The solar energy market in Texas is booming. The Lone Star State ranks 2nd in the nation for installed solar energy capacity, and Texas solar incentives fuel growth. There are enough solar panels installed in Texas to power more than 2.6 million homes and generate 5.8% of the state's electricity.
Texas receives so much sunlight throughout the year, and also leads the country in wind power. However, despite the Lone Star State’s ideal climate for renewable energy production, Texas burns more coal and emits more carbon dioxide than any other state.
The Texas solar market creates excellent opportunities for installers for numerous reasons. There are a variety of financial incentives, both state-wide and from local governments, that encourage solar panel installations. Understanding Texas solar incentive programs is critical for explaining how these programs work to Texans and benefitting your customers.
For example, the Investment Tax Credit (ITC) has and will continue to fuel solar energy growth throughout the state. The federal solar tax credit is 30% for solar installations through 2032. It’s recommended customers speak with a tax expert to ensure they can utilize the tax credit and beware of offering tax advice.
State-Level Texas Solar Incentives
In addition to federal solar tax incentives, there are local incentives throughout Texas. Let’s explore these programs so you can discuss them with potential customers.
TXU Solar Buyback Plan
TXU, an energy retailer, is based in Irving and has a buyback program for homes with solar panels or wind turbines. When homes with renewable energy systems produce more power than the home consumes, they feed the excess to the power grid, and customers receive credits on their energy bills.
To participate, renewable energy system owners need to sign up for the TXU Energy Renewable Buyback plan and enter an interconnection agreement with their local Transmission & Distribution Utility (TDU). An interconnection agreement gives your customer permission to connect the solar PV system to the utility grid in their service area.
The TDU will need to inspect the solar panel system. They will then use a smart meter to track how much energy goes from the grid to the home and vice versa. Once your customer has received the required approval, they can start receiving clean energy credits on their electricity bill.
Texas Solar Energy System Property Tax Exemption
Because a solar energy system costs thousands and significantly reduces electricity bills, it can increase your customer’s property value. However, there is a solar power property tax exemption from charging additional property taxes due to an increase in home value from installing solar panels. In other words, going solar won’t cause your customer’s property taxes to increase.
Fannie Mae Green Initiative Loan Program For Multifamily Properties
This program provides free water and energy efficiency audits and technical solar assessments. In addition, it finances green property improvements for multi-unit housing. The eligible green upgrades include:
A photovoltaic solar system.
LED lighting.
Energy-saving HVAC equipment.
ENERGY STAR appliances.
To qualify, the property owner must commit to upgrades on multifamily housing properties projected to decrease annual energy and/or water consumption by at least 30% combined. At least 15% must be projected energy savings.
Net Metering Programs in Texas
Despite the lack of a statewide mandate for net metering, numerous companies have developed their own programs to incentivize solar energy adoption. For instance, Austin Energy credits solar energy production at the Value of Solar (VOS) rate, which is typically higher than the retail electricity rate, providing significant savings for customers. Similarly, CPS Energy in San Antonio employs a net billing system where energy up to the home's monthly usage is credited at the retail rate, with excess energy credited at a lower rate.
Understanding these Texas solar incentive programs helps tailor your solar solutions to maximize benefits for your clients. Companies like Gexa Energy offer real-time net metering plans, ensuring customers are credited instantly for excess energy production. Chariot Energy provides flexible solar buyback plans, either compensating for surplus production at wholesale prices or matching retail rates when production is below usage. These variations in net metering and buyback programs underscore the importance of staying informed about local utility offerings, enabling you to provide clients with the most financially advantageous solar options available.
Local Solar Rebates in Texas
There are also some photovoltaic incentives available through local governments and utility companies. Because Texas solar incentive programs are subject to change, confirm the programs are still operational before starting a project.
American Electric Power (AEP) Solar Rebates
The Smart Source Solar PV Program offers rebates for residential and commercial AEP Texas customers. Systems that are 3 kW > 5 kW can qualify for $1,500 in rebates. For systems that are 5 kW > 7.5 kW, they are eligible for $2,250. Projects that are 7.5 kW to 30 kW can qualify for $3,000. In addition, there are tiered incentives for commercial solar systems by system capacity. Solar companies need to be enrolled in the program for projects to qualify.
Austin Energy Solar Rebates
Residential customers of Austin Energy can qualify for $2,500 in rebates by completing Austin Energy’s solar education course and installing a home solar system with a Participating Contractor. The solar installer submits the Austin Energy solar rebate paperwork on the customer’s behalf.
