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The federal tax credit is gone for homeowners. But Texas has the lowest solar costs in the US, 5.5+ peak sun hours, and 100% property tax exemption. Here is every incentive still available, what solar actually costs in your city, and whether it still pencils out — with real data, not marketing spin.
Important: The 30% federal solar tax credit (Section 25D) expired December 31, 2025.
Many websites still advertise this credit. Texas homeowners who buy solar with cash or a loan in 2026 receive $0 in federal tax credits. This guide reflects accurate 2026 incentives only. Learn what happened
Even without the federal tax credit, a typical 10kW solar system in Texas costs just $22,000 — the lowest in the US — and pays for itself in approximately 10 years. Austin Energy customers see payback in as little as 7 years thanks to the $2,500 rebate and Value of Solar tariff. Texas delivers 5.5+ peak sun hours per day, one of the best solar resources in the country. Add in the 100% property tax exemption that saves $9,000–$12,000 over 25 years, and solar in Texas still makes strong financial sense — with or without the federal credit.
Avg. System Cost
$22,000
10kW system
Payback Period
10 years
Cash purchase (avg TX)
25-Year Savings
$48,000+
Vs. utility bills
Peak Sun Hours
5.5 hrs/day
Among best in the US
No statewide solar rebate, no state income tax credit, and no federal credit for homeowners. But Texas still has strong local utility programs, the best property tax exemption in the US, and the lowest installation costs anywhere. Here is every program you can (and cannot) use in 2026.
$2,500 flat upfront rebate
Austin Energy provides a $2,500 flat rebate for residential solar systems. Applied at installation. Must be an Austin Energy customer. Subject to funding availability.
9.91¢/kWh export credit
Austin Energy credits exported solar at 9.91¢/kWh via the Value of Solar (VoS) tariff. This rate is locked for 10 years from installation. Much more predictable than REP buyback plans.
Residential rebates phasing out
CPS Energy is phasing out residential solar rebates. SolarHostSA program serves commercial customers only. San Antonio homeowners can still interconnect solar but receive no upfront rebate.
3¢–10¢/kWh from retail electric providers
In deregulated areas (85% of TX), choose a REP that offers a solar buyback plan. Chariot ~10¢, TXU retail-match, Green Mountain ~9.7¢, Rhythm ~9.5¢. Best buyback plan is your TX net metering equivalent.
100% exempt — Form 50-123 by April 30
Texas exempts 100% of solar system value from property tax (TX Tax Code §11.27). File Form 50-123 with your county appraisal district by April 30. A $22,000 system saves $9,000–$12,000 over 25 years.
$0 — Expired Dec 31, 2025
Section 25D expired under the OBBBA (signed July 4, 2025). Homeowners who purchase solar with cash or a loan receive $0 federal tax credit. Third-party owned systems (lease/PPA) still qualify for 30% under Section 48/48E.
$690M allocated — PENDING SECO launch
TX HEAR allocation: $690M. SECO (State Energy Conservation Office) still in RFP phase for third-party administrator. Not available for 2026 planning.
Key Insight for 2026
In Texas, the lease/PPA advantage is even larger than in other states. The third-party system owner still claims the 30% commercial ITC (Section 48/48E), and because TX installation costs are already the lowest in the US, the combination of low base cost plus the 30% credit makes lease/PPA payments extremely competitive — often lower than your current electric bill from day one. Compare cash vs. lease in TX
Texas solar costs are the lowest in the US — $1.85–$2.50/W installed depending on metro area, versus the national average of $2.75/W. This is your biggest advantage as a TX homeowner.
TX Average (Market Rate)
$2.20/watt
Before incentives, fully installed
NuWatt Pricing (TX)
$2.85/watt
Premium install, 25-yr warranty, monitoring
Typical 10kW System
$22,000
Range: $19,000–$25,000
Based on EnergySage and NuWatt installation data. Prices before incentives.
| City | Cost Range (/W) | Sun Hrs/Day | Local Incentive | Payback (yrs) |
|---|---|---|---|---|
| AustinBest Deal | $1.90–$2.40 | 5.5 | $2,500 + VoS 9.91¢ | 6–8 |
| Houston | $1.95–$2.50 | 5 | REP buyback only | 9–11 |
| Dallas | $1.90–$2.45 | 5.3 | REP buyback only | 9–11 |
| Fort Worth | $1.90–$2.45 | 5.3 | REP buyback only | 9–11 |
| San Antonio | $1.85–$2.40 | 5.4 | CPS (ending) | 9–12 |
| El Paso | $1.85–$2.35 | 6.4 | EP Electric buyback | 8–10 |
| Corpus Christi | $1.90–$2.45 | 5.3 | REP buyback only | 9–11 |
| McAllen | $1.90–$2.45 | 5.5 | REP buyback only | 9–11 |
| Lubbock | $1.85–$2.40 | 5.8 | LP&L buyback | 8–10 |
| Midland-Odessa | $1.85–$2.35 | 6 | REP buyback only | 8–10 |
| Waco | $1.90–$2.45 | 5.3 | REP buyback only | 9–11 |
| Amarillo | $1.85–$2.35 | 5.9 | REP buyback only | 8–10 |
Payback assumes 10kW system, cash purchase, average metro electric rate (12–16¢/kWh), 3%/year rate increase, 0.5%/year panel degradation, no federal credit (25D expired), and applicable local rebates. Actual payback varies by roof, shading, and system design.
