Texas Solar Panels

Under Texas Tax Code Section 11.27, the added value that a solar energy system brings to your home is 100% exempt from property tax assessments. Since solar panels can increase a home’s market value by $15,000–$25,000, this exemption can save homeowners an estimated $400–$600 per year in property taxes — potentially more than $10,000 over the lifetime of the system.

To qualify, the solar system must be owned (not leased) and primarily used to produce and distribute energy consumed on-site. Eligible systems include solar photovoltaic panels for electricity generation as well as solar thermal devices such as solar water heaters. The exemption has been available to Texas homeowners since 1978 and applies statewide.

To receive the exemption on your tax bill, you must file Form 50-123 with your county appraisal district by April 30 of the tax year. This is a permanent, ongoing benefit — one of the most valuable solar incentives available to Texas homeowners in 2026.

Texas law allows businesses to deduct the full cost of a qualifying solar energy device from their state franchise tax. This incentive is designed for commercial and business entities — not individual residential homeowners — and can meaningfully reduce the upfront cost of a commercial solar installation.

Qualifying solar energy devices include systems that convert solar energy into thermal, mechanical, or electrical energy, as well as systems that store or distribute that converted energy. This makes both solar PV systems and solar thermal installations eligible for the deduction.

Businesses considering a solar installation should consult a tax professional to determine how this deduction interacts with other business tax strategies. For more details, visit the Texas Comptroller’s franchise tax page or contact the Comptroller’s office directly.

Texas does not have a statewide net metering law, meaning there is no universal requirement for utilities or retail electricity providers (REPs) to compensate solar homeowners for excess energy. Instead, individual REPs voluntarily offer solar buyback plans, and the rates and terms vary significantly. There are three main types of plans: uncapped credit plans (which typically offer the most savings), capped credit plans, and real-time metering plans.

Several REPs offer competitive solar buyback programs in Texas. Green Mountain Energy’s Renewable Rewards Program credits excess solar at the full retail rate. TXU Energy’s Home Solar Buyback provides credits at the avoided-cost rate. AEP Texas and CPS Energy (San Antonio) also offer buyback at the avoided-cost rate. Austin Energy customers benefit from the Value of Solar (VOS) Tariff at 9.91¢/kWh for all energy generated.

Because the best buyback plan depends on your location, utility service territory, and energy usage, it is important to compare available REPs in your area. The Public Utility Commission of Texas (PUCT) oversees electricity providers in the state and is a good starting point for researching your options.

Austin Energy’s Solar Rebate Program provides a one-time $2,500 flat rebate to residential customers in the Austin service territory who install a qualifying solar PV system. To be eligible, the system must be at least 3 kW (3,600 W per updated guidelines) in size, installed by a certified contractor, and the homeowner must complete Austin Energy’s solar education course prior to installation.

In addition to the upfront rebate, Austin Energy customers benefit from the Value of Solar (VOS) Tariff, which pays 9.91¢ per kWh for all energy your solar panels generate — regardless of whether you use it on-site or export it to the grid. This ongoing payment can significantly reduce your monthly electric bill over the life of your system.

Austin Energy’s solar rebate is considered one of the most accessible and straightforward utility solar incentives in a major Texas metro in 2026. Contact Austin Energy or visit their official website to confirm current program availability, as funding is subject to change.

Austin Energy provides residential customers with a rebate of up to $2,500 for the installation of a qualifying home battery storage system. This incentive is designed to encourage homeowners to pair battery storage with their solar installations, improving grid resilience and enabling greater energy independence.

Battery storage systems allow homeowners to store excess solar energy generated during the day and use it during evening hours or during grid outages — a particularly valuable feature in Texas given the state’s history of grid stress events. Pairing a battery with solar maximizes the value of both the Austin Energy solar rebate and the Value of Solar tariff.

Eligibility requirements and available funding may change, so homeowners are encouraged to contact Austin Energy directly or visit their official website to confirm current program details before purchasing a battery system.

Oncor Electric Delivery’s Residential Solar Program provides incentives for homeowners in the Dallas-Fort Worth area and other parts of Oncor’s service territory. As of 2026, the program requires that solar installations be paired with a battery energy storage system to qualify. The solar system must be between 3 kW and 15 kW (DC) in size, and the estimated incentive can reach up to $9,000 for larger systems with significant storage capacity.

