Incentives
Texas Solar Incentives
Texas has no state solar tax credit, but homeowners can stack the 30% federal credit, a 100% property tax exemption, and local utility rebates. Here is the full list.
Texas takes an unusual approach to solar policy. There is no statewide rebate and no state income tax credit, because there is no state income tax. What Texas does offer is a full property tax exemption on the added home value, a growing set of municipal utility rebates, and access to the 30% federal residential clean energy credit.
The 30% federal residential clean energy credit
This is the largest incentive available to Texas homeowners. It returns 30% of the total installed cost, including panels, inverters, racking, labor, permitting, and qualifying battery storage, as a credit against your federal income tax.
It is nonrefundable, meaning it offsets tax you owe rather than generating a refund on its own, but any unused portion carries forward to future tax years. You claim it on IRS Form 5695. You must own the system, so leases and power purchase agreements do not qualify for the homeowner.
Texas property tax exemption
Texas law exempts the added appraised value of a residential solar installation from property taxes. A system that raises your home's market value by $18,000 does not raise your tax bill.
The exemption is not automatic. File Form 50-123 with your county appraisal district, usually in the year after installation.
Local and utility rebates
Municipal and cooperative utilities run the meaningful rebate programs in Texas. Budgets are annual and often exhaust mid-year, so apply early.
- Austin Energy: residential rebate plus a Value of Solar bill credit
- CPS Energy in San Antonio: per-watt rebate with local-installer adders
- Denton Municipal Electric and Garland Power & Light: buyback and rebate programs
- Various electric cooperatives: rebates and low-interest loan programs
Solar buyback instead of net metering
Texas does not require utilities to offer one-for-one net metering. In deregulated areas, credit for exported energy comes from your retail electric provider's solar buyback plan, and those plans vary enormously in rate, caps, and contract length.
This is the single most overlooked variable in Texas solar economics. A plan that credits 3 cents per exported kWh instead of 12 cents can add years to your payback.