Some Texas electricity companies offer no-deposit energy for Texans wanting to avoid large upfront costs or credit checks.
In deregulated areas of Texas, where you have the power to choose your plan, most providers run a credit check during the enrollment process. Depending on your credit score and payment history, a soft credit check can result in a deposit requirement.
You can skip the upfront payment by enrolling in a no-deposit or prepaid electricity plan. However, no-deposit and prepaid electricity plans typically charge much higher rates than the average electricity rate in Texas.
Payless Power, our top pick for prepaid plans, offers rates that start significantly lower than other prepaid energy providers, including Hello Energy and Acacia Energy. Payless’s rates are significantly cheaper than other prepaid providers. However, the company’s rates are still higher than the Texas average of 14.96 cents per kilowatt-hour (kWh), based on September data from the U.S. Energy Information Administration (EIA).
According to EIA data, prepaid plan rates are typically higher than the average rate in the U.S., which is 16.83.
Learn more about prepaid and no-deposit electricity plans to determine if it’s the best option for you.
What Are No-Deposit Energy Plans?
No-deposit energy plans let you start your electricity service without an additional upfront payment. This plan type can help you get your power switched on when you don’t have a strong credit score or the cash for a large upfront payment. The biggest difference between a prepaid plan and other energy plans is how you pay for electricity.
Traditional deposit plans send you a bill at the end of the month based on your electricity rate and the number of kilowatt-hours you used that month. But with a no-deposit or prepaid energy plan, you pay as you go by funding your electricity account. The power company then pulls money from your account balance as you use electricity.
Providers offer these plans to help customers with less-than-perfect credit histories or those who want to avoid the hassle of a large upfront payment. Prepaid energy plans also allow you to monitor your energy usage and adjust your monthly spending.
This plan type also reduces the risk of non-payment, since you pay in advance for your electricity. Note that most no-deposit energy plans don’t provide renewable energy.
What Credit Score Do I Need for No-Deposit Electricity in Texas?
Most electricity companies will require a deposit if your credit score is below a certain threshold, which varies for every provider. Most new customers may end up having to pay a deposit, which isn’t necessarily a sign that you have bad credit. Even Texans with good credit scores may end up owing a deposit.
You may be able to avoid paying a deposit if you have a very strong credit score and a history of on-time payments to your utility company or electricity company. However, the only surefire way to avoid paying a deposit is to enroll in a no-deposit energy plan.
You can bypass the credit check process and skip the deposit by selecting a prepaid lights plan.
Availability of No-Deposit Energy Plans in Texas
No-deposit energy plan options vary by location and energy company. A provider who offers no-deposit plans in Dallas may not offer those same plans in Lubbock. Also, note that there are fewer prepaid energy plan options than traditional postpaid energy plans.
Prepaid energy plans require real-time tracking, regular account funding and active customer notifications. Only some providers have the tools needed to help make these plans feasible.
You can typically filter energy providers and plans by deposit requirements in your area.
No-deposit plans are usually more expensive than traditional energy plans. The higher cost is because providers typically need to offset the risk they incur by not charging a deposit. You can still find affordable electricity plans in your area if you can’t find any no-deposit lights near you.
Major Providers Offering No-Deposit Plans
Payless Power and Reliant Energy are two popular prepaid light companies in Texas offering no-deposit and prepaid energy plans with pay-as-you-go electricity. Acacia Energy and Hello Energy also offer prepaid lights. However, Payless Power is our pick as the best energy company for no-deposit energy plans. Unlike most competitors, Payless Power offers prepaid energy plans with fixed rates for price protection.
Reliant offers low-balance alerts, and you can use the mobile app to monitor and charge your account. Payless Power provides daily balance updates and a monthly statement to keep track of your costs. Both electricity providers require a $75 minimum balance to start your service. The light companies also require you to keep a $5 account balance to avoid power interruption.
| Provider | Plan |
| Payless Power | 6 Month – prepaid |
| Payless Power | 12 Month – prepaid |
| Reliant Energy | Prepaid Power |
How To Qualify For a No-Deposit Energy Plan
Anyone can sign up for prepaid plans to avoid paying a deposit. Customers with a very strong credit score and a history of on-time payments can enroll in a traditional energy plan without having to pay a deposit. Additionally, some Texans can qualify for a deposit waiver.
Common Deposit Waiver Eligibility Criteria
Here are a few factors that may qualify you for a deposit waiver:
- Income level: Low-income households may qualify for a waived deposit.
- Veteran status: Some energy companies offer deposit waivers for veterans.
- Age: You may qualify for a deposit waiver if you’re aged 65 or older.
- Medical needs: You may qualify for a deposit waiver if you have certain medical conditions that require electricity for health reasons.
- Family violence: Victims of domestic violence qualify for a waiver.
- Payment history: You can waive the deposit by providing a letter of credit from your previous electricity company showing 12 consecutive months of on-time payments.
Pros and Cons of Prepaid Energy Plans
Prepaid energy plans allow you to pay for the energy you use without a costly upfront deposit. However, these plans also typically have higher rates per kWh than traditional energy plans. Read on to see other pros and cons of prepaid energy plans before enrolling.
Advantages of Prepaid Plans
Prepaid plans are an accessible electricity option if you want to avoid credit checks and deposits or have a low credit score. These plans offer control over your budget because you can prepay in smaller amounts. Because you pay in advance, you aren’t subject to late fees. Most prepaid providers also deliver regular account alerts to help you manage your energy usage.
