Solar Incentives in Texas

Texas is one of nine states with no personal income tax, which means there is no mechanism for a state solar tax credit. Unlike states such as New York or Arizona, Texas homeowners cannot reduce their state tax liability through solar installation. However, Texas offers meaningful property tax and sales tax exemptions, and several utilities provide rebates. The absence of a state credit is partly offset by the state's high solar irradiance and competitive installer market.

Texas Tax Code Section 11.27 provides a full exemption for the added value of solar and wind-powered energy devices. For a system that adds $20,000 to home value at a 2.5% property tax rate, this saves $500/year. The exemption must be claimed annually with the county appraisal district using Form 50-128. Battery storage systems that work in conjunction with solar may also qualify. This is a permanent benefit with no expiration currently scheduled.

Austin Energy's rebate is available to residential customers within the Austin Energy service territory. The installer must be on Austin Energy's approved vendor list. The system must also pass a city inspection. Austin Energy also offers Value of Solar (VOS) rate for net metering, currently at approximately $0.097/kWh for exported power. Budget availability varies by year — confirm current availability before installation.

CPS Energy (San Antonio) provides solar rebates contingent on annual program budget. The rebate is paid after installation, inspection, and interconnection approval. CPS also offers net metering at avoided-cost rates. Availability is not guaranteed year to year — customers should verify the program is funded before committing to installation. The rebate applies only to new installations within the CPS service territory.