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The federal residential solar tax credit died on December 31, 2025. Texas homeowners receive $0 from Washington in 2026. Texas has no state solar rebate either. And unlike every New England state, Texas charges 8.25% sales tax on solar. But Texas solar still works — because installations cost $2.16/W (vs $3.00+ in NE), the sun shines 30% more, and the right incentive stack delivers $10,000-$25,000+ in lifetime value.
This is the honest Texas guide. No fake ITC claims. No state rebates that do not exist. Just utility-by-utility programs, REP buyback selection, and the exact steps to maximize every dollar.
Federal ITC
$0
Expired Dec 31, 2025
TX Install Cost
$2.16/W
vs $3.00+ in New England
Annual Sun Hours
1,800+
30% more than NE states
Lifetime Stack
$25K+
9 kW, best case (AE)
Quick Answer
The federal residential solar tax credit (Section 25D) expired December 31, 2025. Texas homeowners receive $0 from the ITC in 2026. Texas has no state solar rebate and no sales tax exemption on solar (8.25% applies). However, Texas compensates with the lowest installation costs in the country ($2.16/W) and 30% more sun-hours than New England. The incentive stack: utility rebates ($0-$5,000 depending on territory), solar buyback credits ($500-$2,000/year with the right REP), 100% property tax exemption (~$385/year), Propel financing (Day 1 cost at ~70%), and Section 30C EV charger credit ($1,000, expires June 30, 2026). The #1 mistake is choosing the wrong REP for solar buyback — it costs $1,000+/year.
Before we show you how to maximize what is available, here is the honest reality about what Texas is missing compared to New England states.
The federal residential solar ITC is dead. Eliminated by the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025. If you buy solar with cash or a loan in 2026, you receive $0 from the federal government. No pending legislation to reinstate it.
Unlike MA (SMART $0.03/kWh), NJ (ADI $85.00/MWh), or RI (REF $0.65/W), Texas has zero state-level solar programs. Texas has no state income tax, so there is no state income tax credit either. No production incentive. No SREC market. Everything in Texas is at the utility level — and it varies wildly by territory.
Every New England state exempts solar from sales tax. Texas does not. The full 8.25% state and local sales tax applies to solar equipment and installation. On a $19,440 system, that adds ~$1,604 to your cost. This is a real disadvantage vs NE states — we will not pretend otherwise.
Texas has no statewide net metering requirement. Solar buyback is voluntary and set by your REP in deregulated ERCOT areas. Municipal utilities (Austin Energy, CPS Energy) set their own programs. Choosing the wrong REP means getting paid $0.03/kWh for excess solar instead of $0.15/kWh. This is the #1 mistake Texas solar owners make.
Texas has fewer incentives than New England, but it has two massive structural advantages:
Lowest Install Costs
Texas average: $2.16/W vs $3.00-$3.40/W in New England. A 9 kW system costs ~$19,440 in TX vs $27,000-$30,600 in NE. You start $8,000-$11,000 ahead.
30% More Sun
Texas averages 1,800+ peak sun hours/year vs 1,200-1,400 in NE. A 9 kW system produces ~14,400 kWh/year in TX vs ~10,800 kWh in ME. More production = faster payback.
Texas has fewer layers than New England, but each one matters. Claim all six and a $19,440 system delivers $10,000-$25,000+ in total value over 25 years.
Previously 30% of system cost (~$5,832 on a $19,440 system). Now $0 for cash/loan purchases. If you lease or PPA, the third-party owner can still claim Section 48/48E (30%+) on projects beginning construction before July 4, 2026 — and pass some savings to you as lower payments. Alternatively, Propel financing achieves a similar result through ownership.
Unlike MA, ME, CT, RI, NH, NJ, and VT — which all exempt solar from state sales tax — Texas charges the full 8.25% on solar equipment and installation. On a $19,440 system, this adds ~$1,604 to your total cost. There is no workaround or exemption available.
