Local Texas Solar Rebates & Incentives

There are many Texas solar power incentives at all levels. Let’s start with the federal incentive. The Solar Investment Tax Credit (ITC) is a federal tax credit that is a dollar for dollar reduction on income taxes.

The state of Texas does not offer a statewide solar tax credit, but most local utilities do offer incentives to go solar, add battery backup, or to make home improvements related to energy efficiency (check this website for detailed information). The structure and availability of rebates vary across the state, but most utilities offer rebates to homeowners and business owners on a price-per-watt basis that is capped at a maximum amount per project. The funds may be available in perpetuity or released on a periodic (e.g. annual) basis for residential and/or commercial solar installations, The utilities have an application process for each project, which your solar installer will manage for you.

There are other local incentives as well. Some areas, such as Austin, offer a property tax exemption, for solar power customers.

AMERICAN ELECTRIC POWER (AEP)

AEP serves a multitude of cities in Texas including Corpus Christi, Abilene, McAllen, Harlingen, San Angelo, and others. In 2021, AEP is moved to a fixed incentive structure for its residential solar rebate. The residential rebate value is $1,500 for systems below 5 kW (with a minimum size of 3kW), $2,250 for systems that are at least 5 kW but less than 7.5 kW, and $3,000 for systems that are 7.5 kW or larger. The commercial rebate is unchanged from 2020 at $0.50 per watt up to 25 kW and $0.25 per watt for any capacity exceeding 25 kW up to 200 kW. The commercial rebate cannot exceed $56,250 (200 kWdc).

AEP operates in a competitive electricity market, so net metering would be handled by your retail electric provider (REP), if available. More incentives can be found on AEP’s website.

The Austin solar rebate helps homeowners in the Austin area who want to make the switch to solar. Austin Energy is currently offering a flat $2,500 post-installation rebate for those that go solar, as well as net metering. Residential customers receive a Value of Solar credit on their monthly bill for every kilowatt-hour (kWh) of electricity generated by their solar PV system, at the current rate of 9.7 cents per kWh (effective January 1, 2018). Commercial net metering is available for systems under 20 kW-AC.Austin Energy also offers a community solar option for residential customers and a “Green Choice Plan”, which are both great options for those that do not own their home but want to use clean electricity. More info about the City of Austin solar rebate can be found here.

This co-op does not offer specific solar rebates but does offer several rebates for energy efficiency upgrades and homes. More info here.

Brazos serves multiple cities including Waco and Lubbock. They do not offer solar rebates. More info here.

BTU serves the city of Bryan. This utility does not offer rebates for solar customers but it does offer other rebates for energy efficiency. Find more info here.

CenterPoint serves the Houston area. They do not offer a solar rebate. However, they do rebates to home builders, with more info here.

Coleman County Electric Co-op does not offer a solar rebate but does offer a solar buyback for systems up to 10 kW in size. For systems above 10 kW, CCEC offers a bill credit at the retail rate for solar energy generation.

This co-op serves the Comanche area. They do not offer solar rebates or solar incentives. They do have specific information on how to connect solar systems here.

CoServ serves Northern Texas and offers a periodic post-installation solar rebate on residential and commercial systems that is available from the announced start date until funds are depleted. The 2020 residential rebate was recently announced and remains a tiered structure similar to last year. The first 4kW DC is rebated at $0.40 per watt, $0.30 per watt on the portion of the system between 4kW and 7kW, and $0.20 per watt between 7kW and 10kW. The rebate is capped at $3,100 per system. A commercial rebate of $300 per kilowatt for the first 100kW DC, capped at $30,000, is also available in 2020. CoServ offers net metering for systems up to 50kW. You can learn more from CoServ here.

CPS serves the San Antonio area. There is an up-front solar rebate available for residential and commercial projects. As of December 1st, 2018, the residential rebate has changed to a flat incentive at $2,500 per project, which will drop to $1,500 per project when the current funding pool is fully allocated. The commercial solar rebate remains at $0.60/watt up to $80,000. Funds for both rebates are limited and available on a first-come, first-serve basis. There are some requirements, which can be found here. The CPS solar rebate program has been extended until at least July 31, 2022.

