Switching to solar energy for your home is one of the best investments you can make! Going solar is the surest way to protect yourself from the inflating cost of electricity while saving you thousands in utility bills.
The great state of Texas is known for its wide-open blue skies and ample sunshine. Taking advantage of the nearly 300 sunny days per year has never been easier – there are hundreds of qualified solar companies that can help you put those rays to good use!
Not only are there plenty of companies to choose from there’s also a plethora of different solar panel brands, types of inverters, storage options, and ways to finance or lease the system. With such a wide array of options available, many homeowners find themselves overwhelmed at the preliminary research stage. This is where we come in – we’ll help you narrow down your list of companies to talk to and know what questions to ask, so you can feel confident that you are making a wise, informed decision.
Solar Incentives in Texas
In an effort to help reduce our carbon footprint and achieve our renewable energy goals, many states are offering enticing rebates and tax incentives to help make switching to solar power even more appealing.
The state of Texas has already got you off to a good start by enacting a renewable energy property tax exemption policy so you don’t have to worry about your property taxes increase as a result of investing in solar energy.
Many Texas utility companies also offer rebate programs to help offset the cost to install the system. Austin Energy, for example is offering a $2,500 rebate to residential customers who install at least 3 kW of photovoltaic solar panels on their homes. Other utility companies such as CPS Energy and Guadalupe Valley Electric Cooperative have additional financial incentives to help you go solar and save.
Regardless of where you live in the United States or who your utility company is, homeowners who install solar on their homes enjoy a federal tax credit of 26% of the total system cost. That means that 26% of the cost to your install your solar will be credited back to you by the IRS against your total federal tax liability.
While the tax credit is a dollar-to-dollar credit (as opposed to a deduction or exemption) you do have to have the tax liability to support it in order to realize the full amount. Homeowners who pay very little or no federal income taxes would have no tax liability to take the credit against. Before you start scheduling consultations with solar representatives, it may be a good idea to talk to a professional CPA or Tax Advisor to verify whether or not this credit will be useful to you. If the tax credit isn’t something that would benefit you, you may consider leasing the system instead.
Leasing vs Purchasing Solar in Texas
Going Solar doesn’t always mean you have to put up a large amount of money all at once. Leasing the system or entering into a Power Purchase Agreement is often a more affordable way to make the switch. Great financing options are also available in most areas. Some utility companies, including Guadalupe Valley Electric Cooperative make it even easier by offering on-bill financing!
You might consider talking to a company that predominantly offers lease options, and a company that predominantly sticks to purchases. Of course, both companies will have a list of reasons why the options they offer are the best – and you can usually expect to hear good points made on both sides.
For some people, there may be a clear answer right off the bat whether a lease or a purchase would be most beneficial. It may save you some time and effort to decide before you start scheduling appointments which will likely make the most sense, and then only schedule meetings with companies that are offering the type of arrangement that will best meet your needs.
Generally speaking, purchasing the system is the stronger investment. With a purchase, you get to keep all of the incentives and the new system will increases the value to your home.
That’s not to say, however, that you’d have to pay for the system all up front. When solar was still new, some banks were hesitant to loan money to homeowners for solar panels. Well, solar isn’t new anymore and the banks have changed their perspectives. Many local credit unions offer Green Energy loans that require no money down and are designed specifically to help you make the most of your investment. Often these loans will offer a re-cast option so you can put some or all of your incentive money back into the loan once you’ve realized it. Taking advantage of the re-cast will significantly lower your monthly loan payments.
A HELOC, or Home Equity Line of Credit is a great way to use your home’s equity to finance your solar system. Typically, the interest rates on HELOCs are lower than the rates for a personal loan or a Green Energy loan, but are usually variable – meaning the rate can change over time. Some banks also offer home equity loans. Like a HELOC, you are borrowing against the equity in the house, but the rates are usually fixed.
PACE loans, or Property Assessed Clean Energy loans have also helped thousands of homeowners go solar by tying the loan to your property tax bill. These can be a little bit tricky, so make sure you read all of the fine print, but in the right situation they are a fantastic solution. PACE loans are tied to the house instead of your personal credit, which makes it an easy way to finance your new system even if you’ve had some credit issues in the past.
