Texas is the second-largest solar market in the U.S., despite having no state-level solar income tax credit. The federal credit, generous local utility programs, and a solar property tax exemption make Texas a strong solar market.
Federal Credit (30%)
The 30% IRC 25D credit applies in Texas like every other state. On a typical Texas 10kW system costing $28,000–$35,000, the credit returns $8,400–$10,500.
Property Tax Exemption
Texas law (Tax Code Section 11.27) exempts the added value of a solar energy system from property tax assessment. A solar installation that adds $20,000 to your home's market value won't increase your property tax bill — a significant long-term benefit.
Austin Energy Rebate
Austin Energy offers one of the most generous utility rebates in the country: $2,500 for solar installations combined with their Value of Solar (VoS) export rate, which pays approximately $0.097/kWh for excess generation. Combined with the federal credit, Austin homeowners can net down solar costs substantially.
CPS Energy (San Antonio) Programs
CPS Energy's solar program provides rebates and a net metering structure for residential solar customers. Check CPS Energy's current program availability as incentive levels are updated periodically.
Texas Net Metering
Unlike some states, Texas doesn't have a statewide net metering mandate. Net metering is utility-specific: Austin Energy, CPS Energy, and Oncor (Dallas/Fort Worth) have programs, but policies vary. In deregulated areas of Texas (ERCOT), net metering terms are negotiated with your retail electricity provider (REP). HomeShark identifies your specific utility's policy.
The Bottom Line for Texas Homeowners
With 5–6 peak sun hours/day, rising electricity rates, and no state income tax (so the full federal credit is applied against federal liability only), Texas offers solid but not exceptional solar ROI. Austin and San Antonio homeowners benefit most from local utility programs. Dallas, Houston, and suburban markets rely primarily on the federal credit and property tax exemption.