CPS Energy Solar Rebates
This utility company serves the city of San Antonio and offers rebates for residential and commercial solar energy projects. Residential customers can qualify for $2,500 in rebates and a $500 premium for using local solar panels. In addition, it offers a tiered incentive for commercial solar projects based on their capacity.
New Braunfels Utilities (NBU) Texas Solar Rebate
The NBU rebate program offers incentives for installing solar panel systems. Homeowners can receive up to $3,000 in rebates based on the system's size and angle, with a minimum system size of 3 kW required to qualify. This rebate helps reduce the upfront cost of solar installations, making it more affordable for residents in the NBU service area to invest in solar panels in Texas.
Oncor Solar Photovoltaic (PV) Program
Oncor offers solar rebates for residential and commercial solar installations. Residential projects between 1 kW and 15 kW can qualify for $8,500. In addition, commercial projects between 5 kW and 300 kW of capacity are eligible for up to $120,000 in rebates.
To qualify, applicants must be a customer of Oncor, which has a service area that includes Dallas, Fort Worth, and Arlington. Also, the system must be installed by an approved service provider.
San Marcos (SMTX) Solar PV Rebate
This Texas solar incentive offers a rebate of $1 per watt, up to $2,500, for residential solar panel installations. This rebate is available to customers who install systems that meet specific requirements, including being installed by an approved contractor and having an overall system cost not exceeding 50% of the installed cost.
FAQs About Texas Solar Incentives
Read on to gain answers to common questions about installing solar panels in Texas.
Are there solar panel grants in Texas in 2024?
Texas offers several solar panel grants, tax credits, and rebates to help reduce the cost of installing solar systems. Here are some of the key programs available in 2024:
Federal Residential Clean Energy Credit
Local Utility Rebates: Various utility companies in Texas offer rebates for solar installations:
American Electric Power: Offers rebates ranging from $1,500 to $3,000, depending on the system size.
Austin Energy: Provides a $2,500 rebate for systems at least 3 kW in size, contingent on completing a solar education course.
New Braunfels Utilities: Offers up to $3,000 based on the system's size and orientation.
Oncor Residential Solar Program: Offers rebates for systems between 3-15 kW with a battery, though the rebate amount varies.
San Marcos (SMTX) Solar PV Rebate: Provides $1/W up to $2,500, not exceeding 50% of the system's cost
Property Tax Exemption: Texas provides a solar property tax exemption, meaning the added value of the solar system will not increase your customer's property taxes.
Net Metering: Although not mandated statewide, some utility companies offer net metering programs that credit your customer's bill for excess energy produced by your solar panels. This can significantly reduce their electricity bills .
What utility companies offer net metering for solar panels in Texas?
Several utility companies in Texas offer net metering or solar buyback programs, although the state does not mandate net metering by law. Here are some of the key companies providing such programs:
CPS Energy: In the San Antonio area, CPS Energy offers a net billing plan where solar energy up to the home's monthly usage is credited at the full retail rate. Excess energy beyond monthly usage is credited at a lower rate.
Austin Energy: This utility credits solar energy at the Value of Solar (VOS) rate, which is currently higher than most residential electricity rates. This makes solar energy a valuable investment for customers within Austin Energy’s service area.
Brownsville Public Utilities Board (BPUB): BPUB offers a solar buyback program where excess solar energy is credited at the Fuel & Purchase Energy Charge (FPEC) rate, which tends to be lower than other utilities' rates.
Gexa Energy: Gexa Energy provides net metering plans that credit customers for excess solar energy in real-time, helping to maximize the benefits of solar investments. These credits can be used to offset future energy consumption.
Chariot Energy: Chariot Energy offers solar buyback plans that allow customers to be compensated for excess solar production, either at the wholesale price (Chariot Shine) or at the same rate as retail prices if generation is below usage (Chariot Rise).
These programs vary in their specifics, so it's important to review the details and see which plan best fits your customer's energy consumption and solar production profiles. Also, confirm that solar energy programs are still operating before planning a solar panel installation in Texas.
Solar Incentives Could Convince Texas Homeowners To Install Solar Panels
Numerous solar incentives throughout the state are making solar energy more appealing and a smart financial investment. Combined with Texas being one of the sunniest states in the country, these factors make the solar energy market poised for further growth. As a solar professional, there are many opportunities to serve this booming market.
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