Texas Solar Incentives (2023)
Texas Solar Incentives, Tax Credits, & Rebates
Looking for Texas solar incentives to make going solar even sweeter? You’ve come to the right place and conveniently, you’re in the right state! Texas solar has been booming for a while now. It currently ranks #2 nationally with enough solar installed to power nearly 2 million homes (1).
As you might know, Texas is one of the largest energy producers and consumers in the U.S., making it the perfect state for harnessing power from the sun. According to a report from the U.S. Department of Energy, Texas accounts for 10% of the nation’s consumption all on its own (2). And the Lone Star State paid a hefty price for it.
In 2021, the Texas power grid was pushed to the brink during a powerful winter storm, now known as “The Great Texas Freeze.” Millions of Texans were left in the dark, as the Texas power grid was unable to meet the demand for electricity (3,4). As a result, many residents are looking for renewable energy options to protect themselves against future blackouts. A solar energy system with solar backup battery is a great option for those people.
Fortunately, going solar not only helps reduce your carbon footprint, but also provides significant financial benefits (thanks to a variety of incentives and rebates). In this article, we’ll explore the many Texas solar incentives available, including net metering, rebates, the federal solar tax credit, and more.
Federal Solar Tax Credit
Homeowners in Texas who are interested in installing solar panels can take advantage of the federal solar tax credit, now known as the Residential Clean Energy Credit. This nonrefundable tax credit provides a credit of up to 30% of the total cost of an eligible solar energy system, including the cost of solar panels, installation, a solar battery and more.* If you have a small tax liability, it’s possible to have the credit rolled over into the next few years until 2032.
The amount of the credit depends on the date the solar system was installed. Here is the current timeline for the residential solar tax credit amounts:
- 30% tax credit for solar systems installed between Jan 1, 2022 and Dec 31, 2032.
- 26% tax credit for solar systems installed between Jan 1, 2033 and Dec 31, 2033.
- 22% tax credit for solar systems installed between Jan 1, 2034 and Dec 31, 2034.
Currently, the residential tax credit is set to expire for systems installed after December 31, 2034.
Note: The credit can only be used to offset federal income taxes. It’s subject to certain requirements and limitations, so it’s always best to consult with a tax professional to determine your eligibility and how much of a credit you may be able to claim.
Net metering in Texas
Net metering allows homeowners with solar panels to send excess energy back to the grid. Homeowners can then receive a credit on their bill in exchange for the excess energy that they produce.
While Texas does not have a statewide mandate for net metering or solar buyback programs, some local utilities offer these programs. Since Texas has a competitive energy landscape, local utility companies are in constant competition. This means that as a homeowner, you have a decent amount of options for net metering programs to take advantage of.
Similarly, a solar buyback program also offers credits for excess energy. The difference is typically in the amount of the credit. Net metering generally offers a full credit for every kilowatt-hour (kWh) of excess energy that a solar panel system produces.** Alternatively, solar buyback programs vary in the price per kWh amount. Some programs even offer upfront payments or money-back payments instead of credits.
Contact one of our solar energy specialists to find the best net metering program available in your area.
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Property tax exemption for solar panels in Texas
Have you heard that solar panels can increase home value? According to the Appraisal Journal, “Home value increases $20 for every $1 reduction in annual utility bills” (5). Solar panel installations are considered to be an improvement to your property.
Normally, this would result in an increase in your property tax bill. Fortunately for Texas homeowners, they can take advantage of a property tax exemption. Per the Texas property tax code, the added value of a solar energy system isn’t included in the overall property value assessment (6).
The exact amount of the exemption may vary depending on local tax laws and jurisdiction. Still, by reducing or eliminating the increase in property taxes, this exemption can make solar energy more affordable and accessible for homeowners in Texas.
To take advantage of the property tax exemption for solar panels in Texas, consult one of our Solar Energy Specialists to determine the specific requirements in your area.
Local solar panel rebates in Texas
Although Texas lacks a statewide solar rebate program, select local utilities and municipalities offer rebates to homeowners who install solar panels. Rebates vary by provider and are subject to annual changes. To find out if you’re eligible for a solar rebate and learn about the requirements of local programs, contact your utility company or speak to one of our solar energy specialists today.
Requirements could include, but are not limited to:
- Type of solar panel system
- Size of the system
- Installation process
If your energy provider offers a solar rebate program, be sure to review their guidelines carefully. If you’re unsure which incentives your home solar installation qualifies for, contact our Solar Energy Specialists for a free estimate and answers to your questions about Texas solar incentives during a no-obligation consultation.
Texas solar rights
While Texas solar rights aren’t a financial incentive, they’re a nice perk for homeowners installing solar. Under Texas Property Code, homeowner associations (HOAs) are prohibited from adopting rules that restrict homeowners from installing solar panels on their property (7). This means that homeowners in Texas have the right to install solar energy systems on their home, as long as they comply with the HOA’s guidelines.
While that is great news, it’s important to note that some HOAs may have regulations in place that could affect the installation process. Here’s a glance at why an HOA could deny a solar panel installation (8):
- It’s done illegally or violates public health and safety.
- It’s on common property that is owned or maintained by the association.
- It extends above the roofline, isn’t parallel to the roofline or doesn’t conform to the slope of the roof.
- It’s ground-mounted and installed taller than the fence.
- The installation violates its warranties.
- If any frames, wiring or piping aren’t silver, bronze or black.
- It’s installed without the HOA’s approval.
Our ADT Solar Energy Specialists are here to guide you through any local and state building codes and HOA guidelines to ensure a successful solar installation. With our expertise, you can enjoy the benefits of solar energy worry-free.
Schedule your solar installation with ADT Solar
As you can see, there are many solar incentives that can help you get access to clean, renewable energy at home. From the federal tax credit to the property tax exemption, you can save money and reduce your carbon footprint.
ADT Solar is committed to helping homeowners across Texas access the benefits of solar energy. If you’re interested in going solar, schedule a free consultation with ADT Solar today. Our team of solar experts can help you navigate the various incentives and programs available in Texas, ensuring that you get the maximum benefit from your solar installation.
Ready to schedule your solar installation with us? Contact us today to schedule a free, no-obligation solar consultation.
Common questions about solar incentives in Texas
Texas does not currently offer a state tax credit for solar energy installations. However, homeowners in Texas can still take advantage of the Residential Clean Energy Credit, which provides a credit of up to 30% of the cost of the solar installation. Additionally, some utility companies in Texas offer their own solar incentives and programs.
Texas does not offer a statewide solar rebate program. However, some local utilities and electric cooperatives may offer their own solar incentive programs, so it is worth checking with your local provider for any available options. Additionally, federal tax credits for solar installations are still available, which can offset the cost of a solar energy system.