Denton offers free energy audits and energy efficiency rebates as well as a solar incentive. The solar rebate varies between $0.40 and $0.80 per watt depending on the system size, up to $30,000 and not to exceed 50% of the total installation cost, If the solar project includes battery storage, the rebate increases to between $0.60 and $1.20 per watt. The funds are limited, and the rebate is renewed each October.

El Paso Electric has energy efficiency programs, but no longer offer rebates on solar projects. More info can be found here.

Engie is a commercial retailer based in Houston. No solar rebates are offered currently, but they do offer renewable energy certificates.

ENTRUST ENERGY

Entrust is a nationwide electric provider based in Houston. No solar rebates are provided currently.

Farmers Electric Cooperative, which serves almost 50,000 members across 12 counties in North Texas, offers a $500 rebate for renewable energy distributed generation systems up to 50 kW in size. The co-op also offers rebates for home energy efficiency improvements ranging from insulation to geothermal heat pumps. Learn more about the rebate requirements from Farmers Electric here.

This co-op services multiple North Texas counties. There are no solar rebates or incentives offered at this time, but check back here for updated information.

GP&L offers bill credits for those who install solar. The solar rebate of $0.75 per watt, up to $5,000 per system, is renewed every October and available until that year’s funds runs out. Check back here for updated information.

This utility, serving rural customers in West Texas and the Panhandle, does not offer rebates for solar panels or other energy efficiency incentives. Check this page for any updates.

Greenville does not offer solar rebates, but they do participate in net metering. Click here for more info.

GVEC offers a post-installation solar rebate of $0.75 per watt up to $3,000. GVEC also offers home energy efficiency rebates. Payment is delivered to the homeowner after the system passes inspection. This program will be ending on April 1, 2019. To be eligible for the rebate, your system must be installed by March 31st.

Hamilton County does not offer solar rebates but does offer an option to use solar power through distributed generation.

This co-op does offer multiple energy efficiency rebates, including a solar rebate of $0.10 per watt on the solar installation. This rebate maxes out at $500 per member.

HILCO offers several rebates, including a solar installation rebate. Members who install solar are eligible to receive $200 per kW, with a maximum of $1,000 per member. Click here for more information.

J-A-C operates in the northern region of the state. There are no solar rebates offered however. For more information, click here.

LCRA is a utility cooperative that operates in the Austin area. There are currently no solar rebates but they do provide rebates, and are committed to using renewable energy.

Luminant, based in Dallas, does not offer solar rebates but does have information on their environmental practices here.

Mid-South, a cooperative based in Navasota, offers a solar rebate on 20% of total construction costs up to $2,000, as well as home improvement and energy efficiency rebates. More info can be found here.

Navarro’s rebate programs have expired, and funds are no longer available. Check back here for updated information. The co-op does offer a dollar-for-dollar solar buyback, but those credits do not roll over from month to month.

Navasota does not offer solar rebates but does offer net metering. More information on their distributed generation policies can be found here.

New Braunfels Utility offers energy efficiency, water conservation, and solar rebates. NBU pays the solar rebate of up to $3,000 as a bill credit after system inspection.

Oncor offers a residential solar rebate in its territory, which covers much of the Dallas-Fort Worth metroplex, the I-35 corridor from DFW to the northern Austin suburbs, and other parts of North and West Texas. The rebate is calculated for each system using Oncor’s calculator, but could be as high as $5,000 for a 7.2-kilowatt SunPower system on a Dallas house that is ideally suited for solar. The solar rebate is renewed annually at the beginning of the year and tends to run out within a few months. It has been renewed for 2021. Oncor also offers rebates for commercial solar projects and home energy efficiency projects.

PEC operates in the Hill Country. They do not offer solar rebates, but do participate in net metering. Find info here.

This co-op operates in the Lubbock area. There are no solar rebates offered with this coop but they have a helpful page with lots of information regarding solar power.

Taylor Electric does not currently offer a solar rebate but does have rebates for energy efficiency improvements which you can learn more about here. The co-op offers a dollar-for-dollar solar buyback, but those credits do not roll over from month to month.

TNMP operates in several areas of Texas. They do offer several energy efficiency rebates, but none specific to solar power. Check here for more details.

