Surging Texas Utility Rates: Harnessing Solar Power Might Be The Answer

texas utility rates

If you looked at your Texas utility rates throughout last year and sighed in despair, you’re not alone. 2022 was a rough year for Texas. The Lone Star State suffered a fair bit of collateral damage from the Russia-Ukraine conflict. Here’s the short of it – the cost of natural gas increased because of the war, leading to a surge in utility rates.


Here’s a quick comparison – early last year, the lowest utility rate recorded was 9.5 cents per kilowatt-hour for 1,000 kWh usage. Four months later, the lowest rate shot up to 13.7 cents per kilowatt-hour, a whopping 44% increase.


And as customers scrambled to change electricity plans to escape costly power bills, they stumbled upon long-term contracts that extended up to several years and charged hefty cancellation fees, adding to the chaos

The Electricity Dilemma: Here’s What Texans Need To Know

For the most part, the power prices in the state are expected to decrease. The U.S. Energy Information Administration projects that the cost of natural gas and electricity prices will plunge this year, resulting in the consequent reduction in power costs.


These are undoubtedly projections, and the rate at which these prices will decrease is unclear.


Therefore, the question is — should you shop for a new electricity plan right now or wait to see if the rates fall further in the next couple of months?


You can find some solace in the fact that current utility plans have done away with long-term contracts requiring years of commitment. Current contracts are only for a couple of months.


While it is quite apparent that Texas will see the most drastic drop in electricity prices, what you might not know is that consumers may not enjoy the savings until later due to the lag between wholesale and retail pricing.

The Utility Rate Conundrum You Need To Know

Generally speaking, households pay lower Texas utility rates compared to the national average. And, in the current scenario, they were beginning to feel the financial strain.


Here are some numbers to put things into better perspective – The average electric rate in Texas costs 13 ¢/kilowatt-hour (kWh), 35% lower than the national average rate of 20 ¢/kWh.


Also, the average Texas household spends about $160 monthly on utility bills, which adds up to $1,920 annually. That is again 10% lower than the national average electric bill of $2,133.


That said, while your $100 and $200 utility bills may not seem like much month-on-month, if you do the math, they will add up and not in a desirable way. Considering inflation and the incremental increase in power prices, you will likely spend thousands of dollars in power bills alone over the next few years.


Moving to renewable sources of energy, therefore, looks like the best option for Texans.

The Potential Of Solar Power In Texas

The volatile utility rates and skyrocketing power bills are what pushed Texans to consider harnessing solar power.


A law passed by the Texas Legislature in 2005 mandated the state to boost the usage of renewable energy, specifically wind power. Under this legislation, the Public Utility Commission of Texas (PUCT) was directed to identify Competitive Renewable Energy Zones (CREZ) across Texas. The PUCT was then required to formulate a strategy to construct the requisite transmission infrastructure to supply fresh renewable energy to electricity consumers in the state.


Thanks to this directive, Texas was among the top states producing and using green energy. Sourced primarily from wind energy, the state produces a record 5,927,344 kilo-watt hours of green energy, which contributes to 12.7% of the green energy in the country.


Texas currently ranks fifth in the country for the production of solar energy, a grossly underused resource.

Sunny Skies Boosting Solar Power Potential

Texas has immense solar potential thanks to the warm and sunny climate it is endowed with for most of the year. The state has successfully established itself as a prominent player in the field of solar power generation. 


As per the latest records, 2,000 megawatts of solar power are expected to be installed in the state in 2023, setting it way ahead of the rest.


The future looks bright – quite literally, with the Solar Energy Industries Association (SEIA) predicting another 36,000 MW of solar power installations in the next five years.

A Conducive Market

The fluctuating cost of electric power, plummeting solar panel installation costs, rapid advancements in solar cell technology, and looming threats of air pollution and global warming have contributed to a growing preference for solar energy among customers.

Additionally, with the volume of solar photovoltaic (PV) capacity in the United States tripling in the recent past, the solar power market is quickly stabilizing.

Solar Power In Texas: Setting Up And Installation Made Easy

Sun availability reports help determine if installing a solar unit is recommended in the first place.

Once that’s determined, solar panel installation in Texas is a breeze, with many companies providing end-to-end services.


They also coordinate with the relevant authorities and utility companies to acquire the necessary clearances. Trained professionals are then dispatched for the solar panel installation, which is customized to fit individual roof layouts to maximize solar energy production.


Solar panel installation companies in Texas also provide monitoring systems to allow customers to understand their power consumption.


Besides the actual solar panel installations, customers can also avail of extra battery storage options that come in handy during power outages.


Roofing services are often bundled into solar panel installation packages. A partial or complete re-roof is recommended based on the type of panel installation required for the home.


The cost of setting up a solar power system varies on the size of your system, manufacturer, service charges, and other factors.


However, there are many financial options available to Texans considering the switch to solar. In fact, some even think of it as an investment. While some customers choose to pay the cost upfront, others finance themselves through solar leases and purchase agreements.


That said, any solar system will be exposed to the forces of nature, and over time, the resulting wear and tear will call for repair. The build-up of dirt and water can impede the performance of the pane. Your panels should therefore be professionally cleaned to ensure their longevity.

Solar Energy Rates in Texas in 2023

The cost of a solar panel installation in Texas can range from $11,560 to $15,640, with an average gross price of $13,600. Upon accessing the federal investment tax credit (ITC) of 30%, the net cost of solar panel units can fall even further.


It is the potential savings from solar panel installations that convince customers to make the switch to solar. And while it takes approximately 10 years to recover your solar energy investment, you can expect savings of almost $25,000 in the next 20 years.


There is a growing awareness and shift toward sustainable energy sources such as solar power. And given its many benefits, solar energy is a highly viable option for Texan households.


If you were considering investing in solar energy in Texas, we hope this article has helped simplify your decision!


Invest in solar energy, and save more.

Authored by Ryan Douglas

Authored by Ryan Douglas

NRG Clean Power's resident writer and solar enthusiast, Ryan Douglas covers all things related to the clean energy industry.