Texas solar incentives vary wildly by utility territory. Your location determines which rebates, buyback programs, and interconnection rules apply. Find your utility below.
Austin metro
Best in TexasElectric Rate
$0.12/kWh avg
Solar Rebate
Up to $2,500
Battery Rebate
Up to $2,500
Buyback
VOS tariff $0.097/kWh
Key fact: Municipal utility — only REP option. VOS buyback is lower than retail but guaranteed.
Apply for solar rebate BEFORE installation
Battery rebate stacks with solar rebate ($5,000 total possible)
VOS rate is fixed and predictable — good for financial planning
No REP choice — Austin Energy is your only provider
DFW, East TX, parts of Central TX
Good (with caveats)Electric Rate
$0.15/kWh avg (varies by REP)
Solar Rebate
$300-$3,500
Battery Rebate
None specific
Buyback
Depends on your REP (choose wisely!)
Key fact: Deregulated — you choose your REP. Oncor delivers power, REP sets buyback rate.
Oncor rebate requires MANDATORY smart thermostat installation
Must apply within 90 days — strict deadline
REP selection is critical: TXU Solar Buyback or Chariot for 1:1 credits
Avoid REPs offering only wholesale buyback ($0.03-$0.05/kWh)
Houston metro
Limited solar incentivesElectric Rate
$0.16/kWh avg (varies by REP)
Solar Rebate
None
Battery Rebate
None
Buyback
Depends on your REP
Key fact: CenterPoint is delivery-only. No direct solar rebate. REP choice is everything.
Focus entirely on REP selection for solar buyback value
CenterPoint offers heat pump rebates by SEER2 tier ($120-$310/ton)
Consider solar + heat pump bundle to capture CenterPoint HP rebate
Houston gets excellent sun — 14,000+ kWh/year from a 9 kW system
San Antonio metro
ModerateElectric Rate
$0.125/kWh avg
Solar Rebate
Limited/varies
Battery Rebate
None specific
Buyback
CPS Rooftop Solar program
Key fact: Municipal utility. Separate solar interconnection program. No REP choice.
CPS Energy heat pump rebates: $130-$310/ton by SEER2 tier
Rooftop solar program has specific interconnection requirements
San Antonio electricity costs are low — longer payback but still positive ROI
CPS is one of largest municipals in the US — stable rates
This is the #1 decision that determines your ongoing solar savings in Texas. The wrong REP costs you $1,000+/year. Only applies to deregulated ERCOT areas (not Austin Energy or CPS Energy customers).
| REP | Buyback Type | Rate | Rating |
|---|---|---|---|
| TXU Solar Buyback | 1:1 credit | Same as retail | Excellent |
| Chariot Energy | 1:1 credit | Competitive | Excellent |
| Green Mountain Energy | Solar buyback | Near-retail | Very Good |
| Reliant Energy | Bill credit | Varies by plan | Good |
| Direct Energy | Bill credit | Varies by plan | Moderate |
| Generic REP (wholesale) | Wholesale | $0.03-$0.05/kWh | Terrible |
The math: Choosing the right REP is worth $1,030/year in this example — or $25,750 over 25 years. This single decision can be worth more than the lost federal ITC. NuWatt helps every Texas customer evaluate and select the best solar buyback plan for their production profile and consumption pattern.
The ITC is dead for cash and loan purchases. But Propel financing brings your Day 1 cost down to ~70% of system price — and you still own the system.
Propel is a Concert Loan + Prepaid ESA — NOT a PPA, NOT a lease
You own the system and keep all solar buyback credits
Propel Price = system cost x 0.70 (conservative 30% ITC captured through the financing structure)
A $19,440 system becomes ~$13,608 after the Propel reduction
Terms: 25 years / 8.99% APR / $0 dealer fee / 660 FICO minimum
Loan range: $10K-$135K
Requires FEOC-qualified panels — Silfab 440W is the standard choice
Why Propel is even more impactful in Texas: With TX install costs at $2.16/W (vs $3.05/W in ME), Propel brings the net cost even lower. A 9 kW system at $2.16/W = $19,440. After Propel's 30% reduction: ~$13,608 out of pocket. Combined with $2,160/year in solar value (with the right REP), payback on the Propel amount is approximately 6-7 years. Texas is one of only two Propel states (with Maine).
