Dallas, TX Solar Panels

Texas offers a property tax exemption for solar and wind-powered energy devices installed on your property. This exemption prevents your local appraisal district from adding the value of your solar energy system to your property’s assessed value for tax purposes. Without this exemption, installing solar panels could increase your home’s appraised value and result in higher annual property taxes. With the exemption in place, you pay property taxes as if the solar system wasn’t there, providing ongoing savings throughout the life of your system.

To qualify for this exemption, you must own the solar energy device and it must be installed on property you own in Texas. You’ll need to apply with your county appraisal district using Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices). The general deadline for filing exemption applications is before May 1st, though you should contact your local appraisal district to confirm specific deadlines and requirements. Since property tax is assessed and administered locally in Texas rather than at the state level, the actual tax savings will vary depending on your property’s location and local tax rates. This exemption remains in effect as long as you own the qualifying solar equipment, providing year-after-year property tax savings.

Net metering and net billing policies in Texas vary significantly by utility provider, as the state does not have a statewide net metering requirement. Instead, each utility company sets its own compensation structure for solar energy exported to the grid. Most Texas utilities offer either net billing (where exports are credited at a lower rate than retail electricity prices) or monthly net metering (where production and consumption are netted on a 1:1 basis each month).

The financial benefit depends on your specific utility provider. For example, customers in ERCOT territories served by utilities like Oncor, CenterPoint, or AEP Texas typically work with retail energy providers like Shell Energy, which credits exported solar at 7 cents per kWh (as of April 2024). Municipal utilities and cooperatives have different structures: Austin Energy uses a “Value of Solar” rate of 9.91 cents per kWh for all production, CPS Energy in San Antonio offers monthly netting with seasonal credit rates, and Grayson Collin Electric Cooperative provides true 1:1 net metering with credits that roll over year to year. Export credit rates at most utilities range from 3 to 8 cents per kWh, which is lower than typical retail electricity rates of 10-15 cents per kWh.

Eligibility typically requires homeowners to have an interconnection agreement with their utility and, in deregulated areas, enrollment with an approved retail energy provider. Some utilities charge additional monthly fees for solar customers, ranging from $10 to $30 per month, while others have minimum monthly bill requirements. Most utilities settle accounts monthly, meaning any excess credits beyond what you consume are either forfeited, paid out at the avoided cost rate, or rolled over at a reduced value. Notable exceptions include Grayson Collin Electric Cooperative, which allows credits to carry over indefinitely, and several utilities that forfeit unused credits each December. Homeowners should carefully review their specific utility’s policy and consider whether additional monthly fees or credit forfeiture rules impact their solar investment’s value.