:
Texas Property Tax Exemption for Solar
Texas law exempts 100% of the added value of a solar energy system from your property taxes.
That means if your solar installation increases your home’s appraised value by $25,000 — you won’t pay any additional property tax on that amount.
This is one of the most valuable and overlooked incentives in Texas.
Utility Solar Rebates
Some utility companies in Texas offer cash-back rebates for solar installations. These programs vary by region and may only be available seasonally or on a first-come, first-served basis.
Top Utility Rebates to Know:
Austin Energy: Offers rebates up to $2,500 for eligible residential systems, plus performance-based incentives.
CPS Energy (San Antonio): Offers rebates starting at $1,200, with potential add-ons for battery storage.
Oncor (Dallas area): Occasionally runs seasonal solar incentive programs — these are not guaranteed every year but have been offered in past cycles. You can check for current Oncor programs on the Oncor Incentive Portal.
If you’re in Dallas, check for Oncor solar incentives before signing a contract. These offers can cover hundreds to thousands of dollars in installation costs.
How to Apply for Rebates
Most rebate programs require:
Working with a participating or approved contractor
Submitting documentation before installation
Final inspection and post-installation verification
Your installer (like First Solar Installers) will typically manage this process for you — just ask during your consultation.
Texas Solar Property Tax Exemption
When you install solar panels on your home, you’re not just saving on electricity — you’re also adding value to your property. But in most states, that added value means a higher property tax bill. Not in Texas.
Thanks to the Texas Renewable Energy Property Tax Exemption, you can increase your home’s value with solar without paying a single extra dollar in property taxes on that increase.
How It Works
Let’s say your solar installation boosts your home’s value by $20,000. Normally, that would raise your assessed property value — and your annual tax bill along with it.
Under Texas law, however, 100% of that added value is exempt from taxation.
This exemption applies to both residential and commercial solar systems.
How to Claim the Exemption
To receive the exemption:
Install a qualifying renewable energy system (like rooftop solar)
Download and complete Form 50-123 from the Texas Comptroller’s website to apply for the exemption.
Submit it to your local county appraisal district
Most solar installation companies can walk you through this process or even file the paperwork on your behalf.
A Hidden Benefit with Big Long-Term Value
This exemption doesn’t show up on your quote or invoice — but over time, it protects your investment. You get the financial benefit of a more valuable home without the penalty of higher annual taxes.
Combined with the federal tax credit and potential rebates, this makes solar an even more attractive option for Texas homeowners in 2025.
Next, let’s talk about how long it takes to recoup your investment — and what kind of returns you can expect.
ROI and Payback Period in Texas
Installing solar panels isn’t just an upgrade — it’s an investment. And like any smart investment, it’s important to understand the return you’re getting and how long it takes to break even.
In Texas, the numbers often work in your favor.
What Is the Typical Payback Period in Texas?
For most homeowners in Texas, the average solar payback period ranges from 7 to 10 years. That’s the time it takes for your utility bill savings to equal the total cost of your system (after incentives).
After that point, you’re generating free electricity — and that’s when the ROI really kicks in.
What Influences Your ROI?
Several factors determine how fast you see a return:
System size – Larger systems offset more usage (especially in hot Texas summers)
Electricity rates – The higher your current rates, the more you save
Available incentives – Federal tax credit, utility rebates, and local exemptions accelerate ROI
Buyback programs – Getting credited for excess electricity speeds up your payback
Let’s break it down:
| Scenario | Estimated Payback |
|---|---|
| 6kW system with ITC + rebate | 7–8 years |
| 10kW system in high-usage home | 8–9 years |
| Dallas home with Oncor incentives | As low as 6–7 years |
What’s the Long-Term Return?
After the payback period, your system could save you $1,000–$2,000 per year, depending on usage and electricity rates. Over 25 years, that’s potentially $20,000–$40,000+ in total savings.
Plus, with Texas’ long, sunny climate and high summer A/C usage, solar systems here tend to produce strong output — making the math even more favorable.
Solar Buyback Programs in Texas
One of the underrated benefits of going solar in Texas? You can actually get paid for the extra electricity your system produces — thanks to what’s called a solar buyback program.
For those considering a fully independent energy setup, here’s what you need to know about off-grid systems.