Here is what the full incentive stack looks like for a typical Texas homeowner in DFW, purchasing a 9 kW system with cash and choosing TXU Solar Buyback.
| Item | Value |
|---|---|
| Solar System (9 kW at $2.16/W) | $19,440 |
| Federal ITC (25D) | $0 |
| Sales Tax (8.25% — no exemption) | +$1,604 |
| Oncor Rebate (estimated) | -$1,500 |
| Net Out-of-Pocket Cost (Cash) | ~$19,544 |
| Net Cost with Propel Financing | ~$13,608 |
| Solar Buyback Credits (25 years) 9,360 kWh/yr exported at $0.15/kWh, 1:1 REP (TXU), 2% annual rate increase | ~$35,100 |
| Self-Consumption Savings (25 years) 5,040 kWh/yr self-consumed at $0.15/kWh rising 2%/yr | ~$24,200 |
| Property Tax Savings (permanent) $385/yr at 2.2% rate, 25-year system life | ~$9,625 |
| Section 30C EV Charger Credit If paired with Level 2 charger before June 30, 2026 | $1,000 |
| Total Lifetime Value (cash purchase, DFW) | $69,000+ |
Austin Energy
~7.5 yrs
Cash, $2,500 rebate, VOS $0.097/kWh
DFW (Oncor + TXU)
~9 yrs
Cash, 1:1 buyback, Oncor rebate
Houston (CenterPoint)
~10 yrs
Cash, 1:1 buyback, no utility rebate
Follow these steps in order. Each one builds on the previous. Skip none of them.
Texas utilities offer very different solar incentives. Austin Energy offers up to $2,500 solar + $2,500 battery rebates. Oncor offers $300-$3,500 (requires smart thermostat). CenterPoint and CPS Energy offer heat pump rebates but limited direct solar incentives. Deregulated ERCOT areas have no utility solar rebate at all. Know your territory first.
This is the #1 decision that determines your ongoing solar savings. Compare REP buyback rates: TXU Solar Buyback offers 1:1 credits, Chariot Energy offers competitive buyback, and Green Mountain Energy offers 100% clean energy buyback. Avoid REPs that only pay wholesale ($0.03-$0.05/kWh). The right REP is worth $1,000+/year more than the wrong one.
Request quotes from at least three NABCEP-certified solar installers, including NuWatt. Compare $/W pricing (Texas average: $2.16/W), panel tiers, and warranty terms. Ask each installer about utility rebate processing, REP buyback plan compatibility, and Propel financing eligibility.
Propel reduces your Day 1 cost to ~70% of system price (Concert Loan + Prepaid ESA). Compare this to cash purchase (best long-term ROI) and standard solar loan (6-8% APR). Propel requires FEOC-qualified Silfab 440W panels. Only available in TX and ME.
If you are in Austin Energy territory, apply for the solar rebate ($2,500 max) and battery rebate ($2,500 max) BEFORE installation. Oncor requires pre-approval and a mandatory smart thermostat. CPS Energy has specific SEER2 tier requirements for heat pump rebates. Each utility has different timelines and requirements.
Texas provides a 100% property tax exemption for solar system value statewide. With Texas property taxes averaging 2.2%, this saves $300-$500/year on a typical residential system. The exemption is automatic under Texas Tax Code Section 11.27 — but verify with your county appraisal district after installation.
The federal EV charger tax credit (Section 30C) is still active through June 30, 2026 — up to $1,000 for residential. This is the LAST federal energy credit available to Texas homeowners. Pair your solar installation with a Level 2 EV charger to capture this before it expires.
