Texas Solar: Complete State Guide for EPCs, Installers & Developers

Published September 09, 2026 · RIH Engineering · 7 min read

Texas has emerged as one of the largest solar markets in the United States by both distributed and utility-scale capacity, driven by rapid population growth, expanding commercial development, high summer electricity demand, and abundant land for utility-scale solar deployment. But installing solar panels in Texas requires understanding a utility structure unlike most US markets: the deregulated Electric Reliability Council of Texas (ERCOT) grid, the split between Transmission and Distribution Utilities (TDUs) and Retail Electric Providers (REPs), and the specific municipal utility and cooperative territories that operate outside the deregulated retail market. This guide walks solar EPCs, installers, developers, and property owners through the Texas solar market landscape.

Texas solar market context

Solar panels in Texas have scaled dramatically over the past decade. Texas leads or trails only California for total installed solar capacity across residential, commercial, and utility-scale segments. Growth drivers include:

• Massive utility-scale solar development driven by ERCOT market dynamics and favorable land economics
• Rapid residential population growth creating sustained demand for rooftop solar
• Growing commercial and industrial solar adoption
• High summer electricity demand from air conditioning driving strong solar-friendly load profiles
• Abundant sunshine hours across most of the state
• Extensive land availability for utility-scale development in West Texas and other regions

ERCOT and the deregulated Texas electricity market

Most of Texas operates under the Electric Reliability Council of Texas (ERCOT) grid, which is a separate interconnection from the Eastern and Western Interconnections that cover most of the US. ERCOT territory covers approximately 90 percent of Texas load and is regulated by the Public Utility Commission of Texas (PUCT).

Within the ERCOT competitive retail market, electricity delivery and electricity sales are legally separated:

• Transmission and Distribution Utilities (TDUs): own and maintain the poles, wires, meters, and distribution infrastructure. TDUs deliver electricity to end customers but do not sell it. TDUs handle solar interconnection applications and technical review.
• Retail Electric Providers (REPs): compete to sell electricity to end customers under various pricing plans. Customers choose their REP. REPs handle billing, customer service, and set the rates customers pay for both electricity delivered and, where applicable, electricity exported from solar.

Texas does not have traditional statewide net metering. Solar economics in ERCOT territory depend on the REP the customer chooses. Some REPs offer solar buyback plans with various structures; others do not offer meaningful compensation for exported solar. Solar EPCs and installers in Texas help customers select an REP aligned with their solar system economics.

Texas TDU landscape

The four major TDUs serving ERCOT territory:

• Oncor Electric Delivery: serves the Dallas-Fort Worth metroplex and much of North Texas
• CenterPoint Energy: serves the Houston metropolitan area and surrounding regions
• AEP Texas: serves South Texas and West Texas territories
• Texas-New Mexico Power (TNMP): serves various portions of Texas including areas along the coast, in North Central Texas, and around Amarillo

Each TDU has its own interconnection application forms, SLD conventions, and technical requirements. Solar EPCs serving Texas need to identify the correct TDU for each project address.

Municipal utilities and cooperatives (outside ERCOT retail deregulation)

Not all of Texas operates under ERCOT retail deregulation. Several significant municipal utilities and cooperatives serve substantial territories under different structures:

• Austin Energy: municipal utility owned by the City of Austin, serves the City of Austin
• CPS Energy: municipal utility serving San Antonio, one of the largest municipal utilities in the US
• El Paso Electric: investor-owned utility serving El Paso and surrounding area, operates outside ERCOT (in the Western Interconnection)
• Southwestern Public Service (SPS): serves the Texas Panhandle
• Pedernales Electric Cooperative (PEC): large member-owned cooperative serving Central Texas Hill Country
• GVEC (Guadalupe Valley Electric Cooperative), Bluebonnet Electric Cooperative, and other cooperatives serving various rural areas

Each has its own interconnection process and solar policies distinct from the ERCOT REP/TDU structure.

