Texas solar incentives & net metering (2026)

The federal residential solar tax credit expired December 31, 2025 — meaning the main incentive driving Texas solar payback calculations for years is now $0. What remains: a 100% statewide property-tax exemption, a $2,500 rebate plus a 9.91¢/kWh export tariff for Austin Energy customers, and voluntary buyback plans in the deregulated ERCOT market that vary widely by zip code.

The federal credit is gone in 2026

IRC §25D expired on December 31, 2025, under the One Big Beautiful Budget Act (OBBBA). For any solar system purchased and installed in 2026, the federal credit is $0. Any installer still pitching a “30% federal tax credit” is quoting a rule that no longer exists.

One narrow exception: financing through a lease or power purchase agreement (PPA) means the installation company owns the system and may claim a commercial investment tax credit under §48E. Some installers pass a portion of that value through as a lower monthly payment or reduced upfront cost. Ask specifically whether any quoted savings assume a §48E pass-through, and get the answer in writing before signing.

For current federal and state incentive status, check the DSIRE database, maintained by NC State with Department of Energy support. It updates when law changes; most installer websites do not.

Texas property-tax exemption: the break that still holds

Texas has no state income tax, so there was never a state solar income-tax credit to begin with. What Texas does provide is a 100% property-tax exemption on any increase in home value attributable to a solar installation, codified in TX Tax Code §11.27.

In practice: install an 8 kW system, the county appraises the added value at $20,000, and that $20,000 is excluded from your taxable home value. At a 2% effective property-tax rate — typical across many Texas counties — that saves roughly $400 per year, indefinitely. The benefit compounds over time rather than arriving as a one-time lump sum.

To claim the exemption, file Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices) with your county appraisal district. File once; it carries forward automatically each year. The form covers solar PV, solar water heaters, and qualifying wind devices. Filing deadlines vary by county — confirm the window with your appraisal district.

With the federal credit gone, this property-tax exemption now carries more relative weight in the overall return calculation. Factor it in when comparing solar panel cost in Texas across system sizes.

Utility incentives: what each major provider actually offers in 2026

The table below summarizes the current picture. Verify directly with your provider before signing — these programs change without broad public notice, and the gap between what the internet says and what a utility currently offers can be significant.

Provider	Service territory	Upfront rebate	Export / buyback rate
Austin Energy	City of Austin customers	$2,500 residential rebate	9.91¢/kWh (Value of Solar tariff)
CPS Energy	San Antonio	None — rebate ended Dec 2022, not renewed	~$0.02/kWh
Oncor / ERCOT retailers	DFW, most of North & West TX	None at utility level	3–12¢/kWh (voluntary buyback plans, varies by retailer)
Entergy Texas	Southeast TX (Beaumont area)	None currently	Varies; verify directly
Texas-New Mexico Power	Smaller communities, West TX	None currently	Varies; verify directly

Austin Energy: the standout deal in Texas

Austin Energy customers still have a strong case for solar in 2026 despite the federal credit expiring. The $2,500 upfront rebate reduces your net installation cost directly — no tax liability required, no filing complexity. It comes after the utility inspection clears.

The more durable benefit is Austin Energy’s Value of Solar (VOS) export tariff at 9.91¢/kWh. This is not traditional net metering. Austin Energy calculates an independent “value of solar” rate accounting for avoided fuel costs, grid capacity benefits, and environmental value. At 9.91¢, it sits well above what most ERCOT retail plans pay for exported generation, and it’s a published tariff rate rather than a market-fluctuating figure.

For a customer exporting 3,000 kWh per year, that’s roughly $297 annually in export credits. Check the current VOS rate directly on Austin Energy’s website before signing — the tariff is reviewed periodically, and the rate here reflects mid-2026 figures.

CPS Energy: a common misconception to correct

Online forums and some installer websites still list a CPS Energy residential solar rebate. That program ended in December 2022 and has not been renewed as of 2026. If a San Antonio installer quotes you a CPS rebate, verify this on CPS Energy’s own website before proceeding.

