Solar Panels in San Antonio, TX

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The low-down on solar panels in San Antonio.

In our previous article on going solar in Texas, we noted that Austin might be the most solar friendly city in the whole state. The reasons for this statement certainly haven’t changed – the municipal utility provides excellent net metering incentives and upfront rebates.

San Antonio, however, is giving Austin an all-out run for the money, with local homeowners eligible for incredible upfront rebates from CPS Energy worth thousands of dollars! In fact, San Antonio saw huge growth in solar throughout 2014 and 2015 and ranks 7th in the nation for solar capacity!

If you’re a San Antonio resident and are thinking about installing solar panels, take the plunge since these upfront rebates are some of the best in the country and you can get a solar installation on your roof for just a fraction of the total cost!

For a broader state overview, see our Texas Solar Energy page.

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#1 Overall Solar Grade

C+
Overall Grade
11 years Avg. Payback Time (For Cash Purchase)
5.88 % Estimate IRR (Return on your investment on cash purchase over 25 years)
$21,261 Your Net Profit Over 25 Years (Cash Purchase)

* Note that these are estimated values for informational purposes only, and do not take into account the full complexity of all financial projections. They also only apply to cash purchases, which means your numbers will be different if you lease your system or pay for it with a loan (factoring in interest). Also note that we are not financial advisors, so this information should not be construed as financial advice.

#2 Options for buying solar panels in San Antonio

For San Antonio residents, solar ownership is the name of the game. CPS Energy, the local utility, offers fantastic rebates, but only to homeowners who own their system. If you don’t want to own your installation? Take a look below at CPS’ new SolarHost program! If you do want to own your own system, you’ve got a couple of options available to you:

Cash upfront

If you’re looking to save the most money possible and have a few thousand dollars set aside, cash upfront is going to be your best bet. For an average-size 5 kilowatt system, homeowners financing with cash stand to save about $21,261 after 25 years! If you are a customer of CPS and your eligible for their upfront rebate (see below), you savings will be much higher, possibly up to $6,000 more!

As the sole owner of the installation, you’re eligible to receive all financial incentives, seriously lowering your total installation costs. Keep in mind though that this is a double edged sword since, as the owner, you are also responsible for all maintenance, monitoring and upkeep of the system. This isn’t too much of a worry, as solar installations have no moving parts that can break and almost all solar panels and inverters come with 10 to 15 year warranties.

If you don’t have enough money lying around to purchase an installation outright (honestly, who does?), then take a look at loans, which you give you a lot of the benefits of a cash upfront purchase without that hefty initial price tag.

Leases

Leases and power purchase agreements (PPA) aren’t offered in the San Antonio area, and since the upfront rebate is only available for homeowner-owned solar, you’re much better off financially if you pay cash upfront or take out a loan.

More: Solar Leases

Loan

Loans are becoming increasingly popular as a way to realize the positive benefits of ownership (the higher financial savings) while still paying little upfront. With a 15 year loan with 5% interest, with a 5 kilowatt installation you can expect to save around $13,935 after 25 years. Certainly lower than with a cash purchase, but still pretty high! Also keep in mind that, while we calculate our savings based on a 25 year lifespan for your solar installation, solar panels can last much longer, from 30 to 40 years even, so your actual savings could be much higher!

Homeowners can work with their bank or credit union for the loan (if they offer loans for solar installations), or dedicated solar loan companies.

As the homeowner is still the owner of the installation with a loan, you’re eligible for the federal tax credit and CPS’ rebate as well. You’re also responsible for all the maintenance, repair, and monitoring of the installation.

Financial payback from loans varies widely due to differing interest rates, loan details, and the total cost of the installation. If you’re interested in a solar loan, talk to your solar contractor, bank, or credit union for more information on what options are available to you.

More: Solar Loans

SolarHost Programsolar farm in san antonio

CPS Energy just began an interesting new solar program that other utilities in the southwest are beginning to offer as well.  If you can’t purchase your system and a loan doesn’t appeal to you, then check out their SolarHost program. By joining this program, you give CPS Energy permission to own and operate a solar installation on your roof. This program basically allows the utility to construct a large-scale solar power plant that, instead of being located on thousands of acres of land, is actually broken up and dispersed on their customers’ homes. Fascinating right? By enrolling in the program, you become part of this dispersed power plant!

Unlike purchasing a solar installation yourself, in the SolarHost program the electricity produced by the installation on your roof doesn’t go to your home to power your lights and electronic devices, but instead goes directly to the grid. You’re then paid $0.03 per kilowatt-hour that the installation produces.

So, for example, if they install an average-sized 5.6 kilowatt system on your south-facing San Antonio roof, it would produce about 8,400 kilowatt-hours annually (according to the National Renewable Energy Lab’s PVWatts solar calculator) and you’d make about $250 a year. Not too bad for doing absolutely nothing besides letting someone use a section of your house that no one is ever going to use otherwise. Since CPS is the owner, you don’t have to worry about maintaining the installation and at the end of 20 years, CPS will remove all the solar panels at their own cost.

The SolarHost program is an interesting option and if you can’t or don’t want to purchase your own installation, certainly look into the program. You’re still contributing to a greener future and you get a little extra cash in your pocket to boot. However, if you’re out for ultimate financial savings, purchasing with cash upfront or a loan is probably still your best option.

#3 Financial Incentives, Rebates, and Tax Credits

Like homeowners across Texas, San Antonio residents are eligible for federal tax credits as well as state-sponsored tax exemptions. But the real kicker for San Antonio locals is the upfront rebate from your local municipal utility CPS Energy!

