Texas solar incentives & net metering (2026)

Texas has never run a statewide solar rebate or income-tax credit — there’s no state income tax to credit against. What exists instead is one statewide property-tax exemption, filed with your county appraisal district, plus whatever your individual utility offers, which means finding your real incentives in Texas means working through your own utility rather than reading a single statewide page. Add in a federal credit that hit $0 on December 31, 2025, and the homework matters more here than in almost any other state.

Start with your own utility, because Texas won’t do it for you

There’s no statewide net-metering mandate in Texas. Each utility — and in deregulated ERCOT territory, each retail electricity provider — sets its own export terms, subject to Public Utility Commission of Texas (PUCT) oversight but with wide latitude in what it actually pays. That’s the structural reason a Texas solar guide can’t hand you one number the way a California or New York guide can.

The provider landscape breaks into three buckets:

Austin Energy customers get the best documented deal in the state: a $4,000 upfront rebate plus a Value of Solar credit on every kWh the system produces (details below).

CPS Energy customers in San Antonio get no rebate — that program stopped taking applications in December 2022 — and a low export credit, commonly reported around 2¢/kWh.

Customers in deregulated ERCOT territory — most of Dallas-Fort Worth, Houston, and a large share of the rest of the state — have no utility-level rebate or buyback obligation at all. Your export rate is whatever retail plan you actively choose to sign up for.

Everyone else — electric co-ops, other city-owned utilities, and the parts of Texas outside ERCOT’s retail market, such as Entergy Texas, SWEPCO, El Paso Electric, and Xcel Energy — sets its own terms, so get that utility’s distributed-generation tariff directly.

Austin Energy: the one utility worth calling first

If you’re an Austin Energy customer, you have a genuinely strong case for solar in 2026 despite the federal credit disappearing. Since July 1, 2026, the residential rebate is $4,000 per project for systems larger than 3 kW (up from $2,500). It comes off your cost directly, no tax liability required — simpler than any tax-credit mechanism. Check the program’s current requirements with Austin Energy before you sign.

The more durable piece is Austin Energy’s Value of Solar (VOS) tariff. This isn’t net metering: you pay for all the electricity you use, and Austin Energy credits you for every kWh your system produces at a published VOS rate built from avoided energy, transmission, and ancillary-service costs plus a societal-benefit component. The rate was 9.91¢/kWh for fiscal years 2024–2026; Austin Energy’s rate table lists 12.89¢/kWh for fiscal 2027, which began October 1, 2026 (an April 2026 update had scheduled the change for November, so check the rate printed on your bill). A system producing 10,000 kWh a year would earn roughly $1,289 in bill credits at that rate (estimate). The rate is recalculated every three years, so confirm the current figure on Austin Energy’s site before signing anything.

CPS Energy: correcting a rebate myth that won’t die

Forums and even some installer sites still mention a CPS Energy solar rebate. It stopped taking applications in December 2022 and has not come back. If a San Antonio quote includes a CPS rebate line, ask the installer to point to where that program currently exists.

CPS also pays one of the lowest export credits in Texas — an avoided-cost-based rate commonly reported around 2¢/kWh (confirm the current figure with CPS) — which means oversizing a system to sell surplus power back isn’t a strategy worth pursuing here. Size for your own consumption instead.

The property-tax exemption: the one thing every Texas homeowner can claim

Because Texas has no state income tax, there was never going to be a state income-tax credit for solar — that mechanism doesn’t exist in Texas tax law for anything. What Texas does offer, under TX Tax Code §11.27, is a full property-tax exemption on any increase in your home’s appraised value that comes from adding solar.

Install an 8 kW system, your county appraises the added value at $20,000, and that $20,000 is simply excluded from what you’re taxed on. At a typical 2% effective property-tax rate across Texas counties, that’s roughly $400 a year, indefinitely — not a lump sum, but a savings that compounds the longer you own the home.

Claiming it takes one filing: the Comptroller’s Form 50-123 (Exemption Application for Solar or Wind-Powered Energy Devices) with your county appraisal district. File once and it generally carries forward unless the district asks you to reapply. The usual deadline is before May 1 of the tax year, so confirm the window with your appraisal district directly. With the federal credit at zero, this exemption now carries more relative weight in your overall return than it used to — factor it in alongside solar panel cost in Texas when comparing system sizes.

For everyone else: how to find and use an ERCOT buyback plan

If you’re in deregulated ERCOT territory (you pick your own retail electricity provider), getting paid for exports takes an active step:

1. Interconnect through your wires utility first. Oncor, CenterPoint, AEP Texas, and TNMP own the physical lines regardless of who sells you electricity, and they handle the interconnection paperwork.
2. Shop for a retail plan with solar buyback specifically. PowerToChoose.org flags which plans include it and at what rate — expect a range of roughly 3¢ to 12¢/kWh as of 2026.
3. Read the full rate structure, not just the buyback number. Many solar-friendly plans pair a decent export rate with a higher price on grid consumption. Your net benefit depends on how much you self-consume versus export, not the buyback rate in isolation.

A system sized to cover 80–90% of your usage before exporting anything generally beats a “sell it all, buy it back” plan at current Texas rates. Use the solar savings calculator to see how the math shifts as your export percentage changes.

Running the numbers on an 8 kW system near Dallas

Take a homeowner in Oncor territory installing 8 kW, with Texas’s roughly 5.3 peak sun hours a day as the baseline. Gross production: 8 kW × 5.3 hours × 365 days = 15,476 kWh a year. Applying the standard 0.80 performance ratio — accounting for inverter losses, temperature effects, wiring, and soiling — actual output lands closer to 12,380 kWh a year. Any quote skipping that adjustment is overstating what the system delivers.

Assume self-consumption of 10,000 kWh at a conservative 13¢/kWh deregulated energy-only rate (below the ~16¢ all-in statewide average — 15.96¢ on EIA’s 12-month average through July 2026): $1,300 a year in avoided cost. The remaining roughly 2,380 kWh exported at a 6¢ buyback rate adds $143 a year. Combined, that’s about $1,443 annually — treat these as estimates, since both usage and rate plans vary household to household.

At a net installed cost of about $20,800 ($2.60/W, estimate) — no federal credit, no utility rebate assumed — simple payback lands around 14 years. Layer in the property-tax exemption, worth an estimated $350–$450 a year on a $20,000 appraisal bump at a 2% rate, and payback tightens to roughly 11–12 years (estimate). Run your own address and utility through the is solar worth it in Texas? breakdown to see how these variables move for your situation.

Where to verify all of this before you sign

Texas incentive information goes stale fast because there’s no single source of truth. Four places to check:

• DSIRE (dsireusa.org) for the current national database entry on Texas, filterable by your specific utility.
• Your utility’s own site — Austin Energy, CPS, Oncor, Entergy Texas, and TNMP each publish current interconnection terms and any active programs directly.
• PUCT (puc.texas.gov) if a utility disputes your interconnection or your export compensation — this is the regulator with appeals authority.
• PowerToChoose.org to compare ERCOT retail buyback plans before switching providers.

Get any rebate, buyback rate, or exemption confirmed in writing in your contract. Verbal promises from a sales rep don’t hold up, and given how recently the rules changed — the federal credit only ended on December 31, 2025, and Austin Energy changed both its rebate and its VOS rate in 2026 — written terms matter more than they used to.