Texas Solar Incentives and Rebates (2025)

Texas homeowners can access substantial federal incentives for solar, though the state offers limited additional programmes compared to other markets.

Federal incentives

Investment Tax Credit (ITC)

The federal ITC remains the most valuable solar incentive for Texas residents:

• 2024-2025: 30% of total system cost
• 2026-2027: 26% of total system cost
• 2028+: 22% of total system cost

This credit applies to the full installed cost, including panels, inverters, mounting, and installation labour.

Solar Investment Tax Credit requirements

• System must be installed at your primary or secondary residence
• You must own the solar system (not applicable for leases)
• System must be new and placed in service during the tax year
• Sufficient tax liability to use the credit (can carry forward unused portions)

State-level programmes

Property tax exemption

Texas offers a property tax exemption for the added value of solar installations. Your home's assessed value won't increase due to the solar system, saving ongoing property taxes.

Net metering policies

Most Texas utilities offer net metering, though policies vary by provider:

• Oncor (Dallas-Fort Worth): Full retail rate credit for excess generation
• CenterPoint (Houston): Net metering available with monthly reconciliation
• AEP Texas: Net metering programmes vary by service area
• TNMP: Net metering with retail rate credits

Utility-specific programmes

Austin Energy

Austin Energy offers additional local incentives:

• Solar rebates for residential customers
• Performance-based incentives for larger systems
• Value of Solar tariff as alternative to net metering

CPS Energy (San Antonio)

CPS Energy provides:

• SolarHost programme for rooftop solar development
• Net metering for residential customers
• Solar rebates (subject to available funding)

El Paso Electric

• Residential solar rebate programme
• Net metering with monthly netting
• Time-of-use rates that can benefit solar owners

How to claim incentives

Federal tax credit

1. Keep all receipts and documentation from your installer
2. File IRS Form 5695 with your tax return
3. Claim the credit against your federal tax liability
4. Carry forward unused credits to future tax years if needed

Local programmes

Your installer should handle utility rebate applications, but verify this during the contracting process. Most utility programmes require:

• Pre-approval before installation
• Use of approved installers and equipment
• Inspection and interconnection approval

Timing considerations

The federal ITC begins to step down after 2025, making near-term installation financially advantageous. Local utility programmes often have limited funding that can be exhausted during peak installation seasons.

Financial impact example

For a typical £25,000 solar system in Texas:

• System cost: £25,000
• Federal ITC (30%): -£7,500
• Net investment: £17,500
• Annual electricity savings: £2,800-£3,500
• Payback period: 5-6 years