This co-op in the Dallas Fort Worth area has a water heater rebate program but not a solar power rebate. Tri-County offers a dollar-for-dollar solar buyback, but those credits do not roll over from month to month. Learn more about the program from Tri-County here.

United offers several rebate programs for energy efficiency efforts and has a community solar program. While there are no rebates offered at the moment for solar panel installation, check back here for updated information.

Wise operates in the north central region of Texas. There are no solar rebates offered currently, but multiple rebates are offered for energy efficiency.

* Tax credits subject to change. Consult your tax advisor regarding the solar tax credit and how it applies to your specific circumstances. Please visit the dsireusa.org website for detailed solar policy information. We do not provide legal or tax advice.

Texas does not have a statewide solar rebate program for homeowners, but it does offer a property tax exemption for residential and commercial renewable energy systems.

• Incentive Value: Equal to 100% of your property tax value, including the assessed value of your solar power system
• Frequency: Annual tax exemption

If you install a solar energy system in Texas, you will not pay taxes for any corresponding increase in your home’s property value. For example, if a property owner in San Antonio has a $350,000 home and installs a $25,000 solar panel system, the city would calculate their property taxes at $350,000, not $375,000.

Depending on your exact location in Texas, solar incentives may be available from local governments or your utility company. 

The following are some of the largest solar incentive programs offered throughout the Lone Star State:

Local Texas Solar Incentive

Eligible Location

Estimated Savings

Qualifications

Frequency

Oncor Residential Solar Program

Oncor service territory, including the Dallas-Fort Worth area

Up to $9,000 per solar PV system

Available for 3–15 kW home solar systems with batteries

One-time

CenterPoint Energy Residential

CenterPoint service territory, including

$225 per kW or $0.08 per kilowatt-hour

Offered through approved contractors

One-time

Solar Program

Houston

(kWh)

AEP Texas SMART Source Solar PV Program

AEP Texas service territory

Up to $3,000 per solar PV system

Available for home solar systems up to 30 kW

One-time

Austin Energy Solar PV Rebate and Incentives

Austin

Up to $2,500 per solar PV system

Available for home solar systems with at least 3 kW of installed capacity, and you must take a solar course

One-time

The table above covers the largest solar incentive programs in Texas. However, the state has a large number of municipal utility companies and electric cooperatives that operate in specific regions. If you’re considering rooftop solar and receive electricity from a small power company, check online to make sure you aren’t missing any financial incentives.

The solar incentive programs available in Texas are managed by different electric companies and eligibility requirements vary. Generally, these incentives are only offered through approved contractors.

Texas is one of the sunniest states, as you can see on the World Bank Global Solar Atlas, and ranks second in the country for solar power. Say a typical 6 kW home solar system generates over 9,500 kWh of energy per year under favorable site conditions, and residential customers in Texas pay an average electric tariff of 14.26 cents per kWh, according to the U.S. Energy Information Administration. Based on these figures, 9,500 kWh of solar generation could save you over $1,350 in electric bills in Texas each year.

According to a 2022 study by the National Renewable Energy Laboratory (NREL), residential solar systems have a market price of $2.95 per watt in the U.S. This means that a typical 6 kW solar panel installation costs around $17,700. Here’s how solar incentives can help lower your system cost in Texas:

• You can claim the 30% solar federal tax credit — worth $4,410 in this case — and your project cost decreases to $13,290.
• Assuming you can claim additional incentives through one of the programs available in the state, your upfront cost will drop even more. For example, the AEP Texas SMART Source Solar PV Program would drop your cost by another $3,000, bringing your total to $10,290.

A home solar system with a net cost of $10,290 and annual savings of $1,350 has a payback period of seven to eight years. Plus, high-quality solar panels have a warranty of up to 30 years, which means the payback period is only a small fraction of their lifespan.

Texas has abundant sunshine, which increases the productivity of solar panels. In addition, many of the power companies operating in the Lone Star State have solar incentive programs, which you can combine with the federal tax credit to capitalize on savings for your solar project. Texas does not have a statewide net metering policy, but many local electricity providers offer the benefit. These factors make it worth it for homeowners to make the switch to solar in Texas.

Each incentive program has its own conditions and eligibility requirements. 

However, the best solar companies are familiar with the application process of each program and can check to see if your solar installation qualifies.