The exact rebate amount is not publicly disclosed and depends on multiple factors including system size, battery capacity, and installation details. The $9,000 figure represents the upper end of the incentive range for qualifying solar-plus-storage systems. Both residential and commercial customers in Oncor’s territory may be eligible.

To apply or get a precise incentive estimate, visit the official program website at takealoadofftexas.com or contact Oncor directly. Because this program requires battery pairing, homeowners should factor battery costs into their overall system budget when evaluating the net financial benefit.

The AEP Texas SMART Source Solar PV Program provides one-time cash rebates to residential customers of AEP Texas Central and AEP Texas North, which together cover approximately 97,000 square miles of west and south Texas. Rebate amounts range from $1,500 to $3,000 depending on the size of the installed solar system, with systems needing to be at least 3 kW to qualify.

Some sources indicate that incentives for larger systems could reach up to $8,500 based on kilowatt capacity, though the standard residential rebate cap is $3,000. Completion of a solar education course may also be required as part of the application process. The program is designed to make solar more accessible for customers in AEP’s largely rural and suburban service territory.

Homeowners interested in this program should contact AEP Texas directly or visit the AEP website to confirm current rebate levels, eligibility requirements, and application procedures, as program funding and terms are subject to change.

New Braunfels Utilities (NBU) offers residential solar rebates of up to $3,000 for customers who install a qualifying solar PV system. The rebate amount depends on the size and orientation of the system — for example, west-facing (Tier 2) systems may receive $0.50 per watt up to the $3,000 maximum. South-facing systems may qualify for higher per-watt rates.

To be eligible, customers must use a participating contractor and complete the NBU solar education course before installation. These requirements ensure that customers are well-informed about their solar investment and that installations meet NBU’s quality standards.

NBU customers should contact the utility directly or visit the NBU website to confirm current program availability, participating contractors, and the specific rebate tiers applicable to their system configuration.

The City of Sunset Valley offers a supplemental solar rebate of $1.00 per watt installed, up to a maximum of $3,000 (for systems up to 3 kW), for residents who install a qualifying solar PV system. This rebate is in addition to the Austin Energy solar rebate, making it a valuable stacking opportunity for eligible homeowners.

To qualify for the Sunset Valley rebate, residents must first qualify for and receive the Austin Energy solar rebate. The system cost must also be $6 per watt or less. This means the combined incentive from both Austin Energy ($2,500) and Sunset Valley (up to $3,000) could total up to $5,500 for eligible residents.

Homeowners in Sunset Valley should contact the City of Sunset Valley and Austin Energy to confirm current program requirements and ensure their installer and system meet all eligibility criteria before proceeding with installation.

San Marcos Utilities (SMTX) provides a residential solar rebate of $1.00 per watt of installed solar capacity, up to a maximum of $2,500. The rebate cannot exceed 50% of the total installed system cost, ensuring the incentive is proportional to the homeowner’s investment.

To qualify, the solar system must be south-facing and installed by a NABCEP-certified installer who provides a minimum 5-year workmanship warranty. These requirements help ensure system quality and long-term performance for participating customers.

San Marcos Utilities customers interested in this program should contact SMTX directly to confirm current program availability, funding status, and any additional eligibility requirements before signing a contract with an installer.

Denton Municipal Electric (DME) offers one of the more generous solar rebate programs among Texas municipal utilities through its GreenSense Energy Efficiency Rebate Program. Residential solar customers can receive rebates ranging from $0.40 to $1.50 per watt of installed capacity, with a maximum rebate of $30,000 per system.

The per-watt rate varies based on system characteristics and program tier. The high maximum rebate cap makes this program particularly attractive for homeowners installing larger solar systems. DME serves the City of Denton and surrounding areas in North Texas.

Homeowners in the DME service territory should contact Denton Municipal Electric directly to confirm current rebate rates, available funding, and application requirements, as program terms are subject to change based on available budget.

Bandera Electric Cooperative (BEC) launched its Smart Battery Program in early 2026, powered by Enphase 10C 20 kWh home batteries. Members in a BEC Fiber zone can participate for just $36.99 per month, added directly to their regular electric bill — making home battery backup accessible without a large upfront cost. Participants must commit to a minimum 10-year program term.