Texas has no statewide net metering. Instead, in deregulated areas (~85% of the state), you choose a Retail Electric Provider (REP) that offers a solar buyback plan. Your buyback plan is the single most important decision affecting your solar ROI after system cost.
Houston, Dallas, Fort Worth, Corpus Christi, and most ERCOT areas. You choose your REP (Retail Electric Provider) and can switch for the best solar buyback plan.
Austin, San Antonio, Lubbock, El Paso, and smaller co-ops. You cannot choose your electric provider — the utility sets the buyback terms.
For deregulated areas only. Rates and availability subject to change.
| REP | Plan Name | Buyback Rate | Contract | Rollover | Service Areas |
|---|---|---|---|---|---|
| Chariot Energy | Solar Buyback 24 | ~10¢/kWh | 24 mo | Oncor, CenterPoint, AEP TX | |
| TXU Energy | Solar Buyback | Retail-match | 12–24 mo | Oncor | |
| Green Mountain | Pollution Free Solar Buyback | ~9.7¢/kWh | 12 mo | Oncor, CenterPoint | |
| Rhythm Energy | Solar Buyback | ~9.5¢/kWh | 24 mo | Oncor, CenterPoint | |
| Pulse Power | Solar Buyback | ~8¢/kWh | 12 mo | Oncor, CenterPoint, AEP TX |
= 100% renewable energy plan. Rates shown are approximate and may vary by TDU territory. Rollover = unused credits carry to next billing period.
This is Texas’s most valuable and underappreciated solar incentive. A $22,000 solar system saves $9,000–$12,000 in property taxes over 25 years. But you must file the form — it is not automatic.
Install Solar
Your system adds $22,000+ to your home value.
File Form 50-123
Submit to your county appraisal district. Available on your CAD website or in person.
Deadline: April 30
Must be filed by April 30 of the year following installation. Late filings may qualify for retroactive exemption.
Save for 25+ Years
100% of the solar value is exempt from property tax for the life of the system.
Range accounts for varying county tax rates (1.8%–2.5%) and potential rate increases over 25 years.
Deadline Reminder: April 30
You must file Form 50-123 with your county appraisal district by April 30 of the year after installation. If you installed solar in 2025, your deadline is April 30, 2026. Missing the deadline does not disqualify you permanently — you can file late for retroactive exemption, but you may lose one year of savings.
TX Tax Code §11.27 — Exemption for Solar or Wind-Powered Energy Devices
Complete property tax exemption guide + Form 50-123 walkthroughWith the federal ITC gone for homeowners, financing dynamics have shifted. Lease and PPA are more competitive than ever because the third-party system owner still captures the 30% commercial ITC (Section 48/48E), passing savings to you via lower monthly payments.
The ITC Advantage for Lease/PPA in Texas
When you lease solar or sign a PPA, the third-party system owner (the financing company, NOT the installer) claims the 30% ITC under Section 48/48E. On a $22,000 TX system, that is a $6,600 credit they receive — which gets passed to you as lower monthly payments. This credit is available for projects beginning construction before July 4, 2026. Homeowners who buy with cash or a loan receive $0.
Maximum long-term savings
Monthly Cost
$0/mo after payback
Payback
8–11 years (6–8 in Austin)
25-Year Savings
$48,000+
Federal ITC Access
No federal credit
Highest lifetime ROI
No interest payments
Full ownership from day 1
100% property tax exemption savings
$19,000–$25,000 upfront
No federal credit in 2026
$0 down with ownership
Monthly Cost
$120–$180/mo
Payback
10–13 years (with interest)
25-Year Savings
$35,000–$42,000
Federal ITC Access
No federal credit
$0 down available
You own the system
TX low costs = lower loan amount
Property tax exemption still applies
Interest adds 15–25% to total cost
No federal credit for cash/loan
Higher rates without ITC
Guaranteed savings, no upfront cost
Monthly Cost
$65–$120/mo
Payback
Savings from month 1
25-Year Savings
$25,000–$40,000
Federal ITC Access
30% ITC claimed by lessor
$0 down
Maintenance included
Lower payments (lessor captures 30% ITC)
Great in deregulated areas
Less total savings vs ownership
Lease escalator (1–3%/yr)
You do not own the system
Lowest possible locked rate
Monthly Cost
Pay per kWh produced
Payback
Savings from month 1
25-Year Savings
$20,000–$35,000
Federal ITC Access
30% ITC claimed by provider
$0 down
Pay only for power produced
Rate lower than utility
No system maintenance
Least total savings
Long contract (20–25 yr)
Not all REP areas eligible
Winter Storm Uri (February 2021) left 4.5 million Texas homes without power for days. Battery storage is no longer just about savings — it is about resilience. ERCOT is also launching new programs in 2026 that may reward distributed battery owners.
