Texas homeowners pay about 16.44 cents per kWh (EIA residential retail price, May 2026). Most of Texas is a deregulated market with no statewide net metering, so your solar credit depends on your retail provider’s buyback plan. Texas gives a property-tax exemption on solar and has no state income tax, so there is no state solar credit.
Texas is the second-largest solar market in the country, and its incentives work differently from almost anywhere else. There is no state solar tax credit, but that is because Texas has no state income tax at all. Most of the state runs on a deregulated electricity market, so the value you get for the power your panels export depends on the retail plan you pick, not a statewide rule. This page covers what Texas solar incentives look like in 2026, the property-tax exemption that protects your home value, how the deregulated market changes net metering, why Austin and San Antonio play by their own rules, and how to tell if solar is worth it for your home.
Why Texas solar incentives work differently
The first thing to understand about Texas is that most of it is a deregulated electricity market. Across the ERCOT grid that covers the large majority of Texas homes, you choose a Retail Electric Provider (REP) for the energy, while a regulated wires company, called a Transmission and Distribution Utility (TDU), delivers it and owns the poles and lines (EIA on Texas retail choice). Oncor, CenterPoint, AEP Texas, and Texas-New Mexico Power are TDUs; they run the meter and the interconnection paperwork, but they do not sell you electricity or set a retail solar credit.
Because there is no statewide net metering mandate in Texas, the credit you earn for exported solar depends on the REP plan you choose (U.S. Department of Energy on net metering; DSIRE Texas). Some providers market a solar buyback plan that credits the energy you send back; others do not, and the terms change, so treat any buyback rate as something to verify on the plan’s Electricity Facts Label, not a fixed number. Two big cities, Austin and San Antonio, are the exception: they are municipal utilities outside deregulation and run their own solar programs, covered further down.
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What solar costs in Texas, and what your roof makes
Solar pays in Texas because of the power it replaces and the sun that drives it. The average Texas residential electricity price is about 16.44 cents per kWh (EIA retail sales, residential Texas, as of May 2026). Texas homes run heavy air-conditioning loads for much of the year, so the typical bill is high in absolute dollars, and every kilowatt-hour your roof makes offsets one you would otherwise buy.
Texas sun turns that rate into strong production. According to MySolarFY’s own analysis (as of August 2026), a 6 kW rooftop system in Houston is modeled to produce about 8,479 kWh a year (NREL PVWatts v8 run, NSRDB typical-year data). At the state average price, that output offsets roughly $1,390 of grid power a year, before any incentive. Actual production depends on your roof’s pitch, orientation, and shading, so estimate your own roof with NREL’s free PVWatts calculator before you size a system.
Texas solar incentives at a glance
Texas has no upfront statewide rebate and no state tax credit, so its value comes from a property-tax exemption, local utility programs, and whatever export credit your provider offers. Here is what each piece does in 2026 and the fine print worth knowing.
| Incentive | What it does | 2026 status | Source |
|---|---|---|---|
| Property-tax exemption | Excludes the value solar adds to your home from your property-tax appraisal | Available statewide for qualifying solar and wind devices (Texas Tax Code §11.27) | DSIRE Texas |
| State solar income-tax credit | A state income-tax credit | None; Texas has no state personal income tax | DSIRE Texas |
| Solar buyback (deregulated area) | Credits the solar energy you export to the grid | Depends on your REP’s plan; not a statewide rule, verify the current rate on the Electricity Facts Label | DOE |
| Municipal utility programs | Rebates and export credit in Austin and San Antonio | Austin Energy (Value of Solar) and CPS Energy run their own programs, verify current terms | DSIRE (CPS Energy) |
| Federal residential (Section 25D) | A 30% homeowner credit | Ended for expenditures made after December 31, 2025 | IRS |
The property-tax exemption is the one incentive that applies to nearly every Texas homeowner. Under Texas Tax Code Section 11.27, the added home value from a qualifying solar energy device is exempt from your property-tax appraisal, so a system that raises what your home is worth does not raise your tax bill (DSIRE Texas, verify current terms with your county appraisal district). It does not depend on the federal credit that ended after 2025, and it applies whether you are in Houston, Dallas, Fort Worth, or a rural county. For how programs stack across states, see our solar incentives overview, and for the full Texas picture start at our Texas solar hub.
Heads up on the federal change: the 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under the One Big Beautiful Bill Act (IRS, as of January 2026), so a Texas homeowner who buys solar with cash or a loan in 2026 cannot claim it. Confirm every figure against the linked source, and ask a tax professional about your own situation. MySolarFY does not provide tax advice.
Net metering in Texas: there is no statewide rule
Texas does not have a statewide net metering law, and that surprises a lot of first-time solar shoppers. In a traditional net-metering state, your utility credits every exported kilowatt-hour against one you pull back, at the full retail rate. In most of Texas, the deregulated market means no such mandate exists, so the value of your exports comes down to the solar buyback plan your chosen Retail Electric Provider offers (DSIRE Texas; DOE homeowner’s guide).
