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Guide 03

Solar Tax Credits & Incentives: Are You Eligible?

That changes the math but does not eliminate incentives entirely. Texas property-tax protection and local utility programs still matter. Know what applies, verify the details, and do not let outdated claims drive your decision.

Talk to a Solar ProSee how the math works
Snapshot
Focus
Credits and exemptions
Reading time
10 min
Primary risk
Outdated program assumptions

Federal Solar Investment Tax Credit (ITC)

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The federal ITC provides a tax credit of 26% of the cost of a solar system installed on a home or business. This credit is available through the end of 2022, after which it will gradually decrease over the following years.

State and Local Rebates

Many states and local municipalities offer rebates and incentives for solar installations. Availability and amounts can vary widely depending on your location.

Net Metering

Net metering allows homeowners and businesses to receive credits on their utility bills for excess solar energy that they generate and send back to the grid, providing significant savings over time.

Property Tax Exemptions

Some states offer property tax exemptions for solar installations, reducing the overall cost of the solar system and making it more affordable.

Sales Tax Exemptions

Certain states offer sales tax exemptions for solar installations, helping to reduce the upfront cost of the solar system.

Conclusion

The availability and amount of tax credits and incentives for solar installations vary depending on your location and solar system details. Consult with a reputable solar provider or tax professional to determine your eligibility for these incentives and how they may affect your solar system's overall cost.

The incentives that still apply in Texas

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Texas property-tax exemption for solar and wind

Under Texas Tax Code Section 11.27, residential solar energy devices are exempt from property tax assessment. That means installing a solar system will not increase your property tax bill — even though it increases your home's market value. In Travis County, where effective property tax rates run around 1.5 to 1.8 percent, that exemption saves homeowners hundreds per year. Over the life of the system, that is meaningful.

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Local utility programs and rebates

Some Texas utilities and electric co-ops offer additional incentives — performance-based credits, rebates, or favorable export rates. But program details change. Austin Energy has adjusted its Value of Solar rate multiple times. Co-op incentive programs have budgets that run out. Any quote that relies on a local rebate should cite the specific program name, current terms, and expiration date. If it does not, ask.

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No state income tax means no state solar credit

Texas does not have a state income tax, which means there is no state-level solar tax credit. Some solar marketing implies a "state incentive" by referencing the property-tax exemption or local utility programs. Those are real, but they are not a state tax credit. If a proposal mentions a state incentive, ask exactly what it is and verify independently.

How to verify incentive claims before signing anything

1
Check whether the quote explains eligibility clearly

A credible proposal should state what each incentive is, who qualifies, what the dollar amount or percentage is, and what assumptions it is making. If the quote just shows you a lower net number without explaining how it got there, ask for the math. Local programs are where things get murky.

2
Look for current source material on local programs

If a local utility program is mentioned, you should be able to find the current terms on that utility's website. If the installer's information does not match what the utility publishes — or if the utility page has not been updated recently — treat the incentive as unverified until you can confirm it directly.

3
Watch for quotes using outdated incentive math

If a proposal still includes it in the savings math, the numbers are wrong. Ask for an updated quote that reflects current incentives only.

4
Verify each incentive independently before stacking them

Multiple incentives can sometimes stack, but eligibility, timing, and program rules all matter. The Texas property-tax exemption is codified in state law and reliable. Local utility programs are variable. Verify each piece on its own before letting the combined savings number drive the decision.

Incentive questions that need current answers

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