These programs allow you to sell unused solar energy back to the grid, helping you lower your electricity bill even further or, in some cases, earn bill credits.
How Do Solar Buyback Programs Work?
When your solar panels generate more electricity than your home uses (especially during sunny afternoons), the excess energy flows back into the utility grid.
If you’re enrolled in a buyback plan, your electricity provider gives you credit — usually in the form of a per-kilowatt-hour (kWh) rate — for that surplus power.
Top Solar Buyback Providers in Texas (2025)
Texas has a deregulated energy market, which means you can shop for electricity plans — and some retailers now offer solar-friendly options:
Green Mountain Energy – Renewable Rewards buyback program (Learn more about Green Mountain Energy’s buyback plans here)
Octopus Energy – Smart export rates and time-of-use options
Rhythm – Competitive plans that credit you for exported solar
MP2 Energy – Wholesale pricing plans with solar export benefits
Each provider offers different terms, so be sure to compare:
Rate per kWh for buyback
Whether credits roll over monthly
Any caps or restrictions
If you’re in Dallas or another major metro area, chances are good that a solar buyback plan is available through a competitive provider.
Pros and Cons of Going Solar in Texas
No investment is without its trade-offs — and going solar is no different. Here’s a quick look at the real-world advantages and considerations for Texas homeowners in 2025.
Pros of Solar in Texas
1. Big Long-Term Savings
With high summer electricity usage and strong solar production, most homeowners see $20,000–$40,000+ in lifetime savings.
2. Strong Incentives Still Available
The 30% federal tax credit, property tax exemption, and local rebates make the upfront cost far more manageable.
3. Energy Independence
Solar can help protect your home during power grid instability, especially when paired with battery storage.
4. Boost in Home Value
Solar increases your property value — and in Texas, you won’t pay extra property tax on that added value.
Cons to Consider
1. Upfront Cost
Even with incentives, a typical system can still cost $15,000–$25,000 upfront (or through financing).
2. No Statewide Net Metering
Texas doesn’t mandate net metering, so buyback programs vary by provider — you’ll need to shop around.
3. Roof Requirements
Not all homes are ideal for solar (shade, roof age, or direction can limit performance).
Still, for most Texas homeowners — especially those in high-usage areas like Dallas — the benefits of solar far outweigh the drawbacks.
Let’s wrap up with a few of the most common questions homeowners ask before making the switch.
Frequently Asked Questions
Are solar panels worth it in Dallas, Texas?
Yes — Dallas has strong sunlight exposure, rising electricity rates, and access to potential utility incentives through Oncor. Combined with the 30% federal tax credit, most homeowners in Dallas see a solid return on their investment within 7–9 years.
What is the average cost of solar panels in Texas?
As of 2025, the average cost is between $2.60 and $3.00 per watt. That means a 6kW system might cost $15,600–$18,000 before incentives, and significantly less after applying the federal tax credit and any available rebates.
How do I get the federal solar tax credit in Texas?
After installing your system, you can claim the 30% tax credit by filling out IRS Form 5695 with your federal tax return. Most installers, like First Solar Installers, will provide documentation and guidance to help you file correctly. Learn more from the U.S. Department of Energy’s guide to the Solar Investment Tax Credit.
Are there solar incentives in Dallas?
While there’s no Dallas-specific incentive program, local residents may qualify for Oncor Electric delivery area rebates and the statewide property tax exemption. Some electricity providers also offer solar buyback plans in the area.
How long do solar panels last in Texas?
Most systems come with 25-year warranties, but panels can often continue generating power for 30 years or more with minimal degradation.
Conclusion
Going solar in Texas isn’t just about saving money — it’s about taking control.
With rising utility rates, generous incentives still available in 2025, and the power to generate your own electricity, solar panels have never made more financial sense for Texas homeowners — especially in high-usage areas like Dallas. If you’re dreaming of living tiny and energy-free, check out how solar panels power tiny homes in Dallas.
You’ve seen the numbers. You understand the tax credits. And now you know what kind of savings and payback period to expect. The only thing left is to take that first step.
Get a free, no-obligation quote today from First Solar Installers and find out exactly how much you could save with solar.
It costs nothing to find out — but it could save you thousands.