Texas Solar Panels

Under Texas Tax Code §11.27, homeowners who install a solar energy system are entitled to a 100% property tax exemption on the increase in appraised home value attributable to the solar installation. Because solar systems can add $15,000–$25,000 or more to a home’s assessed value, this exemption typically saves homeowners $400–$600 per year in property taxes — adding up to more than $10,000 over the lifetime of the system.

To claim the exemption, you must file Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices) with your county appraisal district by April 30 of the year following installation. The exemption applies statewide across all Texas counties and remains in effect as long as the solar device is operational — you do not need to re-file annually unless you expand your system.

Eligibility requires that the solar system be owned (not leased) and primarily used for producing and distributing energy on-site. This is currently Texas’ most universally available solar incentive for 2026, as it applies to every homeowner in the state regardless of their utility provider.

Texas does not require utilities to offer net metering. Instead, approximately 85% of the state operates in a deregulated electricity market (ERCOT), where homeowners can shop for a Retail Electric Provider (REP) that offers a solar buyback plan. Buyback rates vary widely by provider — for example, TXU Solar Buyback in the Oncor/DFW territory offers retail-rate credits (effectively 1:1 net metering), Green Mountain Energy in the CenterPoint/Houston area pays approximately 8.5¢/kWh, and Chariot Solar Buyback in AEP/TNMP territory pays around 7.0¢/kWh.

In regulated territories, the rules differ. Austin Energy uses a Value of Solar (VoS) tariff currently set at 9.91¢/kWh for all exported solar energy. Customers buy electricity at the full retail rate (~12¢/kWh) and receive 9.91¢/kWh credit for what they export — this is not traditional net metering but is one of the more favorable export rates in Texas. CPS Energy (San Antonio) offers a net metering-style program where credits offset consumption at full price up to usage, with any surplus credited at the avoided cost rate.

Because buyback rates and plan terms change frequently, it is critical to compare REP solar buyback plans before or shortly after installing your system. Contracts typically run 12–36 months. Choosing the right REP can significantly impact your solar payback period, so always verify current rates directly with providers before signing.

Austin Energy’s Residential Solar PV Rebate Program provides a $2,500 cash rebate to customers who install a solar panel system of at least 3 kW in size. To qualify, homeowners must complete Austin Energy’s solar education course prior to installation and use a participating, approved solar contractor. The rebate is available to both single-family and multifamily customers, with multifamily buildings eligible for up to $2,500 per dwelling unit.

In addition to the rebate, Austin Energy customers benefit from the Value of Solar (VoS) tariff, which credits all exported solar energy at 9.91¢/kWh (2026 rate) — one of the highest export compensation rates among Texas utilities. This combination of an upfront rebate and ongoing export credits makes Austin Energy’s service territory one of the most financially attractive areas in Texas for going solar.

Customers in the City of Sunset Valley (an Austin suburb served by Austin Energy) may also stack an additional rebate of up to $1.00 per watt, capped at $3,000, on top of the Austin Energy rebate. Because these programs have limited annual funding, homeowners are encouraged to apply early in the calendar year to avoid missing out before funds are exhausted.

Austin Energy’s Value of Solar (VoS) tariff is the mechanism by which residential solar customers are compensated for the electricity their systems export to the grid. The 2026 rate is set at 9.91 cents per kilowatt-hour (¢/kWh). Unlike traditional net metering — where exported energy offsets your bill at the full retail rate — the VoS tariff pays a separately calculated rate designed to reflect the true value solar provides to the grid, including avoided fuel costs, capacity, and environmental benefits.

Under this structure, homeowners purchase electricity from Austin Energy at the standard retail rate (approximately 12¢/kWh) and receive a separate credit of 9.91¢/kWh for every kWh they export. While this means exports are valued slightly below the retail purchase rate, the VoS rate is significantly higher than the 3–4¢/kWh avoided-cost rates paid by many other Texas utilities, making it a competitive compensation structure.

The VoS rate is reviewed and updated periodically by Austin Energy. Homeowners considering solar in the Austin area should factor this export rate into their financial projections, as it directly affects the system’s payback period and long-term savings. The tariff applies automatically to all Austin Energy residential solar customers enrolled in the solar program.

