Texas Solar Without Net Metering: The Honest Numbers
Texas is the second-biggest solar state in the US but has no statewide net metering law. If you've heard that makes solar a bad deal in Texas, you've heard wrong — but the details matter. Here's what the actual economics look like for Houston, Dallas, Austin, and San Antonio in 2026.
Data: PVGIS satellite yields for Texas cities · EIA electricity rates · ERCOT market data · April 2026
Why "no net metering" matters less than you think
Net metering is the policy that gives you retail-rate credits for surplus solar electricity you send to the grid. Texas has no statewide law requiring utilities to offer it. That's the fact that gets repeated endlessly. Here's the part that usually gets left out:
Self-consumed solar electricity — power your panels produce and your home uses directly — is worth the full retail rate regardless of what your utility does with exports. Every kWh you produce at noon and run through your AC, refrigerator, or TV is a kWh you didn't buy at 14.9¢. Net metering is irrelevant for that portion.
The typical US home uses about 60–70% of its solar production directly (higher in hot climates with heavy AC use like Texas). For that majority of production, your export policy doesn't matter at all.
Texas's deregulated market is actually a solar advantage
Texas's ERCOT market is the only major grid in the US where residential customers can freely choose their electricity provider. That includes providers with dedicated solar buyback plans that pay retail-equivalent rates for exports.
Several REPs compete specifically for solar customers by offering favorable buyback rates:
Rates change — compare current offers at PowerToChoose.org (official ERCOT site).
Switching to a solar-friendly REP takes about 15 minutes and can be done online. This is a step many Texas solar owners skip — and it meaningfully improves the economics when you do have surplus production.
Real payback numbers for Texas's major cities
Our PVGIS data for Texas cities shows strong solar yields — particularly in the western and central parts of the state. West Texas and El Paso approach Arizona-level production:
| City | Yield (kWh/kWp) | 8 kW savings/yr | Payback* |
|---|---|---|---|
| Houston | 1,503 | ~$1,790/yr | ~8.4 yrs |
| Dallas | 1,545 | ~$1,840/yr | ~8.2 yrs |
| Austin | 1,567 | ~$1,865/yr | ~8.0 yrs |
| San Antonio | 1,580 | ~$1,881/yr | ~7.9 yrs |
| El Paso | 1,792 | ~$2,133/yr | ~6.9 yrs |
*8 kW system, after 30% federal ITC, self-consumption model. Source: PVGIS + EIA.
What about the grid reliability concern?
After Winter Storm Uri in 2021 and subsequent grid stress events, many Texas homeowners ask whether solar + battery makes sense as backup power. The answer is yes — but solar alone won't help during a grid outage unless you have battery storage or a grid-forming inverter.
Standard grid-tied solar shuts off during outages (a safety requirement). A battery like the Tesla Powerwall 3 or Enphase IQ Battery can keep critical loads running for 12–24 hours during an outage, and in Texas's climate, a well-sized battery can extend that significantly by recharging from solar during daylight hours.
Battery storage adds roughly $12,000–$16,000 to system cost but qualifies for the 30% federal ITC. In Texas's deregulated market, some utilities also offer demand response payments for battery owners — adding another income stream.
Texas incentives: less than some states, not nothing
Texas has no state income tax, which means no state solar income tax credit. That's a meaningful difference from states like Arizona (25% state credit) or New York (25% state credit). What Texas does offer:
- Federal ITC (30%) — Fully applies — $6,480 on a typical $21,600 system
- Property tax exemption — 100% of solar-added home value is exempt from property tax
- Low installation costs — Texas averages $2.40–$2.80/watt — among the cheapest in the US
- Competition among REPs — Shop for solar buyback plans on PowerToChoose.org
- No state income tax — No state-level tax credit, but also no state tax reducing ITC benefit
The bottom line for Texas
A 7–9 year payback with 15–18 years of free electricity after that is a reasonable investment in most US markets. Texas sits in that range. It's not the 5-year payback you see in Massachusetts or New Jersey, but it's not a bad deal either — especially given Texas's lower installation costs and strong sun.
The homeowners who do best in Texas switch to a solar-friendly REP before their system goes live, size their system for self-consumption, and consider battery storage if grid reliability is a concern.
See exact numbers for your city: Texas solar data by city — or plug your bill into the solar calculator.