Solar panels in Texas: design considerations

Installing solar panels in Texas requires design attention to:

• Extreme summer heat driving conductor and equipment derating (similar to Arizona considerations, though slightly less extreme)
• Hail exposure across much of North and Central Texas, driving module and racking selection
• Hurricane wind exposure along the Gulf Coast, particularly Houston metro and Corpus Christi
• Wind loads from severe storms across the state
• Occasional freeze events (February 2021 winter storm impact on ERCOT grid demonstrated the need for freeze consideration)
• Rapid growth in suburban residential construction supporting straightforward modern racking

Texas solar incentives

Texas does not have significant state-level solar incentives comparable to California, Massachusetts, or New York. The primary solar incentives available to Texas customers are:

• Federal Investment Tax Credit (ITC) at 30 percent for qualifying residential and commercial projects
• Property tax exemption for the added value of residential solar installations
• Various city and utility-specific incentives (Austin Energy Solar Rewards, CPS Energy solar programs, others) available to customers in those service territories
• REP-specific solar buyback plans in ERCOT territory (varies significantly by REP)

Texas building codes and electrical codes

Texas jurisdictions adopt varying editions of the International Building Code, International Residential Code, and National Electrical Code with local amendments. Some Texas jurisdictions have not adopted current code editions and enforce older editions. Always verify the currently enforced editions with the AHJ where the project is located.

PE stamping in Texas

Commercial and larger residential solar projects in Texas generally require Texas-licensed Professional Engineer stamps. Smaller residential projects may not require PE stamping depending on the AHJ and project size. Structural PE stamp is required for structural analysis and racking design; electrical PE stamp is required for electrical design in many jurisdictions. Texas has Board of Professional Engineers licensing separate from other states, so PE-of-record for Texas projects must be Texas-licensed.

Key Texas solar AHJs

Texas solar permit issuance is at the municipal level in incorporated cities and at the county level in unincorporated areas. Solar EPCs and installers should maintain AHJ-specific workflows for their most active jurisdictions:

• City of Houston Department of Public Works Permitting
• City of Dallas Development Services
• Fort Worth Development Services
• City of Austin Development Services
• City of San Antonio Development Services
• Numerous suburban city development departments across the DFW metroplex, Houston metro, Austin metro, and San Antonio metro
• County-level departments for unincorporated areas

Community solar in Texas

Texas community solar market has been more limited than states with dedicated community solar programs (New York, Massachusetts, Illinois, Minnesota). Some community solar projects operate in Texas through utility-specific programs and REP-facilitated structures. Growth in Texas community solar continues but at slower pace than states with structured statewide community solar programs.

Utility-scale solar in Texas

Texas leads the US in utility-scale solar development, with substantial installed capacity and even more in the ERCOT interconnection queue. West Texas, Central Texas, and South Texas host the largest concentration of utility-scale solar farms. Utility-scale solar EPCs, developers, and equipment vendors have concentrated significant operations in Texas serving this market.

Common Texas solar permit rejection reasons

• Structural analysis inadequate for Texas wind and hail conditions
• TDU SLD format not matching Oncor, CenterPoint, AEP, or TNMP conventions
• Conductor sizing not adjusted for Texas ambient temperature derating
• PE stamping missing where required (must be Texas-licensed)
• Fire code pathway and setback requirements not clearly documented
• Rapid shutdown boundary and initiation devices not correctly documented
• REP selection details inconsistent with system export design
• Wrong AHJ format submitted (city plan set filed to county, or vice versa)

Where outsourced solar design fits into the Texas market

The Texas solar market's combination of ERCOT deregulated structure, multiple TDU utility formats, extreme design conditions (heat, hail, hurricane wind), and multi-jurisdictional AHJ landscape creates a market where outsourced design expertise materially improves permit success and project delivery. Solar EPCs and installers benefit from outsourced design partners fluent in Texas TDU formats, Texas PE-of-record workflow, and Texas structural design conditions.

RIH Engineering provides outsourced solar PV design for EPCs, installers, and developers operating across Texas including the DFW metroplex, Houston metro, Austin metro, San Antonio, and utility-scale project locations across West Texas. If you want to talk through how outsourced design fits your Texas pipeline, get in touch.

Frequently asked questions