As a Texas homeowner, you can save money on your energy bills by installing solar panels and taking advantage of net metering. Net metering allows you to generate your own electricity and export any excess to the grid, reducing your reliance on traditional energy sources. With the right plan, you can significantly reduce your energy costs and even earn credits for excess energy produced. However, it's essential to understand how net metering works in Texas to maximize your savings
Based on federal consumer protection law and HUD/CFPB public guidance · Last reviewed July 2026
The Direct Answer
Net metering in Texas allows homeowners to generate their own electricity using solar panels and export any excess energy back to the grid. The excess energy is measured by a bi-directional meter, which tracks both the energy you consume and produce. For every kilowatt-hour (kWh) of excess energy you produce, you earn a credit that can be applied to your energy bill.
For example, if you produce 500 kWh of excess energy in a month, you would earn 500 credits. These credits can be used to offset your energy consumption in future months, reducing your energy bill. If you produce more energy than you consume in a year, you may be eligible for a payment from your utility company for the excess credits, although this varies by provider and their specific net metering policies
Before installing solar panels, check with your utility company to confirm their net metering policies and any requirements or restrictions that may apply. Some utility companies may have specific rules or fees associated with net metering, so it's essential to understand these before making a decision
How Net Metering Works in Texas
Calculating Your Savings
To calculate your savings with net metering, you'll need to consider the amount of energy you produce and consume. Your utility company will provide you with a net metering agreement that outlines the terms of your program, including the rate at which you'll be credited for excess energy produced. Be sure to review this agreement carefully to understand how your credits will be calculated and applied. You can also use online tools or consult with a solar panel installer to estimate your potential savings based on your energy usage and solar panel production.
Choosing the Right Plan
Understanding Your Options
When choosing a net metering plan in Texas, you'll need to consider your energy usage patterns and the amount of energy you expect to produce. Some utility companies offer tiered plans that provide different credit rates for excess energy produced, while others may offer a flat rate. Be sure to compare plans and providers to find the one that best meets your needs and maximizes your savings. You may also want to consider factors like the cost of installation, maintenance, and any potential incentives or rebates available for solar panel installation
Tax Incentives and Rebates
Federal and State Incentives
In addition to the savings you'll earn through net metering, you may also be eligible for federal and state tax incentives and rebates for installing solar panels. The federal government offers a tax credit of up to 26% of the total cost of your solar panel system, while the state of Texas offers a property tax exemption for solar panel systems. You may also be eligible for rebates or incentives from your utility company or local government, so be sure to research these options to maximize your savings
Start Saving with Solar
Contact a solar panel installer or your utility company to learn more about net metering and start saving money on your energy bills today. With the right plan and installation, you can reduce your energy costs and contribute to a more sustainable future
To apply for net metering in Texas, you'll need to contact your utility company and provide information about your solar panel system, including the size and type of system you plan to install. You'll also need to sign a net metering agreement that outlines the terms of your program, including the rate at which you'll be credited for excess energy produced. Your utility company may also require you to install a bi-directional meter to track your energy production and consumption
Can I sell my excess energy credits to another utility company?
In Texas, excess energy credits are typically only applicable to your own energy bill with your utility company. However, some utility companies may offer programs that allow you to sell your excess credits to other customers or back to the grid. Be sure to check with your utility company to see if they offer such a program and what the terms and conditions are
How long do net metering credits last?
Net metering credits in Texas typically expire after 12 months, although this can vary depending on your utility company's policies. Be sure to review your net metering agreement to understand how credits are applied and any expiration dates that may apply. You may also want to consider using your credits as soon as possible to maximize your savings
Are there any upfront costs associated with net metering?
While there may not be any direct costs associated with net metering itself, you'll need to consider the cost of installing a solar panel system, which can range from $15,000 to $30,000 or more, depending on the size and type of system you choose. However, with the savings you'll earn through net metering and potential tax incentives and rebates, the upfront cost of installation can be offset over time