The Ultimate Guide to Texas Solar Tax Credits & Incentives in 2026
Spoke ArticleTexas1 min readVerified Q1 · 2026

The Ultimate Guide to Texas Solar Tax Credits & Incentives in 2026

SBI Editorial DeskUpdated Q1 · 20263 sections

While Texas does not levy a state income tax, making state-level income tax credits impossible, the state government and local utilities have established incredibly strong incentives to encourage solar adoption. Understanding these financial levers is critical to maximizing your solar ROI.

01

The 30% Federal Investment Tax Credit (ITC)

The Federal ITC is the largest financial incentive available. You can deduct 30% of your total solar and battery system cost from your federal income taxes. If your system costs $30,000, you are eligible for a $9,000 tax credit. This credit rolls over to the next year if you do not have enough tax liability in year one.

02

Texas Solar Energy Device Property Tax Exemption

Installing a high-quality solar array instantly boosts your property's value. Under Texas Tax Code Section 11.27, homeowners are granted a 100% exemption on the appraised value added to their home by a solar energy system. You get all the equity benefits when selling your home without paying higher annual property taxes.

03

Local Utility and Municipal Rebates

Depending on your zip code, local utilities offer thousands of dollars in direct cash rebates. For example, Austin Energy, CPS Energy (San Antonio), and Oncor (Dallas/Fort Worth) frequently offer heavy incentives for solar and battery installations that can significantly offset your upfront costs.

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