Texas Key Solar Incentives: A Breakdown

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Texas offers a golden opportunity to embrace solar energy, ranking second only to California in solar power production. The Lone Star State contributes over 14% of the nation’s solar energy output. With various incentives like local net metering, rebate programs, residential clean energy credit, and tax exemptions, Texas is an ideal place to make the switch to solar.

Moreover, the cost of solar panels in Texas is lower than the national average, making it a cost-effective choice. With more than 200 days of sunshine annually, you’ll definitely get your money’s worth.

Considering going solar? Check out the latest Texas solar panel incentives below to help you make an informed decision.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this credit on your federal income taxes, you must purchase the system with cash or a solar loan—leasing the system makes you ineligible for the ITC.

Additionally, you must have a sufficiently high tax liability, though any unused credit can be carried over from year to year until the ITC expires at the end of 2034. The only exception is for tax-exempt entities, such as nonprofit organizations, which may be eligible for a direct payment instead of a tax credit.

American Electric Power SMART Source Solar PV Program

The SMART Source Solar PV Program assists AEP Texas customers in meeting their energy needs with solar power. This program provides financial incentives to reduce the upfront costs of installing solar electric systems. By installing solar panels at your home or business, you can generate your own electricity and contribute to environmental sustainability.

Austin Energy Solar Photovoltaic Rebates & Incentives

Customers of Austin Energy can receive a $2,500 rebate for installing a solar panel system. To qualify, they must also complete a solar education course.

Oncor Residential Solar Program

Oncor offers incentives to participating service providers who install photovoltaic (solar) systems with energy storage backup in homes within Oncor’s service area. These incentives reduce the initial investment, allowing customers to achieve a quicker return on their solar investment. Typically, Oncor’s incentive programs are available from January through November each year.

Residential incentives for solar photovoltaic systems vary based on factors like system size and azimuth angle. To qualify, homeowners must install a solar photovoltaic system with an energy storage backup. Your chosen service provider can help calculate the specific incentives available for your system. Additionally, your retail electric provider can inform you about any potential credit for excess energy generated by your system.

SMTX Solar PV Rebate

The SMTX Utilities Distributed Generation (DG) Rebate Program promotes the installation of grid-connected renewable energy systems, such as solar photovoltaic (PV) and wind systems.

Texas Property Tax Exemption for Solar Panels

While Texas doesn’t impose state income taxes, its property taxes, determined by local taxing authorities rather than the state, rank among the nation’s highest. Concerns may arise regarding the impact of installing solar panels in the Lone Star State on property tax bills, given that property taxes hinge on property value.

City of Sunset Valley – PV Rebate Program

Sunset Valley provides rebates to homeowners who install photovoltaic (PV) systems, supplementing the rebates offered by Austin Energy to its electric customers. The local rebate amounts to $1.00 per watt (W) up to 3,000 W. To qualify for the Sunset Valley rebate, the system must meet the requirements for an Austin Energy rebate and have an installation cost of $6 per kW or less.

