1. Homeowners
  2. Going Solar
  3. Best Solar Companies
  4. Texas solar incentives, tax credits & rebates

Texas solar incentives, tax credits and rebates

Resources for going solar in 2023

Author pictureAuthor picture
Author picture
Written by
Author picture
Edited by
Freedom Solar Power
Attaching a solar panel on the roof

Texas is a great state to go solar. Even though there are no statewide rebate programs, you can find many different local and regional financial incentives. You can also take advantage of a 100% property tax exemption on any value solar panels add to your house.

Key insights

  • The average federal tax credit value is $9,280 in Texas.
  • You can also take advantage of solar tax breaks, local rebates and loan programs.
  • Estimated 25-year savings are $21,350 with solar panels.

Solar incentives in Texas

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Texas. If you install a residential solar panel system by the end of 2032, you can deduct 30% of the system’s total cost — including equipment, labor and permits — from your federal taxes. For example, for a $20,000 system, you can get a $6,000 credit to the amount of federal taxes you owe.

The ITC drops to 26% in 2033 and 22% in 2034.

A solar customer, Aria in Prosper, told ConsumerAffairs that the tax incentive was “one of the biggest selling points” of going solar. However, they pointed out that if you don't qualify because of other tax benefits, the deal is somewhat deceiving.

It’s important to note that the solar tax credit is not a rebate or refund. The credit goes toward the amount you owe in taxes. It applies when you file federal taxes in the year your solar panel system becomes operational. You won’t get a check in the mail.

The credit is also nonrefundable, so you won’t get a refund if your credit exceeds the amount you owe in federal taxes. The unused portion of your credit carries forward instead.

» MUST-KNOW: The tax benefits of owning a home: deductions and secrets

Regional solar incentives

You also might be able to take advantage of local and regional solar incentives throughout the state. For instance, Alex in Austin took advantage of the tax credit and got rebates from Freedom and Austin Energy.

What to know about net metering in Texas

Net metering is a billing structure that lets you earn credits for excess electricity your solar panels generate and feed back into the grid. It’s popular in many states, but Texas takes a somewhat unique approach due to its deregulated energy market.

Here's how it works:

  • No statewide net metering policy: Unlike many states, Texas doesn’t have a statewide net metering policy. Instead, its energy market is largely deregulated, allowing individual utility companies to set their own policies.
  • Utility-specific programs: Many Texas utilities offer some form of solar buyback program, but the specifics vary by company. Homeowners receive credits or compensation for the excess electricity they feed into the grid, but the rate at which they’re compensated varies.

    Some utilities might offer full retail rates, while others give a reduced or wholesale rate. For example, Rizwan in Katy said their solar buyback program “is a joke. They sell me energy at an exorbitant high rate like 17c/kW and buy the power that I generate from my solar panels for like 2c/kW!”

  • Rollover credits: Some utilities let homeowners accrue rollover credits for excess generation. These credits can be used in months when solar generation is lower, essentially banking the excess energy for later use.
  • Minimum bills: Some utilities charge a minimum monthly bill solar customers must pay regardless of how much energy they produce or consume. For example, Anthony in Center told us they live in “one of those areas where they do some buyback, but they won't take our bill down to zero. We still have a connection fee that we have to pay every month — no matter what.”
  • Monitoring and switching providers: In the deregulated parts of Texas, you can choose your electricity provider. You might be able to switch providers to find a better deal if you aren’t satisfied with the agreement. However, be cautious about any early termination fees.
  • Transition to time-of-use rates: A few Texas utilities are transitioning to time-of-use rates, which can affect how much solar homeowners earn from their panels. This structure charges (or credits) different rates based on when energy is used or generated, usually making energy more expensive during peak demand times.

Your rate might change over time. For example, at first, Jerry in La Porta had a net metering contract that let them buy and sell kilowatt-hours at the same rate. “If I generated 200 and consumed 200, my net usage was zero, and my bill was essentially zero,” he said.

Jerry’s contract ended, and he had to renew it. “Now, I'm paying 21 cents a kilowatt-hour for usage, and I'm only getting back 10 cents a kilowatt-hour for anything I push back to the grid. There's another $40 a month service fee from the utility company as well,” he said. “So, the incentive isn't quite what it was a year ago. Still, it's a good value.”

Isaac in Temple told us that “the best I could find out there is they’ll charge me 14.9, and pay me 9.4 up to a limit. But I still have to keep on paying.” He said he wouldn’t have gone solar if he’d known that.

» WHAT’S THE DIFFERENCE? Kilowatt vs. kilowatt-hour

How much Texans can save with solar panels

In Texas, solar panels typically pay for themselves in around 13 years, and the estimated net savings is $21,350.