A typical Texas residential solar installation takes 1-2 days. Interconnection timelines vary by utility: Austin Energy (2-3 weeks), Oncor territory (3-6 weeks), CenterPoint (2-4 weeks). After PTO, monitor your buyback credits and consider switching REPs annually if better rates appear.
Ready to start with Step 1?
Get Your Free Solar QuoteWe see these mistakes constantly in Texas. The #1 mistake — choosing the wrong REP — costs more than the federal tax credit ever saved.
Cost: A wholesale-only REP pays $0.03-$0.05/kWh for exported solar. A 1:1 buyback REP pays $0.12-$0.15/kWh. On 9,360 kWh/year exported, the wrong REP costs you $1,030+/year — or $25,750 over 25 years. This is the MOST expensive mistake.
Fix: Before installation, research REPs with solar buyback plans. TXU Solar Buyback, Chariot Energy, and Green Mountain Energy offer the best rates. NuWatt helps every TX customer select the right REP.
Cost: Every month without solar means paying $150-$300+ to your REP. Texas electricity prices spike during summer heat events and winter storms. No legislation is pending to reinstate Section 25D.
Fix: Install now while Propel financing is available and Section 30C (EV charger) credit expires June 30, 2026. Texas install costs are at historic lows.
Cost: Austin Energy and Oncor require pre-approval BEFORE installation. If you install first, you lose the rebate entirely. Oncor has a strict 90-day deadline.
Fix: Work with your installer to submit rebate applications before scheduling installation. NuWatt handles all utility paperwork for TX customers.
Cost: Oncor requires a mandatory smart thermostat installation as a condition of their solar rebate ($300-$3,500). No thermostat = no rebate, even if everything else is approved.
Fix: Ask your installer about Oncor-compatible smart thermostats. A $200 thermostat unlocks up to $3,500 in rebates — obvious ROI.
Cost: You pay full price when Propel could reduce your Day 1 cost to ~70%. On a $19,440 system, that is ~$5,832 saved immediately.
Fix: Ask your installer about Propel eligibility. Texas is one of only two Propel states (with Maine). FICO 660+, Silfab 440W panels required.
Cost: Texas property tax exemption is statewide under Tax Code 11.27, but your county appraisal district must apply it. With TX property taxes at 2.2%, missing this costs $385+/year permanently.
Fix: Contact your county appraisal district within 60 days of installation. Bring your solar installation documentation. The exemption should be automatic but verify.
We serve both Texas and 8 New England/Mid-Atlantic states. Here is the honest side-by-side. Texas has fewer incentives but structural cost and production advantages.
| Category | Texas | New England (avg) |
|---|---|---|
| Federal ITC (25D) Dead in both | $0 | $0 |
| State Solar Rebate NE advantage: MA SMART, NJ ADI, RI REF | None | Varies ($0-$5,000+) |
| State Tax Credit NE advantage: MA $1K | None (no income tax) | $0-$1,000 |
| Net Metering NE advantage: guaranteed net metering | Voluntary by REP | 1:1 retail (mandated) |
| Sales Tax NE advantage: every NE state exempts solar | 8.25% (NOT exempt) | 0% (exempt) |
| Property Tax Exempt TX advantage: automatic statewide | 100% (statewide) | Varies by state |
| Install Cost/W TX advantage: $8K-$11K less on 9 kW | $2.16/W | $3.00-$3.40/W |
| Sun Hours/Year TX advantage: 30% more production | 1,800+ | 1,200-1,400 |
| Annual kWh (9 kW) TX advantage: more energy per panel | ~14,400 | ~10,800 |
| Propel Financing TX + ME only | Available (TX) | ME only |
| Cash Payback Comparable despite fewer incentives | ~9 years (DFW) | ~7.5-9 years |
| Battery Incentive Mixed — depends on utility/state | AE: $2,500; others: None | MA: $225-$275/kW |
Bottom line: New England has a stronger incentive stack with mandatory net metering, state rebates, sales tax exemptions, and production payments. But Texas compensates with installation costs that are 35-40% cheaper and 30% more sun. The result: payback periods are comparable (~9 years TX vs ~7.5-9 years NE). Texas homeowners who choose the right REP and use Propel financing can achieve economics that match or beat many New England states.
