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Solar incentives can help you save money on a home solar project in Texas. To learn more, check out our guide to Texas solar plans.
Leonardo David is an electrical engineer, MBA, energy consultant and technical writer. His energy efficiency and solar energy consulting experience spans banking, textiles, plastics processing, pharmaceuticals, education, food processing, real estate and retail. Since 2015, he has also written on energy and technology topics.
Tori Addison is an editor who has been working in the digital marketing industry for over five years. Her experience includes communications and marketing work in the non-profit, government and academic sectors. She is a journalist who began her career covering politics and news in New York’s Hudson Valley. Her work includes local and state budgets, federal financial regulations, and health care legislation.
Texas has become one of the leading states in solar energy, with 17,247 megawatts of installed capacity and enough solar photovoltaic (PV) capacity to meet the energy needs of 1.9 million homes. Texas also offers solar incentive programs with local utilities to help offset the costs of solar energy and promote clean energy production in the state.
In this article, our Guide Home team looks at the solar tax credits, credits, and rebates available in Texas. Read on to learn how these programs can lower your overall solar system costs, making the transition to solar energy more affordable in the Lone Star State.
Texas does not have a statewide solar rebate program for homeowners, but it does offer a property tax exemption for residential and commercial renewable energy systems.
If you install a solar system in Texas, you won’t have to pay taxes on the corresponding increase in your home’s property value. For example, if a homeowner in San Antonio owns a home worth $350,000 and installs a solar panel system that costs $25,000, the city will calculate his property taxes as $350,000 rather than $375,000.
Depending on your specific location in Texas, your local government or your utility company may offer solar incentives. Here are some of the largest solar incentive programs available in the Lone Star State:
Applicable to home solar systems with an installed capacity of at least 3 kW and requires completion of a solar energy course.
The table above shows the largest solar incentive programs in Texas. However, the state has a large number of municipal utilities and electric cooperatives that operate in certain areas. If you’re thinking about installing solar on your roof and getting your electricity from a small power company, check online to make sure you’re not missing out on any financial incentives.
Solar incentive programs in Texas are administered by different energy companies and have different eligibility requirements. Typically, these incentives are only available through approved contractors.
Net metering is a solar buy-back scheme that credits you with any excess energy produced by your solar panels and sends it back to the grid. You can then use these points to pay your future energy bills. Texas does not have a statewide net metering policy, but there are many retail electricity providers with solar buyback programs. Some municipal energy companies, such as Austin Energy, also offer this offering.
Because net metering programs in Texas are administered by different electric utilities, technical requirements and compensation standards vary.
The Federal Solar Investment Tax Credit (ITC) is a national incentive created by the federal government in 2006. After installing home solar panels, you may qualify for a federal tax credit equal to 30% of the cost of the system. For example, if you spend $33,000 on a 10-kilowatt (kW) system, your tax credit will be $9,900.
It is important to note that ITC is a tax credit and not a refund or rebate. You can claim the credit by applying it to your federal income tax liability in the year you install your solar system. If you don’t use the full amount, you can roll over your remaining points for up to five years.
You can also combine this benefit with state tax credits and other local programs to lower the upfront cost of a home solar system. You can also apply for a loan for other energy efficiency improvements, such as purchasing an electric car.
As you can see in the World Bank’s Global Solar Atlas, Texas is one of the sunniest states and ranks second in the country for solar energy production. According to the U.S. Energy Information Administration, a typical 6-kW home solar system can produce more than 9,500 kWh of energy per year under favorable site conditions, and residential customers in Texas pay an average electric bill of 14.26 cents per kWh. Based on these numbers, 9,500 kWh of solar power in Texas could save you over $1,350 a year on your energy bills.
According to a 2022 study by the National Renewable Energy Laboratory (NREL), the market price of residential solar systems in the United States is $2.95 per watt, meaning a typical 6kW solar panel installation costs about $17,700. Here’s how solar incentives can help reduce system costs in Texas:
With a net cost of $10,290 and annual savings of $1,350, the payback period for a home solar system is seven to eight years. Additionally, high-quality solar panels come with a 30-year warranty, meaning the payback period is only a fraction of their lifespan.
Incentive opportunities and abundant sunshine make solar energy attractive in Texas, but choosing from the many solar installers available can feel overwhelming. To make the process easier, we’ve compiled a list of the best solar energy companies in Texas based on cost, financing options, services offered, reputation, warranty, customer service, industry experience, and sustainability. Before making your final selection, we recommend obtaining proposals from at least three of the suppliers mentioned in the list below.
Texas has a lot of sunshine, which increases the performance of solar panels. Additionally, many electric companies operating in the Lone Star State have solar incentive programs that you can combine with federal tax credits to save money on your solar project. Texas does not have a statewide net metering policy, but many local electric providers offer this benefit. These factors make switching to solar energy beneficial for Texas homeowners.
Each incentive program has its own terms and conditions and eligibility requirements. However, the best solar energy companies are familiar with the application process for each program and can verify that your solar installation qualifies.
Texas does not have a solar rebate program. However, utility companies operating in the state offer several incentive programs, some of which include solar rebates. To qualify for certain benefits, your home must be in the service area of ​​the electric company that administers the program.
Texans are exempt from property taxes when using renewable energy equipment. Therefore, any increase in the value of your home is exempt from property taxes if you install solar panels. As a US resident, you are also eligible for federal solar tax credits. Additionally, local solar rebates and incentive programs are available from electric utilities such as CPS Energy, TXU, Oncor, CenterPoint, AEP Texas, Austin Energy and Green Mountain Energy.
Texas does not have a statewide net metering policy, but some electric providers offer solar buyback programs. Energy bill credit recovery rates vary by plan. You can contact your participating electricity supplier for more information.
As a Texas resident, you may qualify for a 30% solar energy investment tax credit, a federal incentive available in all states. Texas doesn’t offer local tax incentives for solar systems, but for one thing, there’s no state income tax.
Get the inside scoop on the best providers and options available for essential home services.
We carefully evaluate solar installation companies, focusing on the factors that matter most to homeowners like you. Our approach to solar energy generation is based on extensive homeowner surveys, discussions with industry experts and renewable energy market research. Our review process involves rating each company based on the following criteria, which we then use to calculate a 5-star rating.
Leonardo David is an electrical engineer, MBA, energy consultant and technical writer. His energy efficiency and solar energy consulting experience spans banking, textiles, plastics processing, pharmaceuticals, education, food processing, real estate and retail. Since 2015, he has also written on energy and technology topics.
Tori Addison is an editor who has been working in the digital marketing industry for over five years. Her experience includes communications and marketing work in the non-profit, government and academic sectors. She is a journalist who began her career covering politics and news in New York’s Hudson Valley. Her work includes local and state budgets, federal financial regulations, and health care legislation.
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