Austin, TX 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 — including residents of Austin.

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 Austin, the rules differ from the deregulated market. 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.

Because buyback rates and plan terms change frequently, it is critical to compare solar buyback options before or shortly after installing your system. Choosing the right plan can significantly impact your solar payback period, so always verify current rates directly with Austin Energy before signing.

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.

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 in Austin 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.

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 in Austin 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 in Austin 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.