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Texas solar incentives in 2026 include a 100% property tax exemption on the value added by solar panels, utility-specific rebates, and solar buyback programs. While the 30% federal residential solar tax credit expired at the end of 2025 for homeowner-owned systems, leases and PPAs can still pass commercial tax savings through to homeowners, and the remaining incentives can significantly improve your long-term energy savings.
If you’re considering installing solar panels in Texas, understanding the available incentives can help you maximize your return on investment. Programs such as the federal tax credit, local utility rebates, and solar buyback plans make switching to solar more affordable than many homeowners realize.
Thinking about going solar? Our team at Big Texan Solar can help you evaluate available incentives, estimate your potential savings, and design a solar system tailored to your property.
Solar energy adoption continues to grow across Texas, thanks to the state’s strong sunlight and the financial incentives that make solar systems more accessible. However, many property owners miss out on potential savings simply because they are unaware of which programs apply to them.
The Solar Investment Tax Credit (ITC) was for years the most significant financial incentive for solar installations in Texas, letting homeowners deduct 30% of installation costs — panels, inverters, mounting equipment, batteries, and labor — from their federal income taxes.
That residential credit (Section 25D) expired on December 31, 2025, for homeowner-owned systems. Homeowners who had their systems installed and operational before that deadline were the last to qualify, and those who claimed it can still carry unused credit forward to future tax years.
There is still a path to federal savings in 2026: third-party-owned systems — solar leases and power purchase agreements (PPAs) — remain eligible for the commercial ITC through 2027. The leasing company claims the credit and typically passes the savings through as lower monthly rates, which has made these arrangements considerably more popular since the residential credit ended.
Texas does not currently offer a statewide solar rebate or tax credit. However, the state provides a valuable property tax exemption for renewable energy systems.
When you install solar panels, your home value may increase. Normally, this would raise your property taxes, but Texas law allows homeowners to exclude the value added by solar panels from property tax calculations.
This exemption applies to both residential and commercial properties, and it typically lasts for the life of the solar system. In most cases, you simply submit an application to your county appraisal district, and many solar installers help handle this process.
Some utilities in Texas offer solar rebates or production incentives, although programs vary depending on your location.
Utilities such as Austin Energy and AEP Texas have offered rebate programs in the past, while several retail electricity providers offer solar buyback plans that credit customers for excess power sent to the grid.
Examples of providers offering solar buyback plans include companies such as Chariot Energy, Gexa Energy, and Reliant Energy. These plans allow you to receive credits on your electricity bill when your solar system produces more power than your home consumes.
Because many rebate programs operate with limited funding and may change annually, it is important to verify the current incentives available in your area before installation.
Texas does not require utilities to provide traditional net metering, so solar compensation policies vary by provider.
Instead, many electricity providers offer solar buyback programs, which compensate you for the excess electricity your system exports to the grid. Depending on the plan, you may receive credits close to the retail electricity rate or a lower wholesale rate.
In deregulated electricity markets, you may also have the option to choose a retail provider with a solar-friendly buyback plan. Our complete guide to how net metering works in Texas compares buyback structures and explains how the credits show up on your bill.
Businesses installing solar systems in Texas can access additional tax advantages beyond the federal tax credit.
Commercial solar installations qualify for the Modified Accelerated Cost Recovery System (MACRS), allowing businesses to depreciate the solar equipment over five years. This accelerated depreciation can significantly reduce taxable income and improve the financial return on a commercial solar investment.
Many businesses may also qualify for bonus depreciation, allowing a larger portion of the system cost to be deducted earlier. For a full look at the business case, see how commercial solar panels can cut business operating costs.
Your financing method affects which incentives you can claim. If you purchase your solar system outright or use a solar loan, you retain ownership and can claim the federal tax credit along with other incentives. Solar loans allow you to spread the installation cost over time while still benefiting from tax savings.
With solar leases or power purchase agreements (PPAs), a third-party company owns the system and typically receives the tax incentives instead.
Texas law protects your right to install solar panels even if you live in a neighborhood governed by a homeowners’ association.
Under Texas Property Code Section 202.010, HOAs generally cannot prohibit solar installations, although they may enforce reasonable guidelines regarding panel placement or visibility.
These restrictions cannot significantly increase installation costs or reduce system efficiency, ensuring homeowners still have practical access to solar energy. Our guide on whether HOAs can restrict solar panels in Texas walks through the approval process and what to do if your HOA pushes back.
Although Texas does not offer statewide solar rebates, homeowners and businesses can still benefit from several valuable incentives.
Texas property tax exemptions, utility rebate or buyback programs, and pass-through savings from leases and PPAs can significantly lower your installation cost and improve your long-term energy savings. Incentives are one chapter of our complete homeowner’s guide to home solar panels in Texas, which also covers costs, sizing, and permits.
If you want to understand how these incentives apply to your property, our team at Big Texan Solar can help you evaluate your options and design a solar system that maximizes your savings.
Contact us today to schedule a solar consultation and see how much you could save with solar energy in Texas.
Renters generally cannot claim the federal solar tax credit because the incentive is only available to property owners who purchase and install the solar system.
You receive the federal solar tax credit when you file your tax return for the year your solar system becomes operational.
Battery storage qualified for the residential federal tax credit through the end of 2025. In 2026, batteries installed under third-party-owned arrangements may still benefit from commercial credits claimed by the provider.
The federal tax credit stays with the original homeowner who claimed it, but the solar system itself can increase your home’s resale value.
There are no income limits for the federal solar tax credit, although you must have sufficient federal tax liability to use the credit.
Yes — the 30% federal residential solar tax credit expired December 31, 2025. The commercial ITC for third-party-owned systems runs through 2027, and utility rebate programs typically operate year to year based on funding, so verify current availability before installation.
Yes, you can typically combine the federal tax credit with property tax exemptions, local utility incentives, and solar buyback programs.
You can verify current incentives through your utility provider, the DSIRE incentive database, or a qualified solar installer.