How to Find Cheap Electric Rates in Texas

Texas is a state where the electricity provider industry has been deregulated, giving homeowners and businesses the power to choose from a large and growing number of electric providers. With this choice comes a variety of options. You can select an offer based on price, contract terms, green or renewable energy options or any other factors that may be most important to you.


Fixed, Variable, and Indexed Electricity Rates

The rate you pay per kilowatt hour for your electricity will vary largely dependent upon the type of rate it is. A fixed rate, for instance, will generally not change throughout the contract term, while a variable rate can rise or fall every month in accordance with the method defined by the provider. An indexed rate is also variable according to a specified price formula also defined by the provider.


Contracts and Terms

While some plans are basically month-to-month with no minimum length of contract required, others may require contract periods of one, two or even three years or longer. These contracts impose a penalty if you cancel them prior to the end of the term. Generally, the longer the contract, the lower the pricing you will be able to lock in.


Green or Renewable Energy Sources

Many providers offer electricity that comes from renewable sources, such as solar, wind, hydroelectric, landfill gas, geothermal or biomass. Electricity generated from natural gas is also designated as "green." Although the electricity that you draw from the grid may not come directly from these renewable sources, when you opt to purchase from a renewable source, sufficient energy from that source will be added to the grid to replace the "brown" energy you are actually using.


Electric Assistance Programs

Many low-income residents are eligible to receive significant reductions on their electric rates. If you are a low-income electric consumer with a choice of retail electric providers, you may be eligible for a discount program for low-income families known as LITE-UP Texas. The program provides discounted rates on summer electric bills in the months of May through August for qualifying low-income electric consumers.


Incentives for Energy Efficiency and Renewables

A number of tax incentives for energy efficiency and renewable energy are available from the federal government. State of Texas residents may also want to check with their local utility providers about energy efficiency programs that may offer inexpensive loans or rebates, as well as helpful information on purchase and installation of renewable energy technology equipment.

The State of Texas also offers tax incentives, including franchise tax deductions or exemptions for businesses that utilize, install or manufacture wind or solar energy, as well as a property tax exemption for businesses that install or construct wind, solar, biomass and anaerobic digestion systems.

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