ERCOT is an isolated grid — no neighboring states to import power during emergencies. A 10–13.5kWh battery provides 8–16 hours of backup for essential loads (fridge, lights, internet, medical equipment, security system).
ERCOT is launching the Distributed Resource Registration System (DRRS) in 2026. This system will register residential batteries and solar, potentially enabling future demand response payments and grid services revenue for homeowners.
TX electricity prices spike during summer afternoon peaks (2–7 PM). With TOU-aware REP plans, store cheap solar energy during the day and discharge during expensive peak hours. Particularly valuable in Houston and Dallas where summer demand is extreme.
Installed Cost
$10,000–$16,000
After price drops
Outage Protection
8–16 hrs
Essential loads
Peak Shaving Value
$150–$400/yr
TOU rate arbitrage
DRRS Potential
TBD in 2026
New ERCOT program
Battery payback in TX is longer than in states with explicit battery incentives. The primary value proposition in Texas is grid resilience and peace of mind, followed by peak shaving and potential DRRS revenue. Complete ERCOT battery guide
Winter Storm Uri Legacy (February 2021)
4.5 million homes lost power. At least 246 people died. Natural gas infrastructure froze. ERCOT nearly collapsed. The TX grid has been hardened since, but it remains isolated. Battery backup with solar provides energy independence regardless of grid conditions — your panels charge your battery during the day, and your battery powers your home at night and during outages.
Select your metro area, adjust your system size and monthly bill, and see your estimated cost, payback period, and 25-year savings. All calculations reflect 2026 post-ITC reality — $0 federal credit for cash/loan purchases.
Estimate your solar cost, payback period, and 25-year savings for any major TX metro.
Federal Residential Solar Tax Credit (Section 25D) Expired
Homeowners who purchase solar with cash or a loan receive $0 in federal tax credits. Section 25D expired December 31, 2025.
CenterPoint delivery area. Deregulated — choose a solar buyback REP for best export value. High humidity reduces panel efficiency slightly. Strong solar irradiance despite cloud cover. Largest TX solar market by installed capacity.
Cost Range
$2.00–$2.40/W
Peak Sun Hours
5.3 hrs/day
Avg Electric Rate
$0.14/kWh
County Tax Rate
2.31%
Annual Production
15,476
kWh/year
Annual Savings
$1,800
per year
Payback Period
12.2
years
25-Year Savings
$65,627
total
Estimates based on average 2026 TX solar pricing, 5.3 peak sun hours/day, 0.5%/year panel degradation, 3%/year electricity rate increase, and TX property tax exemption (Tax Code §11.27). Actual costs vary by installer, roof condition, and system configuration. Section 25D residential ITC expired Dec 31, 2025 — $0 federal tax credit for cash/loan purchases.
Answers to the most common questions about going solar in Texas in 2026, including the federal tax credit expiration, buyback plans, battery storage, and financing.
Yes. Texas has the lowest solar installation costs in the US ($1.90-$2.50/W), 5.5+ peak sun hours, and 100% property tax exemption. A typical 10kW system costs $19,000-$25,000 and pays for itself in 8-11 years. Austin Energy customers see even faster payback (6-8 years) with the $2,500 rebate and Value of Solar tariff. While the federal 25D tax credit expired, TX's low costs and strong solar resource make it one of the best states for solar ROI.
The residential solar tax credit (Section 25D) expired December 31, 2025, under the OBBBA signed July 4, 2025. Texas homeowners who buy solar with cash or a loan in 2026 receive $0 in federal tax credits. However, lease/PPA systems still qualify for 30% under Section 48/48E because the third-party financing company claims the credit.
Texas has the lowest solar costs in the US. Average installed cost is $1.90-$2.50 per watt (market rate). For a typical 10kW system, that is $19,000-$25,000 before incentives. Austin Energy customers save $2,500 via rebate. All TX homeowners save $9,000-$12,000 over 25 years via the property tax exemption.
No. Texas has no statewide net metering mandate. Instead, in deregulated areas (~85% of TX), you choose a Retail Electric Provider (REP) that offers a solar buyback plan. Buyback rates range from 3¢ to retail-match depending on the REP. Austin Energy has its own Value of Solar tariff (9.91¢/kWh). CPS Energy offers avoided-cost buyback.