For members who already own an Enphase battery system, BEC also offers a Bring Your Own Battery (BYOB) Program. Under this option, Bandera Electric pays participants $50 per kW of enrolled battery capacity per year in exchange for the ability to use the stored energy to support grid stability during peak demand periods.

Both programs represent an innovative approach to battery storage incentives through a rural electric cooperative. Interested BEC members should contact Bandera Electric Cooperative directly to confirm eligibility, current program availability, and enrollment details.

Tesla Electric offers a Virtual Power Plant (VPP) program for Powerwall owners in select areas of Oncor’s and CenterPoint’s service territories in Texas. Participants receive a $10 per month electric bill credit in exchange for allowing Tesla to discharge their Powerwall’s stored energy back to the grid during periods of high demand or grid stress.

To participate, homeowners must use Tesla Electric as their Retail Electricity Provider (REP) and own a Tesla Powerwall battery system. The program is designed to support grid reliability on the ERCOT grid while providing Powerwall owners with a modest ongoing financial benefit that helps offset the cost of their battery investment.

This program is particularly relevant given Texas’ history of grid reliability challenges. Homeowners interested in enrolling should visit Tesla’s website or contact Tesla Energy directly to confirm current eligibility, service territory coverage, and enrollment steps.

The Texas Energy Fund (TEF), administered by the Public Utility Commission of Texas, allocates $1.8 billion statewide to strengthen backup power at critical facilities. Through its Backup Power Package Program, the fund offers a combination of grants and low-interest loans for systems that integrate battery storage, solar PV, and/or backup generators.

Eligible facilities are public sector entities including hospitals, water treatment plants, emergency shelters, fire and police stations, communication centers, and emergency response hubs. This program is not available to individual residential homeowners but is a significant resource for local governments and public institutions seeking to improve energy resilience.

Public entities interested in applying should contact the Public Utility Commission of Texas (PUC) for current application windows, funding availability, and eligibility requirements. Given the scale of funding, this program represents one of the largest battery and solar storage incentive opportunities in Texas for qualifying facilities.

TX-PACE (Property Assessed Clean Energy) is a financing program available in several Texas jurisdictions that allows commercial and residential property owners to fund solar PV and battery storage installations through long-term loans. Repayment is tied to the property’s tax bill rather than the owner’s personal credit, which often results in lower interest rates and longer repayment terms — sometimes stretching over decades.

Because the financing is secured by the property itself, PACE loans can make large solar and storage projects financially manageable by eliminating or significantly reducing upfront costs. This is especially useful for commercial property owners or homeowners who want to install a larger system than they could otherwise afford out of pocket or through traditional financing.

TX-PACE availability varies by jurisdiction, so property owners should check with the State Energy Conservation Office (SECO) or their local government to determine whether their property is in a participating area and to find approved PACE program administrators.

The Rural Energy for America Program (REAP), administered by the USDA Rural Development office, provides guaranteed loan financing and competitive grants to eligible agricultural producers and rural small businesses for the purchase and installation of renewable energy systems, including solar PV. Grant funding can cover up to 50% of eligible project costs, with loan guarantees available for the remainder.

In Texas, REAP is particularly relevant for farms, ranches, and rural businesses that want to reduce energy costs through solar installations. Eligible projects include solar photovoltaic systems, and the program can be combined with other financing tools to maximize affordability. There is no minimum system size, making it accessible for a wide range of project scales.

Applications are accepted on a rolling basis, and funding is competitive. Texas rural business owners and agricultural producers should contact their local USDA Rural Development state office or visit the USDA website to learn about current funding cycles, application requirements, and eligible project types.

Texas has strong solar access protections enshrined in state law that prevent homeowners associations (HOAs), municipalities, villages, and other private entities from prohibiting or unreasonably restricting the installation of rooftop solar panels. This means that even if your HOA has aesthetic guidelines, it cannot outright ban solar installations on your home.

While HOAs may still impose reasonable restrictions related to placement or appearance — such as requiring panels not to be visible from the street — they cannot use these rules as a de facto ban on solar. This protection gives Texas homeowners the legal right to go solar regardless of their HOA’s preferences, removing a common barrier to adoption.

If you believe your HOA is unlawfully restricting your ability to install solar panels, you may wish to consult the relevant sections of the Texas Property Code or seek legal advice. This protection applies statewide and is an important foundational right for all Texas solar homeowners.