Texas Solar Incentives Overview
Texas is one of the best states for solar in the country, thanks to its abundant sunshine, high electricity rates, and business-friendly environment. Unlike most states, Texas operates on its own grid (ERCOT), which means no mandated net metering—but competitive solar buyback programs from retail electric providers.
Current Incentive Summary
| Incentive | Value | Availability |
|---|---|---|
| Federal ITC (PPA/Lease only in 2026) | 30% via 48E (company claims it) | Through Dec 2027 (PPA/Lease only) |
| Property Tax Exemption | 100% exemption | All Texas homeowners |
| Solar Buyback | Varies by provider | Shop providers |
Federal Tax Credit Update: What Changed in 2026
Important 2026 Update: The 30% residential ITC (25D) for homeowner-purchased solar systems (cash or loan) expired on December 31, 2025. There is no longer a federal tax credit for purchased systems.
- PPA/Lease: Solar company claims a 30% commercial credit (48E) through Dec 2027, typically passes savings to you as lower rates
- Purchased systems (cash/loan): No federal credit available in 2026
- Stackable: Combines with Texas property tax exemption
- Requirements: System must be at your primary residence
Example savings:
Every home is different. Chat with our AI to get numbers specific to your address, usage, and utility.
Texas Property Tax Exemption
Texas provides a 100% property tax exemption for residential renewable energy systems. This means installing solar will NOT increase your property taxes, which is a significant benefit given Texas property tax rates are among the highest in the nation.
- Exemption: 100% of added value is exempt
- Automatic: Applied when you install solar (no application needed)
- Savings: Can save $1,000-$3,000/year in property taxes
Solar Buyback & Net Metering
Unlike other states, Texas does not have mandated net metering. Instead, solar buyback rates are set by retail electric providers (REPs). Rates vary significantly between providers, making it essential to compare plans before going solar.
Understanding Texas Solar Buyback
| Plan Type | Buyback Rate | Best For |
|---|---|---|
| Full Retail | $0.12-0.18/kWh | Maximum savings |
| Wholesale/Partial | $0.03-0.08/kWh | Lower rates |
| Time-of-Use | Varies by hour | Flexible usage |
Utility Programs
Major Texas utilities and retail electric providers offer various solar programs:
Chariot Energy
- Chariot Shine: Real-time market rates for excess
- Chariot GreenVolt: Fixed buyback rate
- Credits roll over month-to-month
TXU Energy
- Solar Buyback plans available
- Free nights plans (pair with battery)
Reliant Energy
- Renewable energy plans with buyback
- Variable rate options
City-Specific Programs
Several Texas cities offer additional incentives:
- Austin: Austin Energy rebates, net metering
- San Antonio: CPS Energy solar programs
- El Paso: El Paso Electric solar buyback
- Dallas: Oncor service area (shop providers)
- Houston: CenterPoint Energy territory (shop providers)
Calculate Your Total Savings
Here's how to estimate your total incentives when going solar in Texas:
Example: 10kW System ($22,000)
| System Cost | $22,000 |
| Federal ITC (PPA/Lease only in 2026) | -$6,600 |
| Property Tax Savings (est. 10 yrs) | -$3,000 |
| Net Cost After Incentives | $12,400 |
What's the best way to maximize Texas solar savings?
Follow these steps:
- Compare electricity providers for the best buyback rate
- Explore PPA/Lease options to benefit from the 30% commercial credit (48E) on your taxes
- Install a battery to maximize self-consumption
- Consider pairing with an EV for additional savings
- Get quotes from multiple installers
How to Claim Your Incentives
- Federal ITC: Claim on IRS Form 5695 when filing taxes
- Property Tax: Automatic—no application needed
- Solar Buyback: Sign up with your chosen REP
- City Programs: Apply through your local utility