“There's been a big reduction in my electric bill,” Ted in San Antonio told us. “If you're looking to save some money and have a battery backup for your house, then going solar is worth it.” Similarly, Don in San Antonio said their monthly electric bill went from around $250 down to $80.

“I like that I have solar, but it's not entirely financially liberating,” Chris in Pflugerville told us. “The energy I produce covers the cost of the electricity itself on my bills, but there is also a delivery fee that I wasn't entirely aware of how that was billed, which I still pay.”

Chris suspected “that's just the way that utilities are setting up their systems so that they can still have some revenue coming from customers who are partially off the grid.”

» EXPLORE: What are grid-tied solar systems?

Even if your solar power system doesn’t generate 100% of your power, you can still save money by not being fully dependent on traditional utilities.

“Our electric bill was $52 last month,” Valerie in Teague said. “Even with the financing and the $52, it was still way cheaper than what we had been paying.”

Bryce in San Antonio said: “One month, we had a zero electric bill. This month, it's $2 and something.”

“Going solar was pretty expensive, but it was something I was wanting to do even before they had a government incentive,” Keith in Baird told us. “My electric bill is $20.”

» DO YOU KNOW? What a solar panel tracker is

Solar resources in Texas

Below are some additional resources that can guide you through transitioning to solar in Texas.

» GUIDE: Solar panel installation

Find solar companies in Texas

Compare popular solar companies available in Texas below. Some, like Freedom Solar, have referral programs — Haojun in Houston got a $500 gift card referring a friend. Read our guide to finding the best solar companies for more.


Choose what information you want to see across each brand. At least one option must be selected.

Find a Solar Energy partner near you.


    Can I get solar panels for free in Texas?

    You can lease or enter a PPA with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.

    How are solar costs trending in Texas?

    The cost to go solar in Texas has fallen 54% over the last 10 years, according to the Solar Energy Industries Association.

    » MORE: Why are solar panels so expensive?

    Is my HOA allowed to restrict solar panels in Texas?

    In Texas, homeowners associations (HOAs) and property owners associations (POAs) can't stop you from putting up solar panels on your property. However, they can restrict solar panels under certain circumstances — for instance, if they extend higher than the roofline or have an element that's not silver, bronze or black.

    How does a solar backup battery work?

    With a backup battery, you can store solar energy when it's abundant and use it during peak times to avoid higher electricity rates.

    Are there any disadvantages to going solar?

    Some solar customers in Texas are frustrated with their utility’s buyback programs.

    “The only drawback is with the renewal with Rhythm,” Lennard in Dallas told us. “I can no longer have a negative bill. If I equal my entire electric use, I will not get a rebate on the surplus. It's a disincentive to add more solar.”

    Greg in Bedford also told us the financial incentive was less than expected — the “huge tax rebate” of $21,000 or $23,000 turned out to be “600 bucks a year back for five years.”

    » MORE: Solar energy pros and cons

    Bottom line: How much are solar panels in Texas?

    The average cost to install solar panels is $21,654 in Texas after the federal solar investment tax credit ($30,934 before the tax credit). Your total solar panel price tag also depends on the size of your system, the type of panels you install and other factors.

    Texas is a big state. The state's deregulated nature offers a lot of choices, but it also means you have to be proactive in managing and understanding your energy agreements.

    See the table below — the ConsumerAffairs research team conducted an in-depth analysis to determine how much it costs to go solar in Texas and the average solar costs in other states.

    Solar costs: Texas vs. nearby states

    Average cost per wattTypical system sizeUpfront cost*ITC value (30%)Payback period**Estimated net savings
    Texas $2.69 8.5 kW $30,934 $9,280 13 years $21,350
    Oklahoma $2.62 11 kW $8,646 $28,820 14 years $14,190
    New Mexico $2.68 7 kW $18,760 $5,628 12 years $15,413
    Louisiana $2.57 12.5 kW $32,126 $9,638 14 years $13,646
    Arkansas $2.54 11 kW $27,940 $8,382 13 years $15,567
    * Before ITC; ** When you pay cash

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Database of State Incentives for Renewables & Efficiency (DSIRE), “Texas Programs.” Accessed Aug. 22, 2023
    2. EcoWatch, “Solar Panel Cost in Texas.” Accessed Aug. 22, 2023
    3. Environmental Protection Agency, “Summary of Inflation Reduction Act provisions related to renewable energy.” Accessed Aug. 22, 2023
    4. Go Solar Texas, “Solar Rights & Regulations.” Accessed Aug. 22, 2023
    Did you find this article helpful? |
    Share this article