Texas Solar Incentives & Rebates Guide 2026

The federal Investment Tax Credit (ITC) allows Texas homeowners to deduct 30% of the total cost of a solar energy system from their federal income taxes. For a typical 6kW system costing $15,720 in Texas, that's a direct tax credit of $4,716. This isn't a deduction — it's a dollar-for-dollar reduction of your tax bill.

The 30% ITC is available through 2032 under the Inflation Reduction Act, then steps down to 26% in 2033 and 22% in 2034. There's no maximum cap on the residential credit. If your tax liability is less than the credit amount, you can roll the remaining credit forward to the next tax year. The system must be installed on your primary or secondary residence, and you must own it (leased systems don't qualify for the homeowner credit).

Texas does not currently offer a state-level solar tax credit. However, Texas homeowners still benefit from the substantial 30% federal ITC, worth $4,716 on a typical 6kW system. Additionally, Austin Energy: $2,500 per residential install; CPS Energy (San Antonio) offers rebates. Even without a state credit, solar is economically attractive in Texas with electricity rates averaging 15.47¢/kWh.

Great news for Texas homeowners: Solar energy systems are exempt from property tax assessments. 100% property tax exemption (must file Form 50-123) Studies show solar adds 3-4% to home values. For a $300,000 home, that's roughly $12,000 in added value — and with Texas's property tax exemption, you save approximately $132 per year in property taxes you'd otherwise owe on that increased value.

Texas does not currently exempt solar equipment from state sales tax. This means you'll pay the applicable sales tax on your solar system purchase. However, the 30% federal ITC and other available incentives more than compensate for this cost in most cases.

Net metering policy: Varies by Utility. No statewide mandate; deregulated market; some REPs offer buyback programs

Net metering policies in Texas vary by utility. Contact your local electric provider to understand the specific buyback rate and any system size limitations that apply to your service territory.

Austin Energy: $2,500 per residential install; CPS Energy (San Antonio) offers rebates

Utility rebates and state programs can change frequently. We recommend checking with your local utility and the Database of State Incentives for Renewables & Efficiency (DSIRE) for the most current programs available in your area.

Texas has a mandatory Renewable Portfolio Standard (RPS) target of 10,000 MW by 2025 (far exceeded). This legally binding target drives continued investment in renewable energy infrastructure and often supports solar-friendly policies like net metering and SREC programs. A strong RPS is generally good news for solar homeowners, as it creates market demand for renewable energy and helps maintain favorable solar policies.