Did you know that there are enough Texas solar panel installations to power more than 1.63 million homes? That makes it the second-leading solar state in the nation, next only to California.
Moreover, the Lone Star State’s solar capacity will continue to grow this year. Experts project Texas will add 10 gigawatts (GW) more of utility-scale solar by the end of 2022.
A chief reason for that growth, in turn, is the availability of Texas solar tax credits and rebates.
We’ll discuss some of those incentives in this guide, so be sure to read on.
Federal Solar Investment Tax Credit (ITC)
The federal ITC is a tax credit taxpayers can claim on a qualified solar system installation. It’s a dollar-for-dollar reduction in the income taxes you owe the federal government. The exact credit amount depends on the cost of the solar property.
For home installations completed on or before January 2023, the tax credit is 26%. That goes down to 22% for systems put in place throughout 2023. The program expires in 2024 unless Congress extends it again.
So, suppose your qualified solar panel installation in Texas amounts to $15,000. With the 26% ITC, you should receive a federal tax credit totaling $3,900. You can then deduct that $3,900 from the income tax you’d otherwise pay the federal government.
Solar Energy System Property Tax Exemption
Texas offers a 100% property tax exemption on the appraised value of solar energy systems. That means you don’t have to pay property taxes on the value added by a new solar panel system to your property.
For example, let’s say your home’s current value (without a solar energy system) is $200,000. Even if you add a solar system worth $15,000, the property tax you’ll pay won’t go up, thanks to the property tax exemption. You’ll still pay taxes, but only for the $200,000 (pre-solar) value of your property.
Local Solar Rebates
Some local utility companies in Texas offer rebates to new and existing customers.
An example is Austin Energy, offering a solar rebate worth $2,500. To qualify for that incentive, though, you need to be an Austin Energy customer. You also have to connect your new solar PV system to your account with the utility company.
American Electric Power (AEP), Oncor, and CPS Energy offer similar incentive programs. You can also check out this guide to discover more about solar deals from local Texas companies.
In any case, be sure to ask your utility provider, as you may qualify for such money-saving deals. Don’t forget to do the same when comparing solar installation companies. The best solar panel companies offer rebates on their equipment and installation services.
Time to Invest in a Texas Solar Panel System
There you have it, your guide to the various incentives you can get with a Texas solar panel installation. Now, you know that there’s the 26% federal ITC, 100% Texas property tax exemption, and local rebates. Qualifying for those programs can significantly bring down your costs.
So, as early as now, start obtaining solar panel quotes from Texas installers. The sooner you do, the sooner you can have a quality system put in place.
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