What that means in practice: shop the plan, not just the panels. Some Texas providers advertise a solar buyback or surplus-credit plan; the credit rate, whether it rolls over month to month, and any monthly fee vary by provider and can change, so read the Electricity Facts Label and confirm the current terms before you switch plans or size a system. A licensed local installer who works in your area every day will know which plans customers use. For the mechanics of how export credits work in general, see how net metering credits your solar exports.
Austin Energy and CPS Energy: the municipal exception
Austin and San Antonio are not part of the deregulated market, so their rules are completely different. Austin Energy and CPS Energy are municipally owned utilities that sit outside retail choice and run their own solar programs, so if you live in either city you do not shop for a REP or a buyback plan the way the rest of Texas does (DSIRE).
| Utility | Type | Rough service area | Solar approach (2026) |
|---|---|---|---|
| Austin Energy | Municipal | City of Austin | Value of Solar tariff plus a residential solar rebate; verify current amount and availability |
| CPS Energy | Municipal | San Antonio area | Net metering credited at the utility’s avoided-cost rate, plus a residential rebate; verify current terms |
| Oncor, CenterPoint, AEP Texas, TNMP | Regulated wires (TDU) | Deregulated ERCOT areas statewide | Deliver power and run interconnection; your export credit comes from your REP, not the TDU |
Austin Energy uses a Value of Solar rate rather than classic net metering: it bills you for all the power you use and separately credits your solar production at a set rate, and it has offered a residential solar rebate (DSIRE; confirm the current rate and rebate on the Austin Energy site). CPS Energy offers net metering that credits your net excess generation at the utility’s avoided-cost rate and a rebate for customers who enroll, with terms last updated in early 2026 (DSIRE CPS Energy; verify current amounts with CPS Energy). Because both programs are set by the utility and can change, confirm the current amount and enrollment rules before you sign anything.
Do Texas utilities offer solar rebates?
A handful of Texas utilities run their own residential solar rebate on top of the statewide property-tax exemption, but the amounts, and even whether a program is still open, change often. These utility rebates are separate from the retail buyback plans covered above. The Database of State Incentives for Renewables and Efficiency (DSIRE) tracks them, and the program pages update through the year, so treat every figure below as something to confirm with the utility before you count on it. Enter your ZIP in the tool on this page and a licensed local installer can tell you which programs your address actually qualifies for.
| Utility | Solar rebate (verify current terms) | 2026 status | Source |
|---|---|---|---|
| Austin Energy | Residential solar rebate, reported at $2,500, alongside its Value of Solar credit | A NREL-hosted Austin Energy customer guide states a $2,500 rebate as of May 2023; amounts change, so verify the current figure and the participating-contractor requirement with Austin Energy | NREL |
| CPS Energy (San Antonio) | Residential solar rebate plus net metering at the avoided-cost rate | DSIRE lists the rebate with set start and end dates, so it may be limited or closed; verify current availability with CPS Energy before you rely on it | DSIRE |
| Oncor | Oncor Electric Delivery Residential Solar Program | Listed on DSIRE as a residential solar program even though Oncor is a wires-only TDU; the current amount and status are not published as a fixed public figure, so verify directly with Oncor | DSIRE |
| AEP Texas | SMART Source Solar PV rebate | Listed on DSIRE, but the current amount and active status are not confirmed in authoritative public sources; verify with AEP Texas before you count on it | DSIRE |
| CenterPoint Energy | No residential solar rebate documented | DSIRE shows CenterPoint energy-efficiency rebates but no residential solar rebate; in its deregulated territory your solar credit comes from your REP’s buyback plan, not the TDU | DSIRE Texas |
The takeaway: a utility rebate can help, but never assume one applies to your address. Oncor’s residential solar program is a good reminder that a wires-only TDU can still sponsor a rebate, so it is worth checking your own utility by name on DSIRE rather than assuming the deregulated market leaves you nothing. Smaller municipal utilities, such as Denton Municipal Electric, also run their own energy programs that can change year to year, so confirm the current program, amount, and eligibility directly with the utility. For how these stack with everything else, see our solar incentives overview.
Is solar worth it in Texas?
For many Texas homeowners, yes, because the fundamentals line up. High cooling loads, strong sun, a property-tax exemption, and no state income tax combine into a solid case even without a state credit or statewide net metering. The honest catches are that the federal homeowner credit is gone as of 2026, your export credit depends on the plan or utility you choose rather than a guaranteed rate, and buyback terms can change. Whether it pays for your specific home comes down to your roof, your provider, and your usage. For a deeper look at the numbers, see whether solar panels are worth it, what a system runs on our Texas solar cost guide, and the federal picture in what the federal solar tax credit change means in 2026.