These rebates are additional to Austin Energy’s rebate of $0.50 per watt AC. To join the program, residents must first qualify for a rebate through Austin Energy and adhere to the equipment, warranty, and installation criteria. Note that residents of utilities other than Austin Energy are not eligible for the Sunset Valley program.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• The Texas Solar for All (SFA) Coalition represents a collaboration of Texas municipalities dedicated to serving the low-income and disadvantaged communities across Texas, totaling over 11 million people. The coalition’s primary objective is to revolutionize access to distributed solar energy in Texas, fostering new community wealth and savings through reductions in energy costs, equitable opportunities, and the creation of well-paying jobs in the clean energy sector. Leveraging federal funds, tax credits, and various other resources, the Texas SFA program aims to offer financial assistance and facilitate access to private capital to support the deployment of residential solar, battery storage, and energy efficiency measures in both multifamily and single-family dwellings, thereby enhancing community well-being and resilience against power system failures. Moreover, the program will provide support for workforce training tailored to serve low-income and disadvantaged residents, bolster minority- and women-owned businesses, and collaborate closely with community-based organizations. The Coalition’s SFA initiatives are designed not only to be expanded within the member jurisdictions but also to be scaled up to other regions of Texas both during and beyond the SFA grant period.
• The Clean Energy Fund of Texas (TxCEF), in collaboration with the Bullard Center for Environmental and Climate Justice at Texas Southern University (BCECJ), collectively known as CEFBC, is dedicated to deploying technical assistance, private capital, and grants to minority-serving institutions. Together, these organizations aim to facilitate the establishment of residential-serving community solar projects in low-income and disadvantaged communities that face significant challenges related to energy policy and grid vulnerability. These projects are anticipated to result in emissions reductions, savings on household utility bills, generation of shared revenues through community ownership, and the mobilization of private capital. By deploying solar and energy storage, these projects will not only deliver grid and community benefits but also power community resilience centers. These outcomes will extend the advantages of greenhouse gas and air pollution reduction initiatives to communities across the United States. 
• Teaming up with lead applicant GRID Alternatives, a coalition of ten mission-driven nonprofit solar and affordable housing providers and allies has collaborated to develop the Solar Access for Nationwide Affordable Housing Program (SANAH). SANAH is meticulously crafted to maximize benefits for households and communities while advancing equity, reducing harmful pollution, and combating climate change. The program offers a multitude of advantages, including expanded access to solar and storage for income-qualified households, significant energy savings and relief from burdensome costs, as well as additional benefits like efficiency improvements and electrification. 

CenterPoint Energy – Residential and Hard-to-Reach Energy Efficiency Program

CenterPoint Energy’s Residential and Hard-to-Reach Energy Efficiency Program offers rebate incentives exclusively to electric customers within CenterPoint Energy’s service area in the greater Houston, Texas area.

The program, known as the Residential and Hard-to-Reach Standard Offer Program (RSOP & HTR), aims to encourage contractors, service providers, community agencies, and other organizations to implement energy efficiency upgrades in homes and small businesses across CenterPoint Energy’s designated service region. Specifically, the HTR component focuses on households that fall within or below 200% of the Federal Poverty Guidelines.

Contractors qualify as Project Sponsors under the program when they install energy efficiency measures at facilities with a maximum demand not exceeding 100 kW. Projects can be aggregated across multiple facilities, provided their combined maximum demand does not exceed 250 kW. Payments to Project Sponsors are determined based on the amount of kW and kWh savings achieved through these energy efficiency improvements.

Garland Power & Light – EnergySaver Solar Rebate Program

GP&L’s Solar Generation Installation Program allows customers with solar photovoltaic (PV) systems to participate as distributed energy producers on GP&L’s electric grid, provided they meet specific safety requirements designed to protect both the system and GP&L linemen.

How the Bi-Directional Meter Works

The bi-directional meter records:

• Electricity Sent to GP&L: Records the kilowatt-hours (kWh) of excess electricity produced by the PV system and sent back to GP&L.
• Electricity Received from GP&L: Records the kWh of electricity supplied from GP&L when the customer’s solar production is insufficient.

These readings appear on the customer’s monthly bill as cumulative totals (they don’t reset monthly) and are used to determine net energy usage. If customers produce excess energy, GP&L buys it back at a rate of $0.0819 per kWh.

This program empowers customers to utilize solar power while offering a clear, trackable method for managing excess energy production.

CPS Energy (Electric) – Residential Energy Efficiency Rebate Program

CPS Energy’s Residential Energy Efficiency Rebate Program provides rebates for a range of energy efficiency improvements in homes, such as appliances, HVAC equipment, and insulation. The calculation methods, limits, and equipment requirements differ based on the technology and existing home conditions. To qualify for rebate payments, all equipment and installation criteria must be satisfied.

Additionally, CPS Energy extends energy efficiency rebates to commercial and industrial facilities. They also offer incentives for installing solar photovoltaic (PV) and solar thermal systems.

City of San Marcos – Distributed Generation Rebate Program

The City of San Marcos provides a Distributed Generation Rebate Program designed for grid-tied renewable energy systems installations. This program is exclusively available to customers of San Marcos Texas Utility. To qualify for the rebate, customers must obtain pre-approval from the utility. Single-family homes must meet specified energy efficiency criteria established by the utility, and all systems must be professionally designed and installed.

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.