Guide to Texas Solar
Incentives, Rebates, and Tax Credits

Texas is among the highest solar-generating states in the United States, according to the U.S. Energy Information Administration. Its abundant geothermal resources in the east and south make it highly effective for solar energy generation. Given the rising cost of electricity in the Lone Star State, the low cost of solar panels, and concerns about power grid reliability, there’s never been a better time for Texans to go solar. 

Making the switch can yield drastic energy savings and help the environment — and thanks to current Texas solar panel incentives, going solar can also be affordable. We’ll discuss Texas solar incentives below so you can take advantage of solar energy without breaking the bank.

Federal Solar Tax Credit

The Federal Solar Tax Credit, sometimes referred to as the Investment Tax Credit or the Residential Clean Energy Credit, is a government tax incentive that encourages Texas homeowners to add solar to their homes. The credit may allow consumers to deduct 30% of their total solar system expenses from their federal taxes. The Inflation Reduction Act extended the 30% Texas solar tax credit to 2033, at which point it will fall to 26% and further to 22% by 2034.

Federal Tax Credit Eligibility

To receive the maximum tax credit, you should owe as much in taxes as the 30% credit would deduct. This credit may not have any effect if you do not owe federal taxes. Keep in mind that it only applies to the initial purchase, so if you’ve purchased a house that already has solar, you may not be eligible to take the credit.

Choosing Axia for Your Solar Installation

With great solar rebates and incentives in Texas, it’s a no-brainer for residents to make the switch and take advantage of these programs. If you’re ready, let Axia Solar be the team to help you harness the sun’s power. We’ve taken the stress and confusion out of solar panels by creating a new and empowering experience built around your unique needs. 

As a full-service solar company, we’re here to take care of you every step of the way.

Streamlined Installation

We design a solar system that best suits your home — and we take care of all the paperwork and permits, handling the entire installation quickly and efficiently.

Ongoing Support for Warranty Claims

After installation, we’re here to offer continued support for warranty claims, ensuring your solar equipment continues to work for you for years to come.

Quality Solar Panels

You deserve the best, and we’re here to make that happen. We’re backed by Qcells and use their industry-leading panels in our installations.

Reduced Costs

You don’t have to break the bank to switch to solar. We build systems that meet your needs — so you don’t pay for unnecessary equipment — and we have in-house financing options to bring costs down further.

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Net Metering in Texas: Axia + Chariot Energy

Unlike California and many other states, Texas does not have a net metering policy on the state level, but residents still have options for deriving value from surplus energy generation. Many utility providers in the state credit solar-owning customers for producing energy with their solar panels. With net metering, solar-energized homes in Texas can earn credits toward their utility bill that may offset up to 100% of their electricity expenses each month. In other words, the utility provider buys back excess energy to help you maximize your savings. 

The solar PV systems we sell in Texas’s deregulated energy market are all grid-tied, which means Texas residents who generate more energy than they consume can sell it back to companies like our partner, Chariot Energy, and when the sun isn’t shining, they can then draw power from the grid. Excess energy is then carried over to the next month and applied as a credit. Chariot customers will not pay utility charges on the energy their panels produce. 

Chariot’s solar buyback plans are some of the best for Texas rooftop solar customers because:

  • They offer a simple three-step enrollment process
  • You can lock in a low rate up to 90 days in advance
  • The credits you accrue can apply to the entire bill for the next month, including energy charges, utility charges, and tax.

How You Are Credited

Utility providers evaluate the energy your home uses from the grid and compare it to the amount your solar panels send to the grid. They use this information to value your credits at the energy cost rate. According to Texas energy data from the U.S. Energy Information Administration, the average residential rate of electricity is around 14.77 cents per kilowatt hour as of January 2023. During peak periods of demand, this can be more depending on where you live. Your energy credit may be able to roll over to the next month if it is worth more than your total energy charges.

