Texas homes pay about 16.44 cents per kilowatt-hour (EIA residential retail price, May 2026 data). Most of Texas is a deregulated ERCOT market, so you shop a retail provider for the energy while a regulated wires company delivers it. That price, and the buyback plan you pick, decide how fast rooftop solar pays back.
Your electricity rate is the single biggest number in any Texas solar decision, because every kilowatt-hour your panels make is a kilowatt-hour you do not buy from the grid. In 2026 the average Texas home pays roughly 16.44 cents per kWh, but Texas is unusual: most of the state is deregulated, so there is no one statewide rate and no statewide net metering. What you actually pay depends on the retail plan you chose, and what your solar earns back depends on that same plan. This page breaks down what drives Texas rates in 2026 and how each piece changes your solar payback.
What Texans pay for power in 2026
The average Texas residential electricity price is about 16.44 cents per kWh as of the latest EIA data (May 2026). That is the all-in number: it blends the energy you buy from your retail provider with the delivery charge your local wires company adds (EIA Electric Power Monthly). Texas sits near the middle of the national pack, but the spread between the cheapest and most expensive plans a single household can sign is wide, because you choose the energy half yourself.
A helpful way to read your bill is to split the rate into its two parts. The table below shows the pieces that add up to the price per kWh you pay.
| Part of your Texas rate | Who sets it | Can you shop it? |
|---|---|---|
| Energy charge (the cents/kWh headline) | Your Retail Electric Provider (REP) | Yes, in deregulated ERCOT areas |
| TDU delivery charge (poles, wires, meter) | Regulated wires utility (Oncor, CenterPoint, AEP Texas, TNMP) | No, set by the PUCT |
| Base or monthly fee | Your REP plan | Yes, varies by plan |
| Solar buyback credit | Your REP plan (or municipal utility) | Yes, only some plans offer it |
Figures and plan features change often, so treat the 16.44 cents figure as a statewide average to verify against your own bill, not a rate you are guaranteed. Our Texas solar cost guide walks through how that rate turns into a payback period.
Your Texas electricity rate is really two prices
Across the ERCOT grid that covers most of Texas, your bill combines a Retail Electric Provider (REP) charge for the energy and a Transmission and Distribution Utility (TDU) charge for delivering it (EIA on Texas retail choice). You pick and can switch the REP; you cannot pick the TDU, because the wires company is assigned to your address and its delivery rates are regulated by the Public Utility Commission of Texas (PUCT).
Oncor, CenterPoint Energy, AEP Texas, and Texas-New Mexico Power are the main TDUs. They run your meter, own the poles and lines, and handle the interconnection paperwork when you add solar, but they do not sell you electricity or set your solar credit. That is why two neighbors on different REP plans can pay very different rates on the exact same wires. If Oncor is your delivery utility, our Oncor solar guide covers its interconnection steps.
The deregulated shopping reality: buyback plans versus cheap-import plans
Because there is no statewide net metering mandate in Texas, the credit you earn for solar you export depends entirely on the REP plan you choose (U.S. Department of Energy on net metering; DSIRE Texas). This splits Texas plans into two rough camps, and the right one for you depends on how much of your solar you use at home versus send back.
| Plan type | Best when | The catch to verify |
|---|---|---|
| Solar buyback plan | Your panels export a lot of surplus power | The energy rate is often higher; the buyback rate and any cap change by plan |
| Cheapest-import plan | You use most solar as it is made (a battery or daytime load) | Little or no credit for exports, so surplus is nearly wasted |
Some providers market a solar buyback plan that credits the energy you send back at or near the retail rate; others offer a low import rate but pay little for exports, and the terms shift, so treat any buyback rate as a number to confirm on the plan’s Electricity Facts Label, not a fixed figure. The state-run Power to Choose marketplace lists offers, but always read the Electricity Facts Label before you sign. This plan choice, not a statewide rule, is what sets the value of every kilowatt-hour your roof exports.
See what solar and buyback options fit your Texas rate
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How your electricity rate drives solar payback
Solar pays in Texas because of the rate it replaces and the sun that drives it. The higher your cents-per-kWh rate, the more each unit of solar is worth. To put real numbers on it: a 6 kW rooftop system in Dallas produces about 9,202 kWh a year (NREL PVWatts). At the Texas average retail rate of 16.44 cents per kWh, that output offsets roughly $1,513 of grid electricity in a year (MySolarFY calculation from the EIA rate and PVWatts production, as of August 2026). Raise the rate you pay and that yearly figure rises with it; that is the core of Texas solar math.