How you pay decides which benefits you keep. The 30% federal homeowner credit (Section 25D) ended for expenditures made after December 31, 2025, so it is not part of a 2026 purchase on any path. If you buy the system with cash or a loan, you own it and take the property-tax exemption and any buyback credit directly. If you lease or sign a power-purchase agreement, a third party owns the panels, you typically pay little or nothing up front, and the company that owns the system claims any commercial credit (Section 48E), not you. On any path, Texas’s property-tax exemption still applies to the home. MySolarFY matches you with licensed Texas installers so you can compare real local quotes side by side, with no obligation.
Frequently asked questions
What solar incentives does Texas offer in 2026? Texas offers a property-tax exemption that excludes the value solar adds to your home from your appraisal (Texas Tax Code Section 11.27), and local utility programs in some areas. There is no state solar income-tax credit because Texas has no state income tax, and no statewide net metering, so your export credit depends on your retail provider’s solar buyback plan or, in Austin and San Antonio, the municipal utility’s program. The 30% federal homeowner credit ended for expenditures made after December 31, 2025. Confirm current terms with each source before you sign.
Does Texas have net metering? Not as a statewide rule. Most of Texas is a deregulated market, so there is no state net-metering mandate; the value of the solar power you export depends on the buyback plan your Retail Electric Provider offers, and terms vary by provider and can change. Austin Energy (a Value of Solar rate) and CPS Energy (net metering at the avoided-cost rate) are municipal utilities with their own programs. Read your plan’s Electricity Facts Label and verify the current buyback rate before you size a system.
Is there a Texas state solar tax credit? No. Texas has no state personal income tax, so there is no state income-tax credit for solar. Texas’s value comes instead from a property-tax exemption on the added home value (Texas Tax Code Section 11.27), local utility rebates in some areas, and whatever solar buyback credit your provider offers. These do not depend on the federal credit that ended after 2025.
How does the Texas property-tax exemption for solar work? Under Texas Tax Code Section 11.27, the increase in your home’s value from a qualifying solar energy device is exempt from property-tax appraisal, so adding solar does not raise your property-tax bill even as it can raise your home’s value. It applies statewide to qualifying systems, but you generally file an exemption application with your county appraisal district, so confirm the current form and terms locally.
How is solar different in Austin and San Antonio? Both cities are served by municipal utilities outside the deregulated market, so you do not choose a Retail Electric Provider or a buyback plan. Austin Energy uses a Value of Solar rate and has offered a residential rebate, and CPS Energy in San Antonio offers net metering credited at its avoided-cost rate plus a rebate for enrolled customers. Program amounts are set by each utility and can change, so verify the current terms directly with Austin Energy or CPS Energy.
What happened to the federal solar tax credit in Texas? The 30% federal Residential Clean Energy Credit (Section 25D) ended for expenditures made after December 31, 2025, under the One Big Beautiful Bill Act, so a Texas homeowner who buys solar in 2026 with cash or a loan cannot claim it. A separate commercial credit (Section 48E) can apply to leased and PPA systems, but the business that owns the system claims it, not the homeowner. Texas’s own property-tax exemption was not affected.
Do any Texas utilities offer a solar rebate? A few do, but you have to check by name and confirm current terms. A NREL-hosted Austin Energy guide lists a $2,500 residential solar rebate as of May 2023, and CPS Energy in San Antonio has run its own rebate; DSIRE also lists an Oncor Electric Delivery Residential Solar Program and an AEP Texas SMART Source Solar PV rebate. Amounts and availability change and some may be closed, so verify the current program directly with the utility. CenterPoint has no documented residential solar rebate. These are separate from your retail provider’s buyback plan.
Reviewed by the MySolarFY team. Figures were verified against the linked EIA, NREL, IRS, DSIRE, and U.S. Department of Energy sources as of August 2026; Texas retail plans and utility program terms change, so confirm current buyback and rebate terms with your provider or municipal utility before you decide. MySolarFY does not provide tax or financial advice; consult a licensed professional about your own situation. Learn more about the MySolarFY team and how we work, and browse more states from our solar by state hub.
MySolarFY is a free service that matches homeowners with licensed solar installers. We are not an installer, financing company, or government program. “No up-front cost” refers to qualifying lease or PPA financing, where eligible homeowners may have no out-of-pocket cost at installation. Lease and PPA terms typically run 20 to 25 years, may include an annual price escalator, and total payments may exceed the cost of a cash purchase. Homeowners do not get the federal residential credit that ended after December 31, 2025; on a leased system the company that owns it claims any commercial credit. Solar panels are not free and monthly payments apply. Eligibility, savings, incentives, and rates vary and are not guaranteed. See our full disclaimer.
