Solar Panels for Home Energy: Pros & Cons

With the amount of sun we get, Texas is ranked second in the nation for solar installations, but there are definitely pros and cons to solar power. Solar panels cost upwards of $15k to install, and while you can likely expect a return on your investment, it takes an average Texan 12 years to pay back the initial cost. Luckily, there are free solar programs, tax incentives and rebates that help combat the cost—or Energy Ogre can help you find 100% renewable energy plans that increase your sustainability without solar’s expensive price tag. Learn more about solar energy and decide for yourself if it’s right for you.

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What is Solar Energy?

If you've ever wondered where does solar energy come from, you’ve probably guessed the sun—and you’d be correct. According to Solar Energy Industries Association (SEIA), solar power is energy from the sun that is converted into thermal or electrical energy. It’s also the cleanest and most abundant energy resource our planet has to offer, but how do panels on your roof translate to possibly lowering your electricity bill?

How do Residential Solar Panels Work?

Once you’ve decided to install solar panels, there are a lot of questions that come up. How much do solar panels weigh? Will solar panels work on an east facing roof? How big is a solar panel? Luckily, we can answer these. The average solar panel is about 3x5 feet, they’ll work no matter the direction they face, and you’ll likely need 15-18 panels for a home roughly 1500 square feet. But how they actually work is the interesting part: The sun shines onto them and photons from the sunlight are absorbed by the cells in the panel. According to the Department of Energy, this process creates an electric field across the layers and causes electricity to flow. And while solar panels do need direct sunlight, solar panels work on cloudy days, too. What’s most impressive is how long solar panels last—up to 25-30 years! 

How Solar Panels Work

What are the Advantages of Solar Energy?

If you’re wondering why solar panels are good or how solar energy affects the environment, we’re breaking it down so you can determine for yourself whether you’d like to make the switch.

Solar Energy is a Renewable Energy Source

According to the EPA, some environmental and economic benefits to using renewable energy include: 

  • A diversified energy supply and a reduced dependence on imported fuels
  • New economic development that increases jobs in engineering, manufacturing and installation
  • Energy that doesn’t produce greenhouse gas emissions from fossil fuel

Renewable Energy is Better for the Environment

It makes sense that increasing our use of renewable energy would allow us to significantly reduce US global warming emissions. By reducing the amount of carbon and pollutants in the environment, it translates to less pollution, cleaner air and cleaner water. And when it comes to improving our planet, it’s a good option.

What are the Disadvantages of Solar Energy?

The negative environmental effects of solar energy are few and far between, but there are important economic factors at play. Plus, you need to really think about what your goal of going solar is. 

“Some people want to be green, to be green, which is awesome,” said David Kinchen, Energy Ogre’s Chief Operating Officer. “Other people are looking at it like, ‘I want to have something that's saving money.’ And the solar part today may not fit that bill. Right now in Texas, it's going to be really hard to put on a solar application, and have it actually save you money versus just simply being in a cheap electricity plan.”

Now, that’s not to say it will always be that way. As technology continues to improve, the cost of solar panels may go down, and having better battery storage could help things as well.

Solar Panels are Expensive to Install and Repair

The number one barrier to entry when it comes to solar energy is the cost. As we’ve mentioned, prices for solar panels can vary greatly. Consumer Affairs suggests you can install a smaller system for close to $5,000, while a larger and more developed solar panel system can cost $40,000 or more. Those costs don’t even account for any possible repairs that may occur in the future. There are different financing options available: a solar loan, lease, or power purchase agreement.

What is a Solar Loan?

A solar loan, much like a regular loan, is money you get from a lender to help you finance your solar panels. Some solar system retailers will offer you a secured loan upon purchase—and while these have a lower interest rate, they do require you to pledge collateral. If you prefer an unsecured personal loan, you can expect higher interest rates, but at least your panels won’t be repossessed if you default on the loan. Another option would be applying for a home equity loan which also comes with lower interest rates, but your home is on the line should you be unable to pay.  

No matter which route you go, remember that taking out loans will reduce the financial advantages of your solar system and may negate why you wanted to go solar in the first place. Check out this solar loan calculator to see if this financing option works for you. 

What is a Solar Lease? 

A solar lease is exactly how it sounds: you can rent solar equipment from solar companies for a fee. They’ll do the installation and retain ownership, but you’ll get to experience what solar panels are like for yourself. Be sure to do the math and check that even with the added rental fee, will your electricity bill be cheaper?  

What is a Power Purchase Agreement?

A power purchase agreement is relatively similar to a solar lease. A third-party company will install and maintain your solar panels, but instead of paying a rental fee, you pay for the actual electricity produced by the panels. It’s kind of like having your own personal power plant at home—and the costs come out similar to that of a lease.  

Solar Panels Don’t Work at Night

One reason why people think solar energy is bad is partly due to the panels' inability to work at night. But just because your solar panels don’t produce energy at night doesn’t mean there aren’t other ways to harness solar power. With buyback programs through retail electricity providers, you can get money back from sending your unused electricity during the day to get energy credits at night. However, it’s important to realize there are some programs that are uncapped, but more that are capped. In the cases where you have a capped buyback program, you may not end up getting anything for some amount of your unused electricity.

What is Net Metering?