Oncor’s Residential Solar Program provides significant rebates — up to $9,000 — for homeowners in the Oncor service territory (Dallas-Fort Worth, Waco, Midland, Tyler, Wichita Falls, and surrounding areas). Critically, battery storage is required to qualify; solar-only systems are not eligible for this rebate. The solar system must be between 3 kW and 15 kW in size and installed with a qualifying battery storage system.

The exact rebate amount is not fixed — it depends on multiple factors including the specific solar panels and inverter chosen, the system’s location, shading conditions, and available program funding at the time of application. Homeowners should contact Oncor or a participating installer to get a rebate estimate specific to their system design before committing to a purchase.

The program typically runs from February through November each year, or until annual funding is depleted — whichever comes first. Because this is one of the largest utility rebates available in Texas, demand is high and funds can run out well before November. Homeowners in the DFW area are strongly encouraged to apply as early in the year as possible to maximize their chances of receiving the full rebate amount.

The AEP Texas SMART Source Solar PV Program provides cash rebates to customers in the AEP Texas North and Central service territories (covering much of West and South Texas) who install a qualifying grid-tied solar PV system. The maximum rebate is $3,000, and the program supports systems up to 30 kW in size.

Rebates are tiered based on system size, with the per-watt incentive decreasing as system size increases. Smaller systems receive the highest per-watt value, with rebate tiers of $2,250, $1,500, and $500 per kWdc depending on the installation size bracket. The total rebate is capped at $3,000 per customer. Systems must be installed by a licensed contractor and meet AEP’s technical requirements to qualify.

As with most utility rebate programs in Texas, funding is limited and available on a first-come, first-served basis. Homeowners in AEP territory should verify current program availability and remaining funds directly with AEP Texas before scheduling an installation, as the program can close early if the annual budget is exhausted.

New Braunfels Utilities (NBU) offers a solar rebate program for residential customers in the New Braunfels, Texas service area. Homeowners can earn a rebate of up to $3,000 for installing a qualifying solar PV system of at least 3 kW. To be eligible, the system must be installed by a participating, NBU-approved contractor, and the homeowner must complete NBU’s solar education course prior to installation.

The rebate amount scales with system size, so larger systems within the qualifying range receive higher rebates up to the $3,000 cap. The program is designed to help offset the upfront cost of going solar and make renewable energy more accessible to NBU customers in the New Braunfels area.

As with other utility rebate programs in Texas, funding is limited and allocated on a first-come, first-served basis. Prospective solar customers should contact NBU directly to confirm current program availability, verify contractor eligibility, and complete the required education course before signing a solar installation contract.

The City of Sunset Valley offers a solar PV rebate of up to $1.00 per watt installed, with a maximum rebate of $3,000 per system (capped at 3,000 watts / 3 kW). This program is available exclusively to residents within the Sunset Valley city limits who install a qualifying solar panel system on their home.

One of the most valuable aspects of this program is that it can be stacked with the Austin Energy $2,500 residential solar rebate, since Sunset Valley is served by Austin Energy. A qualifying homeowner could potentially receive up to $5,500 in combined rebates ($3,000 from Sunset Valley + $2,500 from Austin Energy) before any other incentives are applied, significantly reducing the net cost of a solar installation.

Homeowners should confirm current program availability and eligibility requirements directly with the City of Sunset Valley, as local rebate programs can change or exhaust funding. Installations must typically be completed by a licensed contractor and meet Austin Energy’s interconnection requirements to qualify for both rebates simultaneously.

SMTX Utilities, the municipal electric utility serving San Marcos, Texas, offers a PV Energy Rebate Program for residential customers. The rebate is calculated at $1.00 per watt of installed capacity, with a maximum rebate of $2,500. Additionally, the rebate cannot exceed 50% of the system’s total installed cost, ensuring the program supports a meaningful portion of the investment without over-incentivizing.

To qualify, the solar system must meet SMTX’s technical and interconnection requirements and be installed by a licensed solar contractor. The rebate is paid after installation and inspection, helping to reduce the net upfront cost of going solar for San Marcos homeowners.

Homeowners interested in this program should contact SMTX Utilities directly to confirm current funding availability, review eligibility requirements, and understand the application process before signing a solar installation contract. Like most utility rebate programs, funding is limited and subject to change.

