Tyler, TX Solar Panels

Under Texas Tax Code Section 11.27, the added value that a solar energy system contributes to your home is 100% exempt from property taxes. For example, if your solar installation increases your home’s appraised value by $20,000, you pay zero additional property taxes on that amount. With Texas property tax rates averaging 1.8–2.2%, a typical residential solar system can save homeowners in Tyler $400–$640 per year in property taxes.

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. You do not need to re-file annually — the exemption remains in effect as long as the solar system is operational. Battery storage systems installed as part of a solar energy system and used to store solar-generated electricity generally qualify under the same exemption.

Over the 25-year lifetime of a typical system, this exemption can save Texas homeowners between $10,500 and $14,500 in total property taxes. With the federal residential solar tax credit now expired, this statewide exemption is the single most valuable solar incentive available to Tyler homeowners in 2026.

Texas exempts solar energy equipment from the state’s 6.25% sales tax (plus any applicable local sales taxes). This exemption applies at the point of purchase, meaning you pay less upfront when buying solar panels, inverters, mounting hardware, and related components for your installation.

The exemption covers equipment used to produce, store, or distribute solar energy for residential or commercial use. Battery storage systems paired with solar installations are also generally eligible for this exemption. No special application is required — the exemption is applied automatically by the retailer or installer at the time of sale.

For a typical Texas residential solar system costing around $20,000–$25,000, the sales tax exemption can represent an immediate savings of $1,250–$1,560 or more, depending on local tax rates. This is an automatic, hassle-free benefit available to all Texas solar buyers statewide, including residents of Tyler.

Oncor Electric Delivery, which serves Tyler and much of North and East Texas, offers an upfront rebate incentive for residential customers who install a new solar PV system paired with battery storage. Qualifying solar systems must be between 3 kW and 15 kW in size. The rebate amount varies based on system size, panel azimuth (orientation), shading, and other factors, but can reach up to $9,000 for eligible solar-plus-storage installations. For battery storage specifically, Oncor offers approximately $300 per kWh of installed storage capacity, meaning a standard home battery can qualify for over $3,000 in incentives on its own.

The program is designed to reduce peak grid demand and improve grid resilience across the Oncor service territory. Battery storage is essentially required to unlock the full rebate value. The program typically runs annually from February through November 30, or until funding is exhausted — whichever comes first. The 2026 program is scheduled to close November 30, 2026.

To apply, contact Oncor directly or work with a qualified solar installer familiar with the Oncor rebate process. Because rebate amounts are not publicly fixed and depend on system-specific factors, getting a detailed quote from an Oncor-approved installer is the best first step. This rebate can be combined with the Texas property tax exemption for significant overall savings.

Texas does not have a statewide mandatory net metering law. Instead, homeowners with solar panels in the deregulated ERCOT market (covering approximately 85% of the state) must select a Retail Electric Provider (REP) that offers a solar buyback plan in order to receive compensation for excess electricity exported to the grid. Buyback rates vary widely by provider, ranging from approximately $0.037/kWh to retail-rate equivalents, depending on the plan and territory. The Power to Choose marketplace (powertochoose.org), operated by the Public Utility Commission of Texas, allows homeowners to search for and compare available solar buyback plans by ZIP code.

Key buyback options vary by utility territory: In the Oncor territory that serves Tyler, some REPs such as TXU offer retail-rate credits (effectively 1:1), while Oncor’s base buyback rate is approximately 3.7¢/kWh — making battery storage pairing highly beneficial.

Homeowners in Tyler should carefully evaluate buyback rates when selecting a REP, as the rate significantly impacts the financial return on a solar investment — especially in areas with lower buyback rates where pairing solar with battery storage can maximize self-consumption and reduce reliance on low-rate grid exports.

Tesla Electric offers a Virtual Power Plant (VPP) program for Powerwall battery owners in certain areas of the Oncor (which serves Tyler) and CenterPoint (Houston) service territories. Enrolled homeowners receive a $10 per month electric bill credit in exchange for allowing Tesla to occasionally discharge their Powerwall to the grid during periods of peak demand or grid stress. This helps stabilize the Texas grid while providing homeowners with a modest ongoing financial benefit.

To participate, homeowners must use Tesla Electric as their Retail Electric Provider (REP) and have a Powerwall installed and connected to the Tesla app. Tesla manages all dispatch decisions automatically — homeowners do not need to take any action during grid events. The program is designed to be minimally disruptive to the homeowner’s energy usage and battery reserve levels.

The VPP program is an emerging opportunity that adds incremental value to a Powerwall investment beyond energy bill savings. Eligibility is currently limited to specific service territories, so Powerwall owners should check the Tesla website or app to confirm availability at their address and review current program terms before enrolling.