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Texas — Solar Incentives, Tax Credits, and Rebates

Texas is one of the best states for going solar due to its large amount of sunshine, low solar costs, and property tax exemptions for homeowners.

You can use the federal solar tax credit and other incentives to save thousands of dollars when you go solar in Texas.

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Texas Solar Incentives and Tax Credits

Federal Solar Tax Credit

The Investment Tax Credit (ITC), also called the federal solar tax credit, helps you reduce the cost of your solar energy system. You can deduct 26% of the cost of your solar energy system from your federal taxes. There is no cap on the value of your tax credit and it applies to both residential and commercial systems.

The federal solar tax credit is 26% for systems installed in 2022, but the tax credit will drop to 22% in 2023. If you’re debating on when to go solar, it is recommended that you go solar in 2022 in order to make the most of the federal solar tax credit.

The federal solar tax credit helps Texas homeowners save thousands of dollars in upfront cost, in addition to the state of Texas many solar incentives and rebates.

Net Metering in Texas

Net Metering is when your utility company monitors how much energy your home’s solar system produces and how much energy you consume. If your home’s solar system generates a surplus of energy, you will receive a credit from your utility company for that surplus energy.

There is no statewide net metering law in Texas, but many major utility companies will pay full retail price for your credits.

If you live in major metropolitan areas like Houston or Dallas, you can find municipal utility companies or Retail Electric Providers (REP) like Green Mountain who will give you full retail credits for your surplus energy.

Texas Solar Rights Law

Texas has a solar rights law which blocks Homeowners Associations (HOAs) from banning solar energy systems. HOAs in Texas can prohibit solar installations in extreme circumstances, but you as a homeowner will most likely not have issues with your HOA for when you decide to go solar.

Texas Property Tax Exemptions for Solar Homeowners

Installing solar panels to your home will increase your home’s value by several thousand dollars. In Texas, installing solar panels will increase the value of your home by about 70% of the cost of your solar panel system. This is due to the substantial energy savings you will receive over the life of your solar power system.

The Texas legislature has created a property tax exemption to encourage homeowners to go solar. The increase in your home’s value due to installing solar panels is fully exempt from 100% of the resulting property tax increase.

Texas Solar Rebates

Texas does not have a statewide solar rebate program, but many utility companies and local governments offer rebates and incentives for homeowners who go solar.

Solar rebates programs will vary, but they can lower the cost of purchasing a solar PV system in the state of Texas by 10-20%.

DSIRE Incentives Database - Texas

The Database of State Incentives for Renewables and Efficiency (DSIRE) is a comprehensive database that Texas residents can use to search for and find solar energy incentives in Texas and across the entire country.