The best buyback plans in 2026 include Chariot Energy Solar Buyback 24 (~10¢/kWh, 24 months, rollover credits), TXU Solar Buyback (retail-match in some territories), and Green Mountain Pollution Free Solar Buyback (~9.7¢/kWh, 100% renewable). Availability depends on your delivery utility (TDU) — Oncor, CenterPoint, AEP Texas, or TNMP.
Texas exempts 100% of the added value of solar panels from property tax under TX Tax Code §11.27. You must file Form 50-123 with your county appraisal district by April 30. A $22,000 solar system would otherwise add ~$440-$550/year in property taxes — the exemption saves $9,000-$12,000 over 25 years.
With no federal tax credit for homeowner purchases, lease/PPA is increasingly attractive in TX because the third-party owner captures the 30% ITC under Section 48/48E, passing savings to you via lower monthly payments. However, cash/loan purchases still offer higher long-term ROI if you can afford the upfront cost — especially in Austin where the $2,500 rebate and VoS tariff apply.
Not required, but increasingly recommended. Winter Storm Uri (Feb 2021) showed TX grid vulnerability — 4.5M homes lost power. Battery backup provides energy security during outages. ERCOT is launching the DRRS (Distributed Resource Registration System) in 2026, which may provide additional revenue for battery owners. Typical cost: $10,000-$16,000 installed.
Austin Energy's Value of Solar (VoS) tariff credits solar owners 9.91¢/kWh for all electricity exported to the grid. Combined with the $2,500 upfront rebate, Austin has the best solar economics in Texas. The VoS rate is locked for 10 years from installation date. Austin Energy is a municipal utility — you cannot choose a separate REP.
CPS Energy is phasing out residential solar rebates. The SolarHostSA program serves commercial customers only. San Antonio homeowners can still interconnect solar and receive export credits at avoided-cost rates, but there is no upfront rebate available for new residential installations in 2026.
Payback varies by location: Austin 6-8 years (with $2,500 rebate + VoS), Dallas/Houston 9-11 years, El Paso 8-10 years (highest sun hours). These are cash purchase paybacks with no federal tax credit. Lease/PPA provides savings from month 1 with no payback period.
Most TX cities require a building permit and electrical permit. Permitting is typically fast (1-2 weeks). You also need interconnection approval from your utility or TDU. Austin Energy and CPS Energy have specific interconnection processes. Your installer typically handles all permitting and interconnection paperwork.
Deep dives into every aspect of going solar in Texas — buyback plans, utility programs, property tax, financing, batteries, and more.
Compare every REP solar buyback plan: rates, contracts, rollover credits, and TDU availability.
Read moreEnter your ZIP to find your TDU, utility type (deregulated vs regulated), and best solar buyback options.
Read more$2,500 rebate + 9.91¢/kWh Value of Solar. The best municipal solar deal in Texas.
Read moreCPS residential rebates phasing out. What San Antonio homeowners need to know in 2026.
Read more100% exemption under Tax Code §11.27. Form 50-123 guide, deadline, and dollar savings.
Read moreCompare every financing option after the ITC expiration. Lease/PPA gets 30% via 48/48E.
Read moreWinter Storm Uri lessons, DRRS 2026, battery sizing, and grid resilience for TX homeowners.
Read moreMetro-by-metro cost data: Houston, Dallas, Austin, San Antonio, El Paso, and more.
Read morePair solar with a heat pump for maximum electrification savings in TX’s cooling-dominant climate.
Read morePair solar with a heat pump for maximum electrification savings in Texas’s cooling-dominant climate.
Utility-specific rebates: Oncor $600/unit, Austin Energy ~$3K, CenterPoint SOP ~$500, CPS $100–$275/ton.
Read moreRegional pricing: Houston $5.4K, DFW $8.3K, Austin $7K, San Antonio $5.2K.
Read moreOne system replaces two: more efficient cooling + heating in a single unit.
Read moreTexas has the lowest solar costs in the US and 5.5+ peak sun hours. Get a personalized estimate based on your actual roof, metro area, and electric usage. No commitment, no sales pressure — just data.
Or call us: 781-235-8180
Pricing data: EnergySage Solar Marketplace (January 2026), NuWatt Energy internal installation data.
Utility data: Austin Energy solar programs (austinenergy.com), CPS Energy (cpsenergy.com), ERCOT (ercot.com).
Property tax: Texas Comptroller, TX Tax Code §11.27, Form 50-123.
Federal tax credit: OBBBA (signed July 4, 2025). Section 25D expired Dec 31, 2025. Section 48/48E remains available for third-party system owners beginning construction before July 4, 2026.
Solar buyback plans: REP websites, Power to Choose (powertochoose.org), verified February 2026.
Last updated: February 2026. Sources: Austin Energy, CPS Energy, TX Comptroller, ERCOT, EnergySage.