- Lower upfront costs
- No credit check
- No ID requirement
- Flexible payments
- No late fees
- Receive usage alerts
Potential Drawbacks
Prepaid plans typically have higher rates than traditional energy plans, meaning you may end up paying more for your electricity in the long run, even if you avoid a deposit. This plan type requires you to actively monitor and fund your account balance. You risk having your electricity disconnected if you forget to add funds, which is inconvenient and may result in reconnection fees. Prepaid plans are less common than other options, so you may have limited plans to choose from.
- Higher price per kWh
- Requires active monitoring
- Risk of power disconnection
- Limited availability
Alternatives To No-Deposit Energy Plans
If no-deposit plans aren’t available in your area or you want to consider other options, here are a few alternatives.
Traditional Deposit Plans
Traditional postpaid plans are a good alternative because they tend to charge cheaper rates than prepaid, no-deposit lights. While they may charge a deposit, the lower rates may help you save money in the long run. You’ll also have a variety of plan types to choose from so you can find the best fit for your needs.
Deposits are typically calculated based on your credit history, track record of on-time payments and the estimated cost of a month’s energy service. Energy companies such as TXU Energy will refund your full deposit after one year of on-time payments.
Budget Billing
Budget billing, also known as level or average monthly billing, is a payment plan that helps manage energy costs by offering a consistent monthly payment. Instead of charging based on actual usage, your electric company calculates an average monthly amount based on your energy consumption from the past year or two. This approach helps smooth out the highs and lows of your energy bills, making budgeting easier, especially during peak usage months when energy is more expensive.
At the end of the budget billing year, your utility company reviews your actual energy usage to determine if your estimated payments cover your consumption. If you overpaid, you might receive a credit, while any underpayment may result in a higher monthly amount for the following year. Not all electricity companies offer budget billing, so it’s worth checking with your provider to see if this option is available for you.
Month-To-Month Plans
Variable-rate, month-to-month plans don’t require a long-term contract and don’t include a deposit. While you can avoid a deposit by choosing this plan type, be careful before enrolling in a variable-rate plan. Not only do these plans tend to charge higher rates per kWh, but the rates can change on a monthly basis. Our research indicates that variable-rate plans can cause serious bill surprise issues. We never recommend this plan type except as a short-term energy solution.
According to our July 2024 survey of more than 1,000 Texans, 63% of respondents who experienced a bill surprise were enrolled in a variable-rate energy plan.
In one of our July 2024 focus groups, a customer said “I chose the variable rate plan because it was initially cheaper, but I wasn’t told how high the rates could go.” Other customers indicated that they felt misled about how often rates would change.
How To Choose the Right Energy Plan For You
Knowing your electricity usage is the key to finding the right plan for your needs. We recommend reviewing your past electric bills for an entire year to see how and when you use electricity.
You should also assess your current energy rate to see how it compares to the rest of the market. Knowing how much energy you use (and how much you’re currently paying per kWh) can help you assess other energy plans to determine which rate is the most competitive.
Use each plan’s electricity facts label (EFL) to compare rates, fees and contract terms. These details can help you calculate long-term costs, such as how rate structures and extra charges might impact your monthly electricity bill. Knowing the potential total costs of your energy plan will allow you to find an energy option that fits your budget and lifestyle, whether it’s a prepaid energy plan or a traditional deposit option.
Frequently Asked Questions About No-Deposit Energy Plans
How can I get electricity with no money down?
Prepaid energy plans are one way to get electricity for no money down. Instead of paying a deposit, you’ll have to put at least $75 in your account to prepay for electricity. Providers will then draw money from your account as you use energy. You’ll need to track your balance, making sure it never drops below $5 to prevent disconnection.
What is the cheapest electricity company in Texas with no deposit?
Payless Power offers relatively cheap no-deposit light plans. At the time of writing, the lowest prepaid rate in Dallas is 17.0 cents per kWh for a six-month plan. Payless also offers 12-month contracts. We recommend Payless’s plans because the fixed rates should ensure predictable energy costs, a rare perk for a no-deposit plan. However, note that Payless Power’s no-deposit options also include early termination fees (ETFs)
Can I get electricity with bad credit in Texas?
Yes, you can get electricity in Texas, even with bad credit. To offset risk, most electric companies will charge you a deposit before turning on your electricity. You can avoid a deposit by enrolling in a prepaid energy plan.
Are no-deposit energy plans more expensive in the long run?
No-deposit plans tend to be more expensive than traditional deposit plans over time because they generally charge much higher rates per kWh. These higher rates can lead to increased total costs, even when accounting for the savings you secure when avoiding an electricity deposit. This is especially true because you can typically get your deposit refunded when you make on-time payments for a whole year in a traditional energy plan.
How We Rate and Review Texas Electricity Companies
With dozens of providers and hundreds of plans available in the deregulated Texas market, choosing the right one can feel overwhelming. Home Energy Club created a comprehensive rating methodology to help Texans cut through the complexity and find the best electricity plan for their needs, whether they’re moving to Texas or looking to switch providers.
We’ve researched dozens of Texas electricity providers and scored them out of 5 stars based on cost, bill predictability, customer satisfaction, brand trust, and plan features. Here’s how those core factors weighed into our ratings:
- Plan features (33%)
- Customer satisfaction and brand trust (27%)
- Plan rates and pricing (20%)
- Energy bill predictability (20%)