Purchasing your system will make the home easier to sell than leasing a system, and once the system is paid for – it’s yours, you own it! Leasing a system, on the other hand, usually will come with some stipulations and cost involved when the term of the lease is up. The advantage is that the monthly payments are usually lower than the payments would be if you financed a system you own. This is partly because the leasing company keeps the incentives, so you’re effectively making monthly payments on the net cost of the system instead of the pre-incentive cost to install it.
Leasing is a great way to go if the main goal is lowering your monthly budget as much as possible, as quickly as possible.
Purchasing is usually the better option if you have plenty of tax liability to support the tax credit and you are looking for the best return on your investment.
Solar Equipment Options in TX
Making sure your system is designed to meet your needs is an essential part of the decision-making process.
Most solar panel manufacturers offer 25-year warranties on the panels’ power output. 25 years is a long time. I suggest choosing a brand (and a contractor) that is unlikely to go out of business before the warranty expires. Panasonic and LG seem to be the safest bets because they have been in business for a very long time and they have other streams of revenue backing your solar warranties.
Panasonic and LG, however are not the most inexpensive panels on the market. Realistically, the solar panels themselves are the least likely thing to give you an issue down the line. The most common problems can usually be traced back to the contractor that installed the system. If you’re on a tight budget and have to choose between a less expensive panel or a cheaper contractor – by all means, choose the less expensive panel installed by a qualified professional.
PV, or photovoltaic solar panels create a direct electrical current that must be sent through an inverter to change it to alternating current, which is what we use in our homes. The type of inverter you choose should partially depend on whether or not you want to include a battery, either right away or in the future.
It’s a common misconception that having solar panels installed means you will still have electricity if there is a power outage. Without battery back-up, you won’t. If blackout protection is important to you, make sure you choose a contractor who is familiar with batteries and can properly educate you on the many different types of storage systems. Some battery systems can back up the whole house, some are designed for the most critical loads only. Some tie into the utility’s grid system, some are designed to be off-grid. Most can be added on later, as long as you install a compatible inverter.
Solar is no longer just for the early adapters; it is full swing mainstream! Batteries, however, are still pretty new. California is currently offering rebates on battery systems, so it’s not unlikely that other states like Texas will soon follow suit. Prepping your system to add batteries later could result in a lower cost to install them and would give the industry a little more time to develop the technology.
Net Metering in TX
Solar is a big investment that many people only make once in their lives, so it’s important to choose a solar company you can trust. Make sure whoever you choose can effectively explain how the billing structure works for solar customers in your area.
“Net Metering” is the most common, and often the most financially advantageous billing structure available for solar customers.
Because the solar electric generation will vary each month, as will the usage of the house, settling out once a year instead of monthly is ideal. Some months you’ll over produce, and some months your house will use more energy than the system generates. The idea behind net metering is to try to come as close to breaking even as you can annually.
Utility companies that offer net metering will tell you not to pay the electric portion of the bill until the end of every 12-month period. At that 12-month mark you’ll get what’s called a true-up statement showing everything you’ve generated verses everything you’ve used, and what the net difference is – thus the name “net metering.”
A qualified solar representative will know the rules and regulations for interconnecting with your local utility, and a good company will always comply with the Texas Public Utility Commission’s guidelines.
In addition to finding a company that can easily and comprehensively explain your billing structure, as well as one that offers the type of arrangement (lease or purchase) and the equipment that will work best for you, here’s a few more things we suggest looking for:
- A company that does their own work instead of using sub-contractors.
- A company that has been in business for a long time.
- A company that stands behind their workmanship and offers a detailed warranty.
Best Solar Companies in Texas
1. Lighthouse Solar
Austin & San Antonio
2. SunPower by Freedom Solar
Austin, Houston, San Antonio, & Dallas/ Fort Worth
3. Good Faith Energy
Dallas/ Fort Worth
4. Victory Solar
Stafford (Houston Area)
5. Axium Solar
6. He Solar
Buda (Austin Area)
7. Solar CenTex
8. Erus Energy
9. Texas Solar Outfitters
10. Wells Solar and Electrical Services
The Texas Department of Licensing and Regulation is the best resource for making sure your solar company is properly licensed to perform the work they are proposing, and to verify that they are operating under their own license.
The Better Business Bureau regulates fair business practices and is a great resource for researching a company’s history and background.
Consumer review sites like Yelp and Angie’s List provide a good sense of overall customer satisfaction.
Whether you lease your system, finance it, or purchase it outright, solar is a fantastic investment. With so many qualified installers, great incentives, and all that Texas sunshine, it has never been easier to make the switch.