The complete list of Texas solar incentives and tax credits for 2023, plus how to take advantage.
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The Lone Star State is a solid bet for home solar. Sure, Texas may seem synonymous with oil, but solar is a growing concern in the state, thanks in large part to some excellent state solar incentives. Many homeowners are also turning to solar in Texas as a result of the blackouts and brownouts experienced in 2021, along with the devastatingly high energy bills some utilities sent out to customers.
It’s worth noting, though, that the electricity market is deregulated in the majority of Texas, including the cities of Houston, Dallas, Fort Worth, and Arlington. Bigger cities with municipal utilities include Austin and San Antonia, and El Paso, which has a regulated investor-owned utility. Because of the deregulated market across much of the state, there are myriad solar and renewable policies and incentives in Texas.
As such, we’ve broken down many of the solar incentives in the state at the county and city level.
Texas Solar Incentives
|State property tax exemption||Texas provides a full exemption from additional property taxes related to increases in a home’s value due to installed solar|
|Net metering||Texas mandates net metering but the terms and conditions are left for utilities to decide. Some cities and counties also offer net metering programs|
|Utility rebates for solar in Texas||Rebates up to $3,000 are available from some utilities for homeowners who install solar|
|Local solar incentives in Texas||Many cities offer significant solar rebates and other incentives for residents to install solar. Austin is an especially pro-solar city, offering a $2,500 rebate for homeowners who complete its solar education course and install a qualifying solar photovoltaic (PV) system|
Local solar incentives in Texas
There are 254 counties in Texas and more than 1,200 incorporated cities, so we know the list below is far from exhaustive. For homeowners in Texas who want to go solar, your best bet is to check with your local government, utilities, and solar or renewable advocacy organizations for up-to-date information on solar programs.
This industry is very fluid, with new policies and programs popping up, expiring, and changing all the time. If you do find a program we haven’t listed, let us know!
Austin solar incentives
See our dedicated Austin Solar Incentives page.
Austin Energy offers residential solar customers a $2,500 rebate for completing its solar education course and installing a qualifying solar photovoltaic (PV) system on your home. The caveat is that you agree to transfer all SRECs in perpetuity to Austin Energy.
Customers who qualify for an Austin Energy solar rebate and live in Sunset Valley can also apply for an additional rebate from the city of $1.00/W up to a maximum of $3,000.
Austin Energy offers rebates for property owners installing solar PV on five or more homes. The Capacity-Based Incentives (CBI) for multifamily properties amount to 60 cents per watt for properties serving two or more units and $1.00 per watt for non-profit properties that are not eligible for the federal tax credit. The multifamily program incentives are capped at $2,500 per residential unit.
Find a Solar Energy partner near you.
Other county and city incentives
The City of Plano, in partnership with BTH Bank, offers low-cost financing for solar PV and solar water heaters as well as other residential energy improvements. The Smart Loan program terms vary and are set by the BTH Bank, with loan amounts ranging from $2,500 to $25,000.
The City of San Marcos offers rebates for residential and commercial solar installations. The residential rebate is $1.00/W up to $2,500 for single-family residential customers. The rebate is $1.00/W up to $5,000 for commercial customers. The total rebate may not exceed 50% of installed cost.
Local net metering programs
Brownsville PUB offers a buy-back program for residential solar systems approved by the City of Brownsville Building Permit Division. Any surplus electricity is credited at the Fuel & Purchase Energy Charge (FPEC), which is the same price paid to other energy providers in Brownsville.
The City of Brenham Electric Department offers a net metering program with credits at the avoided cost rate.
The City of Denton offers a net metering program to incentivize solar installations. The city will buy back any excess energy your solar system produces, as a one-to-one trade until you have entirely offset your consumption for the month. The buy-back rate is currently $0.0381/kWh. Any unused credits are applied first to your monthly connection fee, and then to City of Denton utility bills for water, solid waste, etc. Any unused credit is then rolled over to the next month’s bills.
Utility rebates for solar in Texas
Several solar rebates are available in Texas, courtesy of utility companies. These are for both solar water and solar PV systems.
American Electric Power Texas North Company (AEP-TNC) and AEP-Texas Central Company offer rebates for solar (PV) systems. The residential rebates for 2022 are $0.50/Wdc for systems sized 0.001-2.999 kWdc, then $1,500 for systems sized 3-4.999 kWdc; $2,250 for systems 5-7.499 kWdc; and $3,000 for 7.5-30 kWdc systems.
