25-year savings projection for Texas
This projection starts from Texas's assumed $0.16/kWh electricity rate and 1,515 kWh/kW of annual production, then grows savings by 3% a year as electricity prices rise and reduces output by 0.5% a year as panels degrade.
| Year | Annual savings | Cumulative savings | vs. $21,600 cost |
|---|---|---|---|
| Year 1 | $1,598 | $1,598 | −$20,002 |
| Year 5 | $1,763 | $8,397 | −$13,203 |
| Year 10 | $1,993 | $17,890 | −$3,710 |
| Year 15 | $2,253 | $28,622 | +$7,022 |
| Year 20 | $2,547 | $40,756 | +$19,156 |
| Year 25 | $2,880 | $54,475 | +$32,875 |
A simple, undiscounted projection — it does not apply a discount rate, financing interest, inverter replacement (commonly needed once in 25 years), maintenance, or any change in home value. Treat it as a shape, not a forecast. See methodology.
Why savings look like this in Texas
Strong solar production is common, but buyback terms vary significantly by retail electricity provider.
The single biggest variable is what your utility pays for exported power. Texas has no statewide net metering. In deregulated areas, solar buyback plans from retail providers range from near-retail credits to nothing — plan choice is a major economic variable. Municipal utilities and co-ops (Austin Energy, CPS) run their own programs.
What would change this number
- Your actual rate. This uses a $0.16/kWh Texas average. If you pay more, savings scale up roughly proportionally.
- Self-consumption. We assume 68% of output is used on site at retail value and the rest exported at 45% of retail. Households home during the day, or with a battery, do better.
- Electricity price growth. At 3% a year, savings nearly double by year 25. Slower growth meaningfully reduces lifetime return.
- Incentives. Texas's main program — utility rebates plus a property tax exemption — reduces net cost and shortens break-even. See Texas incentives →
- Financing. A cash purchase earns the return above. A loan shifts it — interest can consume a large share of lifetime savings.
Frequently asked questions
How much can you save with solar panels in Texas?
An 8 kW system in Texas could save roughly $1,598 in the first year — about $133 a month — and around $54,475 across 25 years, assuming electricity prices rise 3% a year and panel output declines 0.5% a year. Against a midpoint installed cost of $21,600, that is a net gain of about $32,875.
What is the ROI on solar panels in Texas?
On these assumptions, roughly 152% over a 25-year system life — $32,875 of net savings on a $21,600 system. That is a simple, undiscounted return: it ignores financing interest, the time value of money, and any effect on home resale value. A cash purchase and a loan produce very different numbers.
How long does it take for solar to pay for itself in Texas?
Around year 12, when cumulative savings first exceed the $21,600 installed cost. A simple payback that ignores rising electricity prices gives a wider range of 12–15 years.
Do solar savings in Texas include the federal tax credit?
No. The 30% federal residential clean energy credit (Section 25D) ended for systems installed after December 31, 2025, so none of these figures include it. Any savings projection you see elsewhere that still applies 30% to a 2026 purchase is overstating the return.
What most affects solar savings in Texas?
Three things, in order: your utility's export compensation (Texas has no statewide net metering.), how much of the output your household consumes on site rather than exporting, and your actual electricity rate versus the 0.16/kWh state assumption used here. Utility rebates plus a property tax exemption can improve the result further.
Where these numbers come from
State assumptions are informed by public data and reviewed periodically (September 2026):