Loading NuWatt Energy...
We use your location to provide localized solar offers and incentives.
We serve MA, NH, CT, RI, ME, VT, NJ, PA, and TX
Loading NuWatt Energy...
Section 25D is dead — homeowners get $0 in federal tax credits for solar in 2026. But with a lease, PPA, or Propel, a third-party owner claims the 30% ITC under Section 48/48E. Texas offers the lowest install costs in the country ($2.35/W), abundant sunshine (5.0+ peak sun hours), and Propel is available for ownership at year 5.
$0.14/kWh
TX Avg Rate
$80–130/mo
Lease Range
$0.08–0.12/kWh
PPA Range
Jul 4, 2026
48/48E Deadline
What TX homeowners need to know in 60 seconds
Section 25D is dead. If you buy solar with cash or a loan in 2026, you receive $0 from the IRS. The residential solar tax credit expired December 31, 2025 and is not coming back.
But Section 48/48E is alive. When a third-party financing company owns the solar system on your roof via a lease, PPA, or Propel agreement, that company claims the 30% Investment Tax Credit. The savings flow to you as lower monthly payments — typically $80–130/mo for a lease or $0.08–0.12/kWh for a PPA.
Texas is unique: lowest costs, most sun, but lowest rates. At $2.35/W, Texas has the cheapest solar installations in the country. Combined with 5.0+ peak sun hours, systems produce abundantly. The honest challenge: at $0.14/kWh average, the savings margin is narrower than in high-rate Northeast states. The key advantage: you capture the 30% ITC through TPO that you would lose entirely buying on your own, and Propel gives you ownership at year 5.
The financing company claims the credit — not you, not the installer. Here is exactly how the 30% ITC flows from the tax code to your lower monthly payment.
A financing company (the "third-party owner") purchases and installs solar panels on your roof. You don't buy the system — you agree to either lease it (fixed monthly payment) or buy the power it produces (PPA, per-kWh rate).
Because the financing company legally owns the system, it files IRS Form 3468 and claims the 30% Investment Tax Credit under Section 48/48E. On a $30,000 system, that's $9,000 back from the IRS. The company also claims MACRS depreciation (5-year accelerated schedule + 20% bonus in 2026).
The financing company doesn't pocket the ITC — it uses the $9,000+ in tax benefits to reduce your monthly payment. This is why lease/PPA payments are typically 20–40% lower than what you'd pay on a standard solar loan without the ITC.
Your lease/PPA payment is locked in below your current electric bill rate. You save money starting month one. The system owner handles all maintenance, monitoring, and warranty claims.
With NuWatt's Propel program, the third-party owner transfers full ownership to you at year 5 — after the ITC recapture period expires. You get the best of both worlds: ITC savings upfront, full ownership long-term.
Propel IS available in Texas. After 5 years of third-party ownership (and ITC capture), full ownership transfers to you at no additional cost.
The financing company claims the ITC on IRS Form 3468 — not you, not the installer. This is the intended design of the tax code. The company also claims MACRS depreciation (5-year schedule + 20% bonus in 2026). These combined tax benefits are what allow your lease or PPA payment to be 20–40% lower than a standard solar loan without any ITC. In Texas, