Texas Solar Incentives at a Glance
Avg Cost per Watt
$2.60
6 kW System Cost
$15,600
Avg Electricity Rate
$0.14/kWh
Payback Period
9-12 years
25-Year Savings
$28,000-$42,000
Total Installations
680,000+
| State Tax Credit | No state tax credit |
| Net Metering | Varies by utility (no statewide mandate) |
| Property Tax Exemption | Yes |
| Sales Tax Exemption | No |
If you are considering going solar in Texas, understanding the full range of available incentives is essential to maximizing your return on investment. This guide covers every Texas solar incentive available in 2026 -- from state tax credits and utility rebates to net metering policies and tax exemptions -- so you can make an informed decision before signing a contract.
Federal Tax Credit No Longer Available
The federal residential solar tax credit (ITC) under Section 25D expired on December 31, 2025. It is no longer available for new residential solar installations in 2026. This guide focuses exclusively on Texas state and local incentives that are still available to help reduce your solar costs.
Texas State Tax Credits and Rebates
Texas does not offer a state solar tax credit. However, several local utility rebate programs partially offset this gap, and the property tax exemption provides long-term value.
Net Metering in Texas
Texas Net Metering Policy: Varies by utility (no statewide mandate)
Texas does not have a statewide net metering law. Policies vary dramatically by utility and retail electricity provider. Some REPs (retail electricity providers) in the deregulated ERCOT market offer buyback plans, though rates vary from $0.04/kWh to near-retail. Municipal utilities like Austin Energy and CPS Energy (San Antonio) offer their own solar buyback programs. Always check with your specific provider before installing.
Net metering is one of the most important factors in your solar ROI. It determines how much you are credited for excess energy your panels send back to the grid. In Texas, the net metering landscape directly affects your payback period and 25-year savings projections.
Property and Sales Tax Exemptions
Property Tax Exemption
Yes
Texas Tax Code Section 11.27 provides a 100% property tax exemption for the appraised value added by a solar energy device. This means your property taxes will not increase due to your solar installation.
Sales Tax Exemption
No
Texas does not exempt solar equipment from sales tax. The state sales tax rate is 6.25%, plus local taxes up to 2%, for a combined rate as high as 8.25%.
Tax exemptions reduce the total cost of going solar and provide ongoing savings. A property tax exemption means you add home value without increasing your tax bill. A sales tax exemption reduces the upfront purchase price. Together, these exemptions can save Texas homeowners hundreds to thousands of dollars.
Utility Rebate Programs in Texas
Beyond state-level incentives, many Texas utilities offer their own solar rebate and incentive programs. These can significantly reduce your out-of-pocket costs or provide ongoing production-based income.
Austin Energy Value of Solar Tariff
Austin Energy credits solar customers at a value-of-solar rate (approximately $0.097/kWh in 2026). Customers are also eligible for a $2,500 rebate on solar installations and additional incentives for battery storage.
CPS Energy (San Antonio) Solar Rebate
CPS Energy offers a rooftop solar rebate and a solar buyback program. The utility's SolarHost program also allows customers without suitable roofs to participate in community solar.
Oncor Solar Programs
Oncor, the largest transmission and distribution utility in Texas, has periodically offered solar rebate programs. Check current availability as programs may have limited funding.
Texas leads the nation in utility-scale solar capacity and is rapidly growing its rooftop solar market. The state's deregulated electricity market in ERCOT areas means homeowners can shop for REPs that offer favorable solar buyback rates. Community solar programs are expanding, particularly through municipal utilities.
Solar Cost and Savings in Texas
| Metric | Texas Average |
|---|---|
| Cost per watt (before incentives) | $2.60 |
| 6 kW system cost (before incentives) | $15,600 |
| Average electricity rate | $0.14/kWh |
| Estimated payback period | 9-12 years |
| Estimated 25-year savings | $28,000-$42,000 |
| Total installations statewide | 680,000+ |
These figures represent statewide averages. Your actual costs and savings will depend on your specific location, roof characteristics, electricity usage, utility rate plan, and which incentives you qualify for. We strongly recommend getting at least three quotes from licensed installers to compare pricing for your specific situation.
For a detailed breakdown of solar costs across all 50 states, see: Solar Panel Cost by State (2026).
Is Solar Worth It in Texas?
Texas has relatively low electricity rates compared to coastal states, which extends the payback period. However, the state's abundant sunshine (averaging 4.5-5.5 peak sun hours daily), 100% property tax exemption, and available utility rebates in major metro areas still make solar a worthwhile investment. Homeowners in Austin and San Antonio benefit from particularly strong local programs.
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Get Your Free Texas Solar Quote →Frequently Asked Questions
Does Texas have net metering?
Texas does not have a statewide net metering mandate. In the deregulated ERCOT market (covering most of the state), your solar buyback rate depends on your retail electricity provider (REP). Some REPs offer competitive buyback rates, while others offer minimal credits. Municipal utilities like Austin Energy and CPS Energy have their own solar buyback programs. Shop around for the best REP solar plan.
What solar rebates are available in Texas?
The main solar rebates in Texas come from local utilities rather than the state government. Austin Energy offers a $2,500 solar rebate. CPS Energy in San Antonio has its own rebate program. Oncor has periodically offered rebates. The Texas property tax exemption (100% of added solar value) is available statewide and provides ongoing savings.
How much does solar cost in Texas in 2026?
The average cost of a 6 kW solar system in Texas is approximately $15,600 ($2.60 per watt) before incentives. Texas benefits from a competitive installer market and lower labor costs compared to coastal states. Get multiple quotes to ensure you are getting a fair price.
Is solar worth it in Texas with low electricity rates?
Solar can still be worth it in Texas despite lower electricity rates, especially if you are in an area with strong utility programs (Austin, San Antonio) or can find a REP with competitive solar buyback rates. The 100% property tax exemption and abundant sunshine help offset the longer payback period. Payback typically ranges from 9-12 years.
Can I sell excess solar power in Texas?
Yes, but the rate you receive depends on your electricity provider. In the deregulated ERCOT market, your REP determines the buyback rate, which can range from wholesale prices ($0.04-$0.06/kWh) to near-retail rates. In municipal utility areas, programs like Austin Energy's Value of Solar Tariff provide more predictable credits. Always confirm your buyback rate before installing.
Learn More About Solar Incentives and Costs
Explore our other comprehensive solar guides to make the most informed decision: