State solar guide
Texas has strong solar fundamentals in 2026. The federal residential credit expired December 31, 2025, but state incentives and net-metering rules still support solid payback timelines for qualified homeowners.
Sources: ElectricChoice June 2026 via Electric Choice electricity-prices-by-state | NREL PVWatts (wide range by region; West Texas highest at 7.5, East Texas 4.0) | EnergySage June 2026 (typical 12.46 kW system at $27,516 pre-incentive, averaging $2.21/W) | Federal residential credit: Section 25D expired December 31, 2025, H.R.1 (One Big Beautiful Bill Act).
Net metering
Texas has no statewide net metering law. Most Texans choose their Retail Electric Provider in the deregulated ERCOT market, and buyback is entirely market-driven. Fixed-credit plans range from 3 to 8.5 cents per kWh. Real-time wholesale plans can spike high but also run near zero. Austin Energy's Value of Solar rate at 9.91 cents per kWh is the highest stable rate in the state. Oncor, TXU Solar Buyback, CenterPoint, and Green Mountain Energy offer plans that approach retail parity in specific service territories. Regulated utilities outside ERCOT (small co-ops) have their own export programs.
Austin Energy (City of Austin customers) offers the Value of Solar (VoS) rate at 9.91 cents per kWh, the most favorable stable buyback in Texas. CenterPoint and Oncor territory customers have REP-based options with rates from 3 to 8.5 cents per kWh. AEP Texas and TNMP territories have regulated utility programs. Buyback plan selection is a key economic variable for Texas solar buyers.
Program: NM3_variable_or_none. Last verified: June 1, 2026. DSIRE source (opens in new tab).
Verify with your utility
Net-metering rules change by utility and program cycle. Confirm current export credit rates and eligibility with your specific Texas utility before contracting. Current program details at DSIRE (opens in new tab).
State incentive stack
The federal residential credit expired December 31, 2025. The programs below are what remains for Texas homeowners. Amounts and availability change; every program is date-stamped and linked to its DSIRE source.
Federal residential solar credit (Section 25D): expired. The Section 25D residential investment tax credit expired December 31, 2025. The residential credit rate is 0%. State and local incentives below may still significantly reduce your net system cost. Commercial systems still qualify for Section 48E (30%).
| Program | Benefit | Eligibility | Status | Source |
|---|---|---|---|---|
| Texas Property Tax Exemption (Section 11.27) property_tax_exemption | 100% of solar-added assessed value 100% exemption on the added home value from a qualifying solar installation. File Form 50-123 with your county appraisal district by April 30 of the applicable tax year. | Residential solar installations in Texas | Active | DSIRE (opens in new tab) |
| Austin Energy Value of Solar (VoS) Buyback utility_buyback | 9.91 cents per kWh Austin Energy customers receive 9.91 cents per kWh for excess generation exported to the grid under the Value of Solar tariff, the highest stable buyback rate in Texas. | Austin Energy residential customers with grid-tied solar | Active | DSIRE (opens in new tab) |
| Austin Energy Solar Rebate utility_rebate | $2,500 One-time rebate for residential solar installations 3 kW or larger. Requires completion of an Austin Energy energy efficiency course. | Austin Energy residential customers, systems 3 kW or larger, with course completion | Pending | DSIRE (opens in new tab) |
| AEP Texas SMART Source Rebate utility_rebate | $1,500 to $3,000 Rebate program for residential solar customers in AEP Texas service territory. | AEP Texas residential customers | Pending | DSIRE (opens in new tab) |
| Oncor Residential Solar Program utility_rebate | Varies by system size - verify with Oncor Rebate for 3 to 15 kW residential solar systems in Oncor territory, including battery-paired systems. | Oncor territory residential customers, systems 3 to 15 kW | Pending | DSIRE (opens in new tab) |
Data last verified June 1, 2026. Incentive programs change; verify current amounts and availability at dsireusa.org (opens in new tab) before committing to a project.
Battery storage incentives in Texas
Texas has no statewide battery storage incentive or rebate program as of June 2026. The Oncor Residential Solar Program includes battery as a qualifying component for rebates of $1,500 to $3,000 for 3 to 15 kW systems, but this is a utility-specific program in Oncor territory only. No state-level SGIP-equivalent or battery-specific tax credit exists. Grid outage risk (post-2021 winter storm Uri) makes battery storage a resilience investment for many Texas homeowners, though purely on a self-funded basis. Verify Oncor program availability and current budget status directly with Oncor or your installer.
Savings example
This example uses real Texas market data. No federal residential credit is applied. Figures are illustrative; your in-home assessment uses your actual utility bills and the current rate schedule for your specific utility.
System size 12.5 kW at $2.21 per watt (EnergySage June 2026 Texas average). Annual production estimated at 18,000 to 22,000 kWh based on Austin area peak sun hours of 5.1 to 5.5. Assumes 70% self-consumption at 15.41 cents per kWh retail value plus 30% exported at 9.91 cents per kWh Value of Solar rate. Customers outside Austin Energy territory with lower buyback rates (3 to 8.5 cents per kWh) will see longer payback. Federal residential credit: $0 (expired). Figures are illustrative; your in-home assessment will use your actual utility rate schedule and specific REP buyback plan.
Texas Austin Energy customer (illustrative)
Illustrative example. Federal residential credit: $0 (Section 25D expired December 31, 2025). Your estimate will use your actual utility bills and current rate schedule.
Permitting
Texas does not have a statewide residential solar permit fee cap equivalent to California AB 1124. Permit requirements and fees are set by each local Authority Having Jurisdiction (AHJ). In major metros, permit timelines average 2 to 6 weeks. SolarAPP+ adoption is limited in Texas compared to California. Contract to energization typically runs 8 to 14 weeks. Utility interconnection timelines vary by provider; ERCOT-territory REP interconnection coordination adds complexity versus traditional utility markets.
Interconnection in ERCOT involves coordination between the installer, the distribution utility (Oncor, CenterPoint, AEP, etc.), and the retail electric provider. This three-party process can extend timelines compared to traditional utility markets. Confirm your AHJ and distribution utility requirements at the start of your project.
Commercial solar in Texas
The commercial solar credit (Section 48E, 30 percent) remains available for qualifying commercial projects. Construction must begin by July 4, 2026 to qualify for the full placed-in-service window. Combined with MACRS accelerated depreciation and 100 percent first-year bonus depreciation, the combined first-year federal benefit can reach 45 to 55 percent of project cost for many Texas business owners. Direct Pay is also available for nonprofits, municipalities, and other tax-exempt entities.
Commercial solar overviewCommercial solar projects must begin construction by July 4, 2026 to qualify for the 30 percent Section 48E federal tax credit. After that date, the system must be placed in service by December 31, 2027.
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