CPS offers a solar water heater rebate amounting to the listed calculated savings for the system multiplied by $0.60, up to a maximum of $2,000.
CPS also offers rebates for solar PV installations, up to a maximum of $2,500 per residential project, plus a $500 premium for projects using local modules.
State property tax exemption in Texas
Texas has a robust state property tax exemption for solar. The law lays out a full exemption for value added to a property by a solar or wind-powered energy device installed primarily for the production and distribution of energy for on-site use.
Net metering in Texas
Net metering is allowed in Texas, but no standards are laid out by the state. Because the state is so large, a variety of investor-owned utilities and public city utilities provide electricity, meaning your best bet is to contact your utility directly to find out about net metering options before you install solar.
The main utilities all offer some form of net metering or compensation for excess energy exported to the grid from residential solar: Champion Energy, Green Mountain Energy, Infuse, Shell Energy, Octopus, Pulse Power, Reliant, and TXU all offer programs.
Rhythm Energy offers a one-to-one kWh rate Rooftop Solar Buyback Plan. This is a 12-month contract with a fixed energy rate.
Customers in the Oncor and CenterPoint service areas can sign up to net metering through Shell Energy, formally MP2. Shell Energy credits surplus generation at the retail price and uses it to offset future bills. Unused credits are cleared in December, however, with no payment at that time. Shell Energy offers two types of solar buyback plan, a 12-month and two-year contract, as well as EV charging specific plans. Terms and rates vary depending on where you live in Texas.
Green Mountain Energy offers a similar net metering program to Shell Energy, serving customers in Oncor, CenterPoint, AEP and TNMP service areas. Its Renewable Rewards buyback program offers retail rate but no annual payout or indefinite rollover of credits.
TXU Energy has a Renewable Buyback program with a reduced feed-in tariff that changes based on service area. Contracts can last two years or be month-to-month; the buy-back rate is higher for the two-year contract. This program serves customers of Oncor, CenterPoint, AEP and TNMP and the utility will cover cancellation fees if you switch from another utility (with some limits).
Reliant provides a Solar Payback plan for customers in Oncor and CenterPoint service areas. This plan credits surplus energy at full retail price but only to offset monthly consumption.
El Paso Electric (EPE) offers net metering for systems up to 50 kW and credits surplus energy at avoided cost rates. Customers can reduce their power bill to a monthly minimum of $30 (to cover costs of distribution, etc.) and the utility pays out any unused excess annually (with some limits).
Lubbock Power & light (LP&L) has a net metering program but is in the process of connecting fully to the ERCOT grid, which may change the utility’s policy. Currently, LP&L doesn’t offer credits or payments for any surplus energy produced by residential customers but does charge residential solar customers a lower rate than standard customers for electricity consumed beyond the customer’s own energy production.
Xcel Energy offers three options for residential solar customers in Texas: an offset program where customers consume the electricity they produce and pay standard rates for any they buy from the grid; a net billing option where any excess generation earns a bill credit as kWh multiplied by the utility’s “fuel cost factor” which varies monthly (this option comes with a $20 monthly fee); and an independent option where you have two meters, one measuring your energy production and one the energy you draw from the grid, with all PV energy pushed to the grid and compensated using the “fuel cost factor” calculation, resulting in a lower rate of return (plus a $20 monthly service fee).
Entergy Texas offers a form of net metering but only credits customers at avoided cost. If a customer reaches a balance of $50 or higher, the company will send a check. Otherwise, credits roll over month to month.
See Local solar incentives above if you live in Brenham, Brownsville, or Denton.
Final thoughts on state solar incentives in Texas
Texas gets more sun than average in the U.S., meaning an 8-9 kW array can meet most households’ energy needs. With the federal tax credit and a variety of local rebates available, plus net metering and a state property tax exemption, Texas is a great place to go solar!
The trick in Texas is to do your research before you sign a contract with an installer. Depending on where you live, you may want to design your home solar installation in different ways to take advantage of local incentives. For instance, some rebates may be available for solar only, while others include a rebate for storage. Homeowners may also be able to access different rebate levels by slightly adjusting the size of their array, such as to 7.5 kW from 7.4 kW, or for using panels made locally.