Texas Solar Incentives, Tax Credits and Rebates

Residential solar panel incentives in Texas

The 30% federal solar tax credit expired at the end of 2025, but Texas homeowners may still qualify for federal programs, local rebates and a statewide property tax exemption that prevents solar panels from increasing their property tax bill.

Solar panel rebates in Texas

• Austin Energy offers a $4,000 rebate for installing a qualifying solar panel system and completing a solar education course, plus ongoing bill credits at its Value of Solar rate of 9.91 cents per kilowatt-hour for the energy the system produces.
• Oncor has a residential solar program that offers financial incentives to customers who install solar panels with an energy storage backup system.
• New Braunfels Utilities has solar rebates of up to $3,000.
• AEP Texas North and AEP Texas Central both offer rebate programs for residential and commercial customers who install solar systems. Maximum rebate amounts vary by system size.
• The City of Sunset Valley offers a solar panel rebate program for residents of $1 per watt, up to $3,000.
• SMTX Utilities in San Marcos offers solar panel rebates of up to $2,500 for residential customers and $5,000 for commercial customers.

Net metering in Texas

Net metering lets you earn bill credits for excess solar electricity sent to the grid. You can then use those credits to offset the cost of electricity you draw when your panels aren’t producing enough power, such as at night or on cloudy days.

Texas does not require utilities to offer net metering statewide.

Unlike many states, Texas doesn’t have a statewide net metering policy. Programs are offered by local utilities and retail electricity providers, so eligibility, credit rates and rollover rules vary widely.

“Because the grid is deregulated, homeowners sign up with a retail provider for energy,” Eric Bramlett, a real estate agent in Austin, explained. “Rates can vary not only by provider, but also between plans from the same provider.”

One solar customer in Texas described a plan that credited exported electricity at the same rate they paid: “If I generated 200 and consumed 200, my net usage was zero, and my bill was essentially zero.”

Net metering vs. solar buyback plans

Traditional net metering may credit exported electricity at the same rate you pay for power, though some utilities use a lower fixed rate.

Solar buyback plans are more common in deregulated parts of Texas. These plans are offered by retail electricity providers and often pay less for exported solar power than they charge for electricity from the grid.

For example, Texas solar customer Jerry previously received the same rate for the power he used and exported. After renewing, he paid 21 cents per kilowatt-hour but received only 10 cents for exported electricity, plus a $40 monthly utility fee.

His experience shows why it is important to compare plan terms carefully. Buyback rates, fees and credit policies can vary widely and may change when your contract renews.

Key takeaway

Unlike traditional one-to-one net metering, Texas solar buyback plans may credit exported electricity at a different rate than the rate charged for electricity from the grid.

Federal solar programs

The 30% federal solar tax credit expired at the end of 2025, but a few standing federal programs can still help homeowners here afford solar and other home energy upgrades:

• Energy Efficient Mortgages: FHA-backed Energy Efficient Mortgages let eligible homebuyers and homeowners roll the cost of solar panels and other energy improvements into their home loan instead of paying for them separately.
• Fannie Mae Green Financing: Fannie Mae offers green financing to help multifamily property owners cut utility costs through solar and other efficiency upgrades. This is less relevant to single-family Texas homeowners, but may apply to larger residential properties.

How much are solar panels in Texas?

Solar panel costs in Texas before any financial incentives typically range from $10,957 to $21,914. On the high end, Michael in Humble told us he spent $75,000 going solar.

Unsurprisingly, a larger system is more expensive. The typical system size for solar systems in Texas is 7.1 kW. Depending on your current energy usage, you might need a bigger or smaller system. The table below shows average solar panel cost by system size in Texas and select cities in the Lone Star State.

How much Texans can save with solar panels

On average, Texas homeowners with solar panels avoid $80,284 in utility costs over 25 years. Many solar customers in Texas see significantly lower utility bills. For example, Don in San Antonio, Texas, said their monthly electric bill went down from around $250 to $80.

Your current electric bill is the starting point for assessing the financial benefits of transitioning to solar energy. Knowing your average energy consumption helps determine the size and capacity of the solar system you need. Once you know this, you can figure out potential savings and how long it should take for your solar installation to pay for itself. In Texas, solar panels usually pay for themselves within 8.67 years.

Find solar companies in Texas

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Texas’s top solar companies to learn more.

FAQ

Bottom line

The ConsumerAffairs Research Team conducted an in-depth analysis to determine the average costs of going solar and incentives in other states. Solar can be worthwhile for some Texas homeowners, but the financial return depends heavily on installation costs, electricity usage, local incentives and the buyback plan available in their area. The table below depicts solar costs vs. savings in Texas and nearby states.