The residential 25D credit is dead. But the commercial 48/48E credit lives on — and there are two ways for Texas homeowners to benefit.
Deadline: Section 48/48E is available for projects that begin construction before July 4, 2026. After that date, the lease/PPA backdoor closes. Propel financing availability beyond 2026 depends on program continuation. If you are considering either path, act before summer 2026.
No. The federal residential solar Investment Tax Credit (Section 25D) expired on December 31, 2025. Texas homeowners who buy solar with cash or a loan receive $0 from the federal government in 2026. Many solar company websites still advertise a 30% federal credit — this is false and misleading.
No. Texas does not offer a state-level solar rebate, tax credit, or production incentive. Texas has no state income tax, so there is no state income tax credit either. The only programs available are utility-level rebates (Austin Energy, Oncor, CenterPoint, CPS Energy) and the statewide property tax exemption.
Texas homeowners can still access $10,000-$25,000+ in total incentive value over the system lifetime. This includes solar buyback credits ($500-$2,000/year with the right REP), property tax exemption ($300-$500/year), utility rebates ($0-$2,500+ depending on utility), and Propel financing that brings Day 1 cost to 70% of system price. The biggest variable is choosing the right REP for solar buyback.
A solar buyback plan is your Retail Electric Provider (REP) agreement that determines how much you get paid for excess solar electricity sent to the grid. Some REPs offer 1:1 buyback (TXU, Chariot, Green Mountain) — you get credited at the same rate you pay. Others offer wholesale rates ($0.03-$0.05/kWh), which is terrible. Choosing the right REP can be worth $1,000+/year in difference. NuWatt helps customers evaluate buyback plans.
Yes. Unlike New England states (MA, ME, CT, RI, NH) where solar is sales tax exempt, Texas charges the full 8.25% state and local sales tax on solar equipment and installation. On a $19,440 system (9 kW at $2.16/W), that adds approximately $1,604 to the cost. There is no sales tax exemption for solar in Texas.
Propel is a Concert Loan + Prepaid ESA that reduces your Day 1 solar cost to approximately 70% of the system price. It is NOT a PPA or lease — you own the system. Terms: 25-year, 8.99% APR, $0 dealer fee, 660 FICO minimum, $10K-$135K range. Propel requires FEOC-qualified panels (Silfab 440W).
Yes, and arguably more so than northern states because of two factors: (1) Texas solar costs are among the lowest in the nation at $2.16/W, and (2) Texas gets 20-30% more sun-hours than New England. A 9 kW system generates approximately 14,400 kWh/year in Texas vs 10,800 kWh in Maine. Combined with lower install costs, payback is competitive even without the ITC.
No. There is no legislation pending to reinstate Section 25D. Waiting costs you money: every month without solar means paying $150-$300+ to your REP at rates that fluctuate with ERCOT wholesale prices. Texas electricity rates spiked during Winter Storm Uri (2021) and Summer 2023 heat events. Solar with battery backup protects against both rate volatility and grid outages.
Every active program in one place
Complete REP buyback comparison
Best utility rebates in Texas
Honest math for 2026 TX solar
How Propel financing works in TX
Best financing path for 2026
DFW utility rebate details
Real pricing by city and utility
How the 100% exemption works
The federal credit is gone and Texas has no state rebate. But TX install costs are the lowest in the country, the sun shines 30% more than New England, and choosing the right REP + Propel financing makes the math work. Every month you wait, summer electricity spikes hit harder.
Free, no-obligation quote. Includes REP buyback evaluation, utility rebate processing, and Propel financing assessment.