CPS also offers some of the lowest export compensation in the state — roughly 2¢/kWh for excess generation. At that rate, oversizing a system to sell surplus power back to CPS is unlikely to pay off. Size for your own consumption rather than maximum exports.

Net metering in Texas: no mandate, patchwork rules

Texas has no statewide net-metering mandate, which is why the incentive picture varies so dramatically by zip code. Each utility sets its own interconnection rules and export compensation terms, subject to Public Utility Commission of Texas (PUCT) oversight but with significant latitude in what it pays.

In the deregulated ERCOT market — covering most of the state — you choose your own retail electricity provider (REP). Your solar buyback rate is a feature of whichever retail plan you select, not a utility-level entitlement. Without proactively choosing a plan with a solar buyback component, you may export power to the grid for free.

How ERCOT retail solar buyback plans work

For deregulated Texas, the practical sequence:

1. Interconnect with your transmission utility. Oncor, AEP Texas, TNMP, and Entergy own the physical wires and manage interconnection regardless of which company sells you electricity. Contact the transmission utility first.
2. Choose a retail plan with solar buyback. PowerToChoose.org lists whether a plan includes solar buyback and at what rate. Rates range from roughly 3¢ to 12¢/kWh as of 2026 — the spread is wide enough to matter.
3. Understand the full rate structure. Many solar buyback plans pair a competitive export rate with a higher consumption rate on power drawn from the grid. The net benefit depends on your self-consumption ratio, not the export rate alone.

A system covering 80–90% of your usage before exporting will generally outperform a “sell everything, buy it back” arrangement at current Texas retail buyback rates. Talk to your installer about sizing with self-consumption in mind, and use the solar savings calculator to model how the math shifts as the export percentage changes.

Worked example: 8 kW system in the Dallas area (2026)

A homeowner in Oncor territory installing an 8 kW system. Texas averages roughly 5.5 peak sun hours per day across most regions.

Gross production estimate: 8 kW × 5.5 hours × 365 days = 16,060 kWh/year
Real-world output (applying a 0.80 system performance ratio for inverter efficiency, temperature derating, soiling, and wiring losses): approximately 12,850 kWh/year

That 20% reduction from gross to net output is standard. Any installer quoting the raw gross figure without a performance ratio adjustment is overstating what the system will actually deliver.

Assume self-consumption of 10,500 kWh at an avoided retail rate of 13¢/kWh: $1,365/year in savings. The remaining roughly 2,350 kWh exported at a 6¢ buyback rate adds $141/year in credits. Combined annual benefit: approximately $1,506 — these are estimates; utility rates and usage patterns vary.

At a net installed cost of $22,000 (after $0 federal credit and no applicable utility rebate), simple payback lands around 14–15 years. Add the property-tax exemption — potentially $350–$450/year avoided at a 2% rate on a $20,000 system appraisal — and payback improves to roughly 12–13 years. Run your own roof and usage numbers through the is solar worth it in Texas? analysis to see how the variables shift for your situation.

How to check your own incentives before you sign

Incentive programs update more frequently than most homeowner guides do. Four checks before committing:

• DSIRE (dsireusa.org): The authoritative national database of state and utility incentives, maintained by NC State with DOE support. Filter by Texas and by your specific utility.
• Your utility’s website directly: Search “solar interconnection” or “residential solar.” Austin Energy, CPS, Oncor, Entergy Texas, and TNMP each publish their current interconnection tariffs and any active programs.
• PUCT (puc.texas.gov): The Public Utility Commission of Texas regulates retail electricity and interconnection rules. If a utility denies your interconnection or disputes your export compensation, PUCT is the appeals body.
• PowerToChoose.org: For ERCOT retail customers, compare solar buyback plans here before switching providers. Filter specifically for plans that list a solar buyback rate.

Get any promised rebate, buyback rate, or credit confirmed in writing within your retail contract or installer agreement. Verbal representations about incentive values are not enforceable — and in a market where the rules changed as recently as January 2026, written documentation matters more than ever.