Two levers move it further. First, your export credit: on a solar buyback plan, surplus power earns money instead of being given away, which shortens payback. Second, delivery charges: because the TDU portion is fixed per kWh, cutting how much you import cuts that charge too. For the full breakdown of system size, price, and payback years, see our Texas solar cost and payback guide, and the incentives that stack on top in our Texas solar incentives 2026 guide.
Where Texas is not deregulated
Not every Texan shops for a rate. Two kinds of areas sit outside the deregulated ERCOT retail market, and in both your rate and your solar credit are set by one utility, not a plan you pick.
Municipal utilities run their own rates and solar programs. Austin Energy uses a Value of Solar credit rather than plain net metering, CPS Energy in San Antonio credits exported solar and has offered a rebate, and Garland Power & Light serves Garland with its own municipal rates. If you live in one of these cities you do not choose a REP or a buyback plan, so verify the current rate and solar credit directly with the utility.
Regulated utilities outside ERCOT operate more like a traditional single-utility state. El Paso Electric serves the El Paso area and Southwestern Public Service (an Xcel Energy company) serves Amarillo and the Panhandle. Both are regulated vertically integrated utilities that offer real utility net metering for rooftop solar, so exported power is credited under the utility’s tariff. Confirm the current net-metering terms and rate with El Paso Electric or Xcel Energy before you size a system.
What to check before you switch plans or size a system
Because Texas rates and credits vary so much by provider and location, a few checks protect your solar payback. Verify each one against a primary source, not a sales quote.
- Your all-in rate. Read the energy charge plus the TDU delivery charge on your current bill, so you know the true cents/kWh solar is replacing.
- The Electricity Facts Label. On any deregulated plan, the buyback rate, base fee, and contract length live here. Confirm the buyback rate rather than trusting a headline.
- Whether your area is deregulated. Austin, San Antonio, Garland, El Paso, and Amarillo are not, so your credit comes from the utility, not a plan.
- Incentives that still apply. Texas has no state income tax and no state solar credit, but it does offer a property-tax exemption on the home value solar adds (Texas Tax Code Section 11.27, per the Texas Comptroller).
What about the federal tax credit? The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, so a Texas homeowner who buys solar with cash or a loan in 2026 cannot claim it. A separate commercial credit (Section 48E) can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner. None of that changes your electricity rate, which is why the rate and buyback plan now carry the payback math. Start a free match on our get started page or browse the full Texas solar hub.
Frequently asked questions
What is the average electricity rate in Texas in 2026?
The average Texas residential electricity price is about 16.44 cents per kWh as of the latest EIA data (May 2026). That is a statewide blend of the energy charge and the regulated delivery charge; your own rate depends on the retail plan you chose, so confirm it on your bill.
Why does my Texas electricity rate matter for solar?
Every kilowatt-hour your panels make replaces one you would have bought, so a higher rate makes each unit of solar worth more and shortens payback. At 16.44 cents per kWh, a 6 kW system producing about 9,202 kWh a year in Dallas offsets roughly $1,513 of grid power annually (MySolarFY estimate, as of August 2026).
Does Texas have net metering?
Not as a statewide rule. Most of Texas is a deregulated market with no net-metering mandate, so the value of exported solar depends on your Retail Electric Provider’s buyback plan. Austin Energy and CPS Energy run their own municipal programs, and El Paso Electric and Xcel Energy (Amarillo) offer regulated utility net metering.
What is a solar buyback plan in Texas?
A solar buyback plan is a retail electricity plan that credits you for the surplus solar you export to the grid, often at or near the retail rate. Buyback rates, caps, and the paired import rate vary by provider and can change, so verify the terms on the plan’s Electricity Facts Label before you sign.
Are electricity rates different in Austin, San Antonio, and El Paso?
Yes. Those areas are not part of the deregulated ERCOT retail market. Austin (Austin Energy), San Antonio (CPS Energy), and Garland are municipal utilities with their own rates, and El Paso Electric and Amarillo’s Xcel Energy are regulated utilities. In all of them you cannot shop a REP, so confirm the rate and solar credit with the utility.
Updated for 2026. Figures were verified against the linked EIA, NREL, U.S. Department of Energy, DSIRE, PUCT, and Texas Comptroller sources as of August 2026. Texas retail plans, buyback rates, and utility program terms change, so confirm the current rate and buyback terms with your provider or municipal utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY team and how we work, and browse more from our Texas solar hub.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase. Homeowners do not get the federal residential credit that ended after December 31, 2025; on a leased system the company that owns it claims any commercial credit. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.