Renewable Portfolio Standard (RPS)

To encourage utilities to both install solar and promote the technology amongst its customers, 29 states have passed RPS mandates, requiring a certain percentage of electricity must come from renewable sources by a certain date. Washington state has a goal of 15% by 2020. Ohio set a goal of 25% by 2024.

When Texas restructured its energy market in 1999, the state also set a goal that 5,880 MW by 2015 and 10,000 MW by 2025. The state’s electricity generators had already passed that goal by 2009, installing 13,359 MW of renewable energy! A great feat, though a bit lopsided as 96% of the energy came from wind power. The 1999 legislation also set a goal that 500 MW of electricity must come from solar by 2015, but electricity generators who don’t comply with this particular goal aren’t penalized in any way, so this ‘solar carve-out’ (as its known in the solar and utility industry) is really a recommendation more than a mandate.

To continue encouraging the growth of the solar industry, the state really needs to consider adopting higher goals for the future, like California’s 50% by 2030 goal.

Electricity Prices

The 1999 restructuring was meant to drive electricity prices down by creating an open market where homeowners and businesses can choose who they want to purchase electricity from. It seems to have worked, as Texas’ average utility rate of $0.109 per kilowatt-hour is some of the lowest in the country! The lowest is Louisiana, at $0.0916 per kWh, and the highest is Hawaii at $0.2848 per kWh, almost 3 times higher!

But with less expensive electricity, comes less potential savings from going solar. Don’t start frowning just yet though. As we’ve seen above though, homeowners in San Antonio can san still save thousands, even if the electricity prices are low!

Net Metering

Texas currently has no state-wide net metering program and doesn’t mandate that energy companies must compensate customers who produce excess electricity that is added to the grid.

In fact, there’s only one electricity offering net metering to its customers: Green Mountain Energy through its Renewable Rewards program. When you enroll in the program, 100% of your electricity is sourced from renewable sources (typically wind) and they also provide credits for any excess electricity you put back in the grid with your solar installation, at full retail value!

Electricity prices for renewably-sourced electricity are typically higher than electricity from ‘traditional sources’, so be sure to call and ask for more information on this program before moving forward.

Interconnection Rules

In 1999, Texas also passed a standardized interconnection process to ensure homeowners can easily connect their solar installation to the utility grid. Systems under 500 kW (well above residential installations sizes) are fast-tracked through the interconnection process and the homeowner or business doesn’t have to pay any study fees as well (which can be quite costly for a large installation).

#4 Incentives, Rebates, and Tax Credits for Going Solar

Like homeowners across Texas, San Antonio residents are eligible for federal tax credits as well as state-sponsored tax exemptions. But the real kicker for San Antonio locals is the upfront rebate from your local municipal utility CPS Energy!

Federal Tax Credit

Homeowners across the country, including San Antonio, who purchase their solar installation in cash or through a loan are eligible to receive the federal 30% renewable energy tax credit. This is a full-on tax credit, not a deduction, so it’s a dollar-for-dollar monetary value. In essence you’re getting a 30% discount on your installation! Couple this with your upfront rebate from CPS and you’re looking at knocking thousands of dollars off your installation!

Just to drive home how sweet a deal this is, let’s look at an example:

Let’s say you install a 5.6 kilowatt system at the national average of $2.93 per watt (your installation cost might differ based on your installer). At this price, your total installation cost adds up to $16,408. The CPS Energy rebate drops that price down to just $9,688. After applying the 30% tax credit, your total price drops even further to just $4765! Talk about a sweet discount!

More: Solar Federal Tax Credit

Upfront Rebate from CPS Energy

For homeowners who own their own system, CPS Energy offers some really excellent upfront rebates that equate to thousands of dollars directly in your pocket! CPS has allocated $30 million to the rebate program in an attempt to encourage local homeowners and businesses to install solar. As the program matures and more solar is installed, the rebate decreases until that $30 million is all used up:

  • First $10 million of rebates: Homeowners receive $1.20 per watt – an incredibly high amount!
  • Next $10 million: $1.00/watt
  • Last $10 million: $0.80/watt – still not too bad!

So, if you install an average-sized 5.6 kilowatt system and CPS is still offering $1.20/watt (which they are at the time of writing), you get $6,720 instantly in your pocket! If you’re last on the bandwagon and install when rebates are $0.80/watt, you’d still get $4,480!

For residential applications, the total rebate is capped at $25,000 or 50% of your total project cost. Also, to spur growth of the local solar industry, CPS reduces your total rebate amount to 75% if you don’t use a local installer, so choose wisely! (A tip to help you make sure you get your full rebate: CPS publishes a list of approved local solar contractors on their website, so go take a look.)

Property tax exemption

To sweeten the deal even more, the state of Texas offers a property tax exemption for the additional value a solar installation adds to your property. So for example, let’s say you install a $30,000 solar system on your beautiful $150,000 home, you’d still only pay property taxes for $150,000!

Want to take advantage of the rebates and tax credits and start producing your own clean renewable energy? Head on over to CPS Energy’s website to learn more about their rebate program as well as look over their list of approved contractors. Once you’re ready to move forward, talk to a few installers and get a few quotes to compare cost and savings. Your contractor will help you work with CPS Energy to ensure your eligibility for the rebate and help you along in the process step by step. Once your installation is complete, kick back and enjoy your new green electricity and extra dough in your pocket!

What to do next?

Want to take advantage of the rebates and tax credits and start producing your own clean renewable energy? Head on over to CPS Energy’s website to learn more about their rebate program as well as look over their list of approved contractors.

Once you’re ready to move forward, talk to a few installers and get a few quotes to compare cost and savings. Your contractor will help you work with CPS Energy to ensure your eligibility for the rebate and help you along in the process step by step. Once your installation is complete, kick back and enjoy your new green electricity and extra dough in your pocket!

Image Credit via Flickr under CC License

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