- Texas installed nearly 10GW of solar energy in the last two years, more than most states have in total.
- Homeowners in Texas can save over $25,000 or more over 25 years by installing a 6kW solar system.
- Texas offers federal incentives, such as a 30% tax credit, as well as state rebates and credits for solar panel installations.
- Texas has voluntary renewable portfolio standards and plans to build over 40GW of solar in the next 5 years.
- Texans have access to solar leasing as an option for clean energy.
In the last two years, Texas installed nearly 10GW of solar energy. This is more than most states have in total. With huge support to make the switch, homeowners can save thousands with solar panels in Texas.
However, the Lone Star State doesn’t mandate many programs through legislation. Therefore, it’s up to homeowners to find benefits within their city. In this article, we explain what opportunities exist for solar panels in Texas. Let’s get into it.
How to Save Money on Solar Panels in Texas: Overview
Solar panels in Texas might cost a lot up front, but the payout is just as big. With incredible peak sun and high electricity bills to offset, homeowners that install a 6kW system could save over $25,000 or more over 25 years (the lifespan of an array).
Additionally, the Lone Star State has plenty of resources to invest in renewable infrastructure. This means homeowners receive incredible incentives to purchase a home solar system. From federal credits to massive rebates, Texans can cut the cost of an installation by thousands. Let’s take a look at what’s available.
Solar Panels in Texas: Federal Incentive
When purchasing solar panels in Texas, it’s imperative to utilize the federal solar tax credit. This program provides 30% back on all solar purchases, including labor, equipment, and sales tax. Texans that install a 6kW system could lower their costs by over $5,000, which comes in the form of an income tax credit.
However, you must know about the qualifications required to take advantage of this program. Most importantly, you need to own your solar array, either by purchasing it outright or taking a loan. Additionally, the system needs to be installed where you live and all the equipment must be new.
Other guides may tell you that this program ended in 2021. However, the federal government updated it in early 2023, offering better incentives for a longer duration. Now, you can receive this credit until the end of 2032. It drops to 26% until 2034 and 22% until 2035. After that, the program could terminate unless it’s extended again.
Texas’ State Credits and Rebates
One of the best ways to facilitate new solar panel systems is through financial incentives, such as credits and rebates. These programs help with the hefty, upfront cost of an array, making them more accessible.
Fortunately, Texas offers a wide range of equipment rebates in many cities. They range from a few hundred dollars to as much as $8,500 depending on where you live. The applicable cities and utilities include:
- Austin Energy
- Texas Gas Service
- CPS Energy
- Denton Municipal Electric
- CenterPoint Energy
- Oncor Electric Delivery
- New Braunfels Utilities
- AEP Texas Central Company
- AEP Texas North Company
- City of Sunset Valley
- City of San Marcos
- Garland Power & Light
After taking advantage of rebates, homeowners have a continuous option to save even more on their electricity bills. By signing up for net metering in their city, Texans can sell excess solar energy back to their utility company for a credit. While the state does not require it, we’re seeing the regulation more frequently. Check with your utility company for net metering options.
Solar Panels in Texas: Government Regulations
Homeowners can find incentives for solar panels in Texas with little effort. We’re curious about this due to the Lone Star State’s voluntary renewable portfolio standards (RPS).
Typically, we look at a state’s RPS to gather insights about its desire to invest in future clean energy. However, Texas doesn’t push utilities to meet a goal. And it’s mainly due to the accessibility of equipment.
The Lone Star State has a voluntary objective of 10,000MW by 2025. However, this number was met all the way back in 2009. And while this meant there was no more pressure to keep building clean energy sources, the state kept going. Texas has plans to build over 40GW of solar in the next 5 years. That’s an incredible amount of solar without any major changes in legislation.
So while homeowners have little state-level support, they’re reaping major benefits. However, this doesn’t mean Texas has taken a step out of the issue.
The Lone Star State helps its residents by providing both sales and property tax exemptions. These are the easiest regulations that a state government can implement to facilitate solar panels for homeowners.
With both exemptions in place, Texans save 6.25% on installation costs and about 4% on property taxes for the lifespan of their system.
Should Texans Lease Solar?
In many states, homeowners can opt to lease a solar panel system to save money upfront. While this option disqualifies the array from incentives (such as the federal solar tax credit), it can provide an avenue for clean energy in situations where an array can’t be bought.
Fortunately, Texans have access to solar leasing. And with huge power offsets, they can earn a nice return on their utility bill, even after the lease payments. If you can’t afford a solar panel system, it’s worth your time to check out this avenue.
Solar Panels in Texas: Incentive Summary
|Federal Tax Incentive||30% credit|
|Texas Tax Credits / Rebates||None / city and utility rebates|
|Net Metering||City delegated net metering|
|Renewable Portfolio Standard||10GW by 2025 (already met)|
|Property Tax Exemption||100%|
|Sales Tax Exemption||100%|
|Performance Payment Program||Utility performance payments|
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