Ultimate Guide to Solar Incentives, Tax Credits & Rebates in Texas

Admit it. Living in Texas is pretty grand. The Lone Star State is home to the best foods, best football games, the most soul-inspiring country music, and enough state pride to last a lifetime. As if all those factors weren’t reason enough to brag about how lucky we are to live here, now you can add solar incentives to the list.

Tax credits and rebates for installing solar panels in Texas

1. Federal Tax Credit

Since 2015, the federal government has been providing renewable energy tax credits for homeowners who install solar energy systems in the property they use as their residence. It doesn’t have to be a primary residence. Living in it for a portion of the year will suffice.

2. Investment Tax Credit

Also known as the ITC, the investment tax credit allows you to deduct 30% of the cost of the solar panels regardless of whether the installation was done on a residential or commercial property.

3. No Cap to the Federal Credit

The cost of solar panels varies on several factors: the materials, the quality, the number of panels that are necessary to cover your household’s energy needs. However, even if you were to make a substantial investment, rest assured, there will be no cap on the amount you can use as tax credit when filing your federal taxes.

4. Federal Credit Rollovers

Depending on the size of your home and the type of solar panels you install, 30% of the cost of the system may exceed the amount of your tax liability. Then what? Do you get a rebate? No. However, you still get to use your credit, and the amount that exceeds your liability can be rolled over to the next tax year.

5. Texas Solar Rebate Programs

Although there isn’t a statewide rebate program, local governments and some utility companies do offer them as incentives to go green. Austin EnergyCity of Sunset ValleyGarland Power and LightGuadalupe Valley Electric Cooperative, and CPS Energy all offer rebates for homeowners.

6. Texas Net Metering Credits

When solar panels are connected to a power grid, any unused power generated by the panels are transferred into the grid. Many Texas utility companies credit owners for that energy surplus. El Paso ElectricCity of BrenhamGreen Mountain Energy, and CPS Energy all offer these credits.

7. Property Taxes Won’t Increase

Property taxes are calculated based on your property’s value. While it’s true that installing solar panels may increase that value, the Texas Property Tax Code allows an exemption of 100% of the value’s increased when such boost is based on the installation of solar or wind-powered energy.

Do keep in mind that all of these benefits only apply to homeowners who actually own the panels (some contractors allow you to lease them. If that is what you opt for, the owner from whom you leased the panels will actually get the credits).

Also, if you have one of those annoying Homeowners Associations that create a fuss for simply breathing, be aware that while HOAs may regulate where to install solar panels, or where on your roof to install them, they cannot actually prohibit you from installing solar energy.

Learn more about solar energy panels with the help of Allied Siding & Windows

If you’re a Texas resident and you’ve been thinking about installing solar energy panels, don’t hesitate to contact Allied Siding & Windows! Contact us for more information about our services or stop by one of our showrooms in Austin, Dallas, or Houston!