Net metering is an electricity billing system that helps you offset your solar panels’ non-working hours of the night by selling back excess electricity generated during the day. Texas does not currently have a statewide net metering policy.  This means you can't net your Transmission/Distribution Service Provider (TDSP) charges against what you produced and sent back - meaning you pay for all demand charges you consume without the ability to offset. Buybacks rely on a meter being able to read both consumption and surplus. So currently at night in Texas, most solar homeowners still have to pay for electricity load charges.

Solar Panels Can't Store Energy 

The panels themselves don’t store energy, but many people choose to include battery storage when installing a solar energy system. This ensures your household will draw energy from the solar battery storage (which has been filled up by the panels during the day) before drawing from the grid. However, if you’re concerned about using too much electricity for your system, check out our energy conservation guide to find out how to reduce your daily usage.

Possible Trouble in Selling Your Solar Home

While solar panels can absolutely increase your home sale value, it can also be a bump in the road. Depending on if you’ve bought the solar panels, financed or leased them, there are financial ramifications. Some buyers may not want a home with solar panels due to concerns about upkeep. Others may not want to take over a solar lease or pay off the rest. Texas Realtors lists off how solar panels could affect a transaction for your home.

How Much Does a Solar Panel System Cost?

According to Consumer Affairs, the starting cost to install a 6-kW solar system is $14,820 in Texas. That means the average cost per watt is $2.60. Whether you’ll need a bigger or smaller system depends on the size of your home and the amount of energy you (and your household) typically consume per month. You can check old electricity bills to get an idea of how many panels you’ll need to power your home. Obviously how much it costs to install solar panels is a big payment upfront, but the payout over time is a strong advantage when thinking about solar options. 

How Much Electricity Does a Solar Panel Produce?

When trying to determine how much energy a solar panel produces, we first need to understand kilowatt hours. Solar panel systems are measured in terms of kilowatts (the amount of electricity you use at a specific time). According to Energy Sage, most solar panels available in 2022 will usually produce between 250 and 400 Watts of power. The actual output will depend on factors like shading, orientation, and sun hours.

How Many Solar Panels Do I Need to Power My Home?

Trying to figure out how many panels to install is easiest if you know your annual energy usage. For reference, the U.S. Energy Information Administration (EIA) shows the average Texas household uses about 14,000 kWh of electricity per year—but you can check your own by looking at your bill. Next, you need to know the wattage of the panels you’re wanting to install (you can expect most solar panels to offer 300 watts of power). Multiply your energy usage by the number of sunlit hours your home gets, then divide that number by the wattage of the panels you want. Or, skip the math and try this solar panel calculator from Project Sunroof.

Home Square Footage & Estimated Number of Solar Panels Needed

Annual Energy Consumption (kWh)Approximate Square FootageEstimated Number of Panels Needed
4,710 kWh/year1,000 sq ft14
9,420 kWh/year2,000 sq ft29
11,775 kWh/year2,500 sq ft35
14,130 kWh/year3000 sq ft42
Source: Energy Sage

And don’t forget! Because we can’t predict the weather, it’s suggested to have about 25% more panels than you think you’ll need for those days of rain or snow.

Do Retail Electricity Providers (REPs) Offer Renewable Energy Plans?

Yes! ERCOT’s fuel generation is seeing more and more renewables, with wind and solar combining to approach close to 40% of generation capacity in Summer 2022. How does that get to you? REPs are still responsible for buying renewable energy credits (RECs) to ensure everyone enrolled in a renewable energy plan gets the electricity they need. So, whether you’re interested in solar, wind, hydropower, geothermal or biomass electricity, REPs will make sure you get what you need.

Interested in going green? Energy Ogre connects you with 100% renewable energy plans that help save the planet—and keep your electricity bills low.

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Texas Solar Incentives, Tax Credits, Rebates

Because of how much solar energy costs, it’s worth looking into other renewable options. But if you're committed to harnessing the power of the sun, here’s a resource from the Database of State Incentives for Renewable Efficiency that breaks down clean energy programs by zip code. While there’s no one way to get free solar panels from the government, there is the federal solar tax credit program—which offers a 22% return on your solar installations. And if you’re paying upwards of $15k on the installation, you’d get a pretty penny back. 

There are also REP solar buyback rates or regulated utility solar buyback rates (depending on where you live in the state).

In deregulated areas of Texas, you can pick an REP that offers solar buyback rates in the form of uncapped credit plans, credit cap plans, or real-time metering plans. It’s a great option if you consistently generate more solar energy than you’re able to use.

If you live in the regulated part of Texas, you’ll find that your utility provider either offers solar buyback plans or they don’t. Unfortunately, there isn’t much you can do if you have a bad plan, but it may influence whether you make the switch to solar energy in the first place.

Are Solar Panels Worth it in Texas?

Texas sees an average of 234 sunny days in a year—so yes, solar energy seems like a viable option. The tough sell on going totally solar, however, is the cost. It is a major upfront investment and it takes a while to pay off. In that time, technology could improve and things could become more available and cheaper. So in the meantime, Energy Ogre meets our members with clean energy solutions that don’t require the same investment. With thousands of megawatts of solar electricity coming onto the grid in the next twelve months, the availability of 100% renewable energy plans will only increase. Make the switch to a renewable plan with Energy Ogre—you, your wallet and the planet will thank you.

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