Participating Utility Companies

If your home is powered by solar energy and you’d like to participate in net metering or solar buyback, you can work with any of the following providers that serve your area:

  • Chariot Energy (Preferred Partner)
  • El Paso Electric
  • CPS Energy
  • Green Mountain Energy
  • TXU Energy
  • Reliant Energy
  • Pulse Power
  • Rhythm
  • Octopus
  • MP2 Energy
  • City of Brenham

Solar Energy System Property Tax Exemption

Not only can solar panels save you money, but they may also increase your home value. Thanks to Texas House Bill 2500, most solar systems may now be exempted from property taxes. Through the renewable energy property tax exemption, residents do not have to pay extra taxes that would otherwise be required due to the heightened home value that solar panels provide. If you’d like to apply for this exemption, you can do so through the state’s Comptroller Office

Local Programs Include:

  • Austin Energy Residential Solar Rebate Program: Those who live in Austin and install solar panels at home may be eligible for a rebate of $2,500. This rebate is only available if the homeowner takes Austin Energy’s course on solar education and installs solar products that qualify. Participants can also qualify for the Austin Energy Value of Solar Tariff, which offers $0.097 per kilowatt hour generated by your panels.
  • City of Sunset Valley Rebate Program: Local homeowners in Sunset Valley may be eligible for a rebate of up to $1 per watt of solar installed with a cap of $3,000 per home. 
  • CPS Energy Solar Rebate Program: CPS Energy customers can be eligible for a rebate of up to $3,600 for the energy their solar panels generate. An additional $500 may be given to those who purchase locally sourced panels.
  • Garland Power & Light EnergySaver Solar Rebate Program: Customers of Garland Power & Light may qualify to receive credits on their utility bill for each kilowatt hour of excess solar energy they produce with their solar panels.
  • Guadalupe Valley Electric Cooperative Solar Rebate: Along with the City of Sunset Valley, Guadalupe Valley Electric provides Texas solar rebates to eligible homeowners in their municipality.

Check with your utility companies to find out what kinds of solar rebates in Texas might be available in your area.

How Much Can I Save?

Considering that energy costs in Texas have gone up by 18% since 2021 and continue to increase, and given the high average cost per kilowatt hour in Texas, switching to solar can mean big savings for residents. Your savings will vary depending on the size of your system, where you live, how much sun you get each day, what kinds of Texas solar incentives are available in your area, and more. So, contact our trusted solar advisors to get an idea of how much you could potentially save by switching to solar energy based on your unique circumstances.

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Texas Solar Incentives FAQ

Here are some frequent questions we get from current and
prospective customers about Texas solar tax credits, rebates, and other solar concerns.

The Texas solar tax credit may only be claimed one time per solar-powered property, as it is designed to offset only the initial costs. If you want to reap the benefits of the energy your system produces monthly, look into a net energy metering program in your area.

Texas residents report that it may take around 11 years on average to break even on solar panels, but for you, this payback period will depend on how much you spend and how much energy your panels generate. The more energy you produce, the faster your system will pay itself off. Texas solar incentives, rebates, and tax credits can also speed up the process.

Solar panel systems can increase property taxes for homeowners in some states, but not in Texas. The Texas Property Tax Code provides a 100% tax exemption on the increase in home value. For example, if your home is appraised at $300,000 before solar and the solar panels increase the value by $30,000, the tax exemption keeps your taxable property value at $300,000 instead of $330,000. This does not apply to sales tax for the initial purchase of the system, however.

It is possible that solar panels may increase your insurance rates because of the value they add to your home. Insurance companies price their premiums based on home values so that your home has sufficient coverage in the event of a covered incident. So, if you purchase solar panels, you may need to adjust your insurance policy to align with your new home value.

Unfortunately, no solar program is truly free. Companies that offer “free panels” are not being fully transparent in most cases. While the panels themselves may be free, you’ll still have to pay for the installation, and there may be other hidden costs as well. If the company is offering both the panels and the installation for free, be wary of offers that are too good to be true and read up on how to avoid falling for solar scams. You may be able to find power purchase agreements (PPAs) in which a company will install solar panels on your home for free, but you will be responsible for purchasing the electric output.

Texas is a solar-friendly state, but solar panels are not currently mandatory for homeowners. However, state laws protect a homeowner’s right to go solar if they wish to do so.