Katy, 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 only pay property taxes on your home’s value 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 is before May 1st, though you should contact your local appraisal district to confirm specific requirements and timing. This exemption applies to all local taxing units in Texas, including school districts, cities, and counties. Since property tax rates vary by location in Texas, your actual savings will depend on your local tax rate and the added value your solar system would have contributed to your property assessment.

Net metering and net billing policies in Texas vary significantly by utility provider, as the state’s deregulated energy market means different rules apply depending on your location and electricity provider. Unlike traditional net metering where excess solar energy is credited at full retail rates, most Texas utilities now offer net billing programs that credit exported solar energy at lower wholesale rates, typically ranging from 3 to 8 cents per kilowatt-hour. Some utilities like Grayson Collin Electric Cooperative still offer true 1:1 net metering where credits carry over indefinitely, while others like CPS Energy and Austin Energy have unique compensation structures.

The financial benefit depends entirely on your utility company. For example, customers in areas served by Shell Energy’s Buyback Plan (including Oncor, CenterPoint, AEP Texas, and TNMP) receive 7 cents per kWh for exported energy, with credits rolling over monthly until December when unused credits are forfeited. Municipal utilities and cooperatives have their own programs—Austin Energy uses a “Value of Solar” rate of 9.91 cents per kWh, while cooperatives like Pedernales and Bluebonnet credit exports at approximately 6 cents per kWh with monthly settlement. Most programs settle monthly, meaning excess credits don’t carry forward, though some providers allow rollover until an annual forfeiture date. Additional fees are common, such as Shell Energy’s $4.95 monthly charge or CoServ’s $15 monthly distributed generation fee.

Eligibility typically requires installing an approved solar system and enrolling in your utility’s solar program, though specific requirements vary by provider. In deregulated areas connected to ERCOT, you’ll need to select a Retail Energy Provider (REP) that offers solar compensation—not all REPs provide favorable solar terms. There are no statewide deadlines, but compensation rates can change annually or seasonally based on wholesale energy costs. Homeowners should carefully compare their utility’s specific program terms, as the difference between net metering and net billing can significantly impact your solar savings, and understanding whether credits roll over or expire is crucial for maximizing your investment’s value.