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What is the Cost per Commercial Kilowatt Hour in Texas?

In Texas, the current cost per commercial kWh is 8.68¢.

(Updated August 2023)

From small businesses to huge corporations, each business has different needs when it comes to energy. While some local and small businesses may be able to get by on a small amount of electricity for a smaller space, others will need a lot more to power an entire warehouse or office building. That’s where commercial kilowatt-hours (kWh) come in.

A kilowatt-hour is exactly what it sounds like:, a unit of energy that describes one kilowatt of power per hour. So, the cost per kWh is simply the cost of having one kilowatt of power supplied to you for one hour. This cost varies depending on the market and the size of the space you are operating.

Cost of Electricity in Texas

Commercial electricity rates in Texas are lower than the national average, with an average rate of 9.89¢ per kWh for commercial electricity and 13.53¢ per kWh for residential electricity. This is largely due to the abundance of natural gas in the state, which is used to generate most of Texas’s electricity. However, prices can vary widely based on your location, building size, type of business, and energy needs.

It’s important to note that the actual cost consumers pay depends on their energy plan. On a fixed-rate plan, costs will be the same each month, while a variable-rate plan will have a rate that fluctuates with the market. For Texans, this means that it’s important to compare rates and plans before signing up for service.

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Cost of Solar Power per kWh

In Texas, like in many states, solar power is becoming increasingly more affordable, and businesses that switch to solar can save money in the long run because of the reduced average commercial electricity cost per kWh. In fact, over the course of 25 years, the solar power rate per kWh was 3.9 cents while utility power costs 20.4 cents per kWh. This means that solar is a much cheaper option for powering your business in Texas in the long term. If you’re looking to save money on your energy bill, switching to solar is great. The average cost of a solar panel system in Texas is currently cheaper than the average cost of utility power over 25 years.

The cost of commercial solar in Texas has been dropping rapidly in recent years, and is now lower than the average cost of residential solar across the United States. This is largely due to the increased availability of solar panels and the decreasing cost of installation. Solar panels usually have a warranty of 25 years, meaning that they will produce electricity for your business over that time period with little to no maintenance required. This makes solar a very attractive option for business owners who are looking to save money on their energy bills and simultaneously help the environment.

Cost Factors for Commercial kWh Rates in Texas

Electricity prices in Texas are determined by a variety of factors, the most important of which are:

Type of customer

Commercial customers usually have different rates than residential customers. This is because businesses use more electricity than households. Commercial rates are also set based on the electricity demand. The higher the demand, the higher the rate.

Time of year

Residential energy rates are usually based on time of use. There are three different time-of-use rates: peak, shoulder, and off-peak. The peak rate is charged when electricity usage is highest, usually during the summer months. The shoulder rate is charged during times of medium demand, and the off-peak rate is charged during low-demand periods.

Source of power

This is also a factor in electricity pricing. Renewable sources of energy like wind and solar are becoming more common, but they are still not as prevalent as traditional sources like coal or natural gas. Because renewable sources are not as reliable or consistent as traditional sources, they tend to be more expensive, but as they’re gaining popularity the costs are trending down. This is especially true when demand is high and traditional sources are being used to meet it. Understanding how these factors work can help customers make informed decisions about their electricity usage and budget.

Cost for Commercial kWh Rates in Texas

Overall, the cost of electricity in Texas is typically below average when compared to the rest of the United States. The average price per kilowatt-hour (kWh) in Texas is 8.68 cents, which ranks it 27th among states. However, prices can vary widely depending on your location and energy needs. For example, businesses in Houston pay an average of 9.78 cents per kWh, while businesses in El Paso pay an average of 11.48 cents per kWh.

If you’re looking for a better cost per commercial kilowatt hour in Texas, the average commercial electricity cost per kWh, or commercial kWh rates, be sure to check out our energy blogs and informational pages. Always make sure you consider all factors that add up to the commercial kWh rates in Texas to make the most informed choice for your home or business.


We’ve helped over 40,000 businesses like yours find the best energy rate on the market! Whether you are looking for energy quotes for your home or business, we can help you find the best rates available. You can get a residential quote at PricetoCompare.com and a commercial quote at IntegrityEnergy.com

Frequently Asked Questions (FAQ)

Q: How do the commercial kWh rates in Texas compare to other states in the country?

A: Compared to other states in the country, Texas often has relatively competitive commercial kWh rates due to its robust energy market and significant energy production capacity, particularly in wind and natural gas. Additionally, Texas benefits from a deregulated energy market, which fosters competition among electricity providers, leading to more choices for consumers and potentially lower rates.

Q: Are there any government incentives or rebates available for businesses looking to switch to solar power in Texas?

A: Yes, there are government incentives and rebates available for businesses interested in switching to solar power in Texas. The state of Texas offers various incentive programs and tax credits to encourage the adoption of renewable energy sources like solar power. One notable incentive is the Federal Investment Tax Credit (ITC), which allows businesses to deduct a portion of the cost of installing solar energy systems from their federal taxes. Additionally, Texas has a property tax exemption for solar and other renewable energy systems, reducing the property tax burden on businesses that invest in solar installations. 

Furthermore, some local utilities and municipalities in Texas may offer additional rebates or incentives for businesses that install solar panels, such as performance-based incentives or grants for solar projects. However, the availability and specifics of these incentives may vary depending on factors such as the size and location of the solar project, so it’s advisable for businesses to research and consult with solar energy experts to explore all available incentives and rebates for their specific circumstances.

Q: How do businesses accurately gauge their electricity usage to make informed decisions when selecting the right plan? Are there tools or resources to help analyze energy consumption patterns and predict future electricity needs?

A: Businesses can accurately determine their electricity usage by implementing energy monitoring systems and conducting regular energy audits. Energy monitoring systems collect data on energy consumption in real-time, allowing businesses to track usage patterns and identify areas for improvement. Energy audits involve analyzing historical energy usage data, conducting on-site inspections, and identifying opportunities for energy efficiency improvements. Additionally, businesses can consult with energy professionals or utilize online tools provided by energy providers to estimate their future electricity needs based on factors such as business growth projections and seasonal variations in energy demand.