Guadalupe Valley Electric Cooperative (GVEC) offers a $2,000 rebate to its members who install a qualifying backup battery storage system. This incentive is designed to encourage energy resilience among GVEC customers, particularly in the wake of grid reliability concerns in Texas following severe weather events.

The rebate applies to qualifying battery systems that meet GVEC’s technical specifications. Members should confirm which battery brands and models are eligible before purchasing, as not all battery systems may qualify. The rebate is typically paid after installation and inspection by GVEC.

With the expiration of the federal residential battery tax credit (Section 25D) at the end of 2025, utility-level programs like GVEC’s rebate have become even more important for homeowners seeking financial incentives for battery storage. GVEC members in the Guadalupe Valley area should contact the cooperative directly to verify current program terms, funding availability, and the application process.

Bandera Electric Cooperative (BEC) launched its Smart Battery Program in early 2026, offering members a home battery system (Enphase 10C, 20 kWh) with no upfront cost through a monthly lease of $36.99 added to their electric bill. The program provides members with backup power during outages and helps the cooperative manage grid demand during peak periods. Participants must commit to a minimum 10-year term, with an option to extend for an additional 5 years.

BEC also offers a Bring Your Own Battery (BYOB) Program for members who already own or plan to purchase their own qualifying battery storage system. Under the BYOB program, BEC pays members $50 per kW of enrolled battery capacity per year in exchange for permission to dispatch the battery during grid stress events. This provides an ongoing annual income stream for battery owners at no additional cost to the homeowner.

These programs are particularly valuable for BEC members given the expiration of the federal residential battery tax credit. The BYOB annual payment helps offset battery ownership costs over time, while the lease program eliminates the barrier of a large upfront purchase. Contact Bandera Electric Cooperative directly to confirm current enrollment availability and program terms.

El Paso Electric offers a Home Battery Incentive Program that provides qualifying residential customers with financial incentives to install backup battery storage systems. The program offers up to $500 for two batteries under the standard setup, helping to offset the cost of battery installation for eligible homeowners in the El Paso Electric service territory.

The program’s primary purpose is grid resilience — by incentivizing distributed battery storage, El Paso Electric can reduce local strain on the power grid during hot summer days and periods of peak demand, improving reliability for all customers without the need to build costly new infrastructure. Homeowners benefit from backup power during outages in addition to the financial incentive.

Eligibility and specific program terms, including which battery systems qualify, should be confirmed directly with El Paso Electric before purchasing. As with most utility battery programs, funding is limited and program terms may change. Homeowners in the El Paso area are encouraged to contact El Paso Electric early to take advantage of available incentives.

Tesla’s Virtual Power Plant (VPP) Program is available to Powerwall owners in select areas of the Oncor (Dallas-Fort Worth) and CenterPoint (Houston) service territories who use Tesla Electric as their Retail Electric Provider (REP). Enrolled participants receive a $10 per month electric bill credit in exchange for allowing Tesla to remotely discharge their Powerwall battery to help reduce stress on the grid during high-demand periods.

Participation in the VPP program is voluntary and does not significantly impact the homeowner’s backup power availability, as Tesla’s dispatch events are managed to preserve a minimum battery reserve. The program provides a simple, passive income stream for Powerwall owners — $120 per year — with no additional equipment or action required beyond enrollment.

To participate, homeowners must be Tesla Powerwall owners, reside in an eligible Oncor or CenterPoint service area, and sign up for Tesla Electric as their REP. This program is particularly attractive for homeowners who have already invested in a Powerwall and want to maximize their return on investment through ongoing monthly credits, especially now that the federal residential battery tax credit has expired.

The Texas Energy Fund allocates $1.8 billion statewide to strengthen backup power at critical public facilities through a combination of grants and low-interest loans. Funded systems must combine battery storage with solar PV and/or backup generators to qualify under the Backup Power Package Program. This program was created in response to grid reliability concerns following major weather events in Texas.

Eligible facilities include hospitals, water treatment plants, emergency shelters, fire and police stations, communication centers, and other emergency response hubs that serve critical loads. The program is exclusively for public sector entities — private homeowners and businesses are not eligible. Schools, cities, counties, and other governmental bodies may apply for funding to install resilient energy systems at qualifying facilities.

Applications are reviewed on a competitive basis, with priority given to facilities that serve the most critical community functions. Public entities interested in applying should visit the Texas Energy Fund’s official website for current application windows, funding availability, and eligibility requirements, as program details and deadlines are updated regularly.

The USDA’s Rural Energy for America Program (REAP) provides financial assistance to agricultural producers and rural small businesses in Texas to install renewable energy systems, including solar PV and battery storage. Grants can cover up to 50% of total eligible project costs (with a maximum grant of $1 million), while guaranteed loans can cover up to 75% of eligible costs (up to $25 million). Battery storage systems are eligible when paired with qualifying renewable generation such as solar PV.

To qualify, applicants must be either an agricultural producer (farmer, rancher) with at least 50% of gross income from agricultural operations, or a small business located in a rural area (generally communities with fewer than 50,000 residents). The project must be located in a rural area as defined by USDA, and the energy system must be technically feasible and financially viable.

REAP is one of the most significant federal incentive programs available for rural Texas solar and storage projects, particularly for farms and rural businesses that may not benefit from residential programs. Applications are accepted on a rolling basis through the USDA Rural Development Texas State Office. Prospective applicants should contact their local USDA Rural Development office early, as funding is competitive and application preparation can be time-intensive.

TX-PACE (Property Assessed Clean Energy) is a financing mechanism available in select Texas jurisdictions that allows commercial and residential property owners to fund solar PV and battery storage installations through long-term loans repaid via their property tax bill. Because the loan is secured by the property itself rather than the borrower’s credit, interest rates are often lower than traditional financing options, and repayment terms can stretch 10 to 25+ years, significantly reducing monthly payment obligations.

TX-PACE financing is particularly useful for property owners who want to go solar but lack the upfront capital or prefer not to take on a traditional loan. The financing amount can cover 100% of the project cost, including solar panels, inverters, battery storage, installation, and permitting fees. When the property is sold, the PACE obligation can transfer to the new owner along with the property, though this must be disclosed during the sale.

Availability of TX-PACE varies by jurisdiction — not all Texas counties and municipalities have adopted enabling legislation. Property owners should check with their local government or visit the SECO website to determine whether their property is located in a PACE-eligible jurisdiction and to find authorized PACE program administrators operating in their area.

The LoanSTAR (Loans to Save Taxes and Resources) Program, administered by the Texas State Energy Conservation Office (SECO), provides low-interest revolving loans to public entities in Texas for energy-saving projects, including solar PV installations. Eligible borrowers include state agencies, public universities and community colleges, public school districts, local governments, and other publicly owned facilities.

Loan funds can be used to finance the installation of solar panels, energy storage systems, and related equipment at publicly owned buildings and facilities. The program is designed so that energy cost savings generated by the project are sufficient to repay the loan over time, making it a self-funding mechanism for public entities looking to reduce long-term energy costs without burdening their operating budgets.

Interest rates under LoanSTAR are typically well below market rates, making it an attractive financing option for public entities that may not qualify for or wish to use other financing mechanisms. Public entities interested in applying should contact SECO directly at 512-239-1000 to discuss project eligibility, loan terms, and the application process.

Gexa Energy offers an innovative Solar Buyback Plan for Texas homeowners in the deregulated ERCOT market that features no cap on solar export credits, with surplus energy automatically applied to future electric bills. This makes it a strong option for homeowners with larger solar systems who generate significant excess electricity, as there is no ceiling on the credits they can accumulate.

For homeowners with battery storage, Gexa also offers a Battery Benefits Program that provides $50 per month in bill credits for remote battery management participation. Under this program, Gexa can remotely manage the charging and discharging of enrolled batteries to optimize grid performance during peak demand periods. Currently, only Enphase battery inverters are compatible with this program.

Additional features of Gexa’s solar plan include free solar monitoring services. Homeowners interested in Gexa’s programs should compare the total value — including the buyback rate, battery credits, and any plan fees — against other REP solar buyback options available in their area. Plan terms and rates are subject to change, so always review the current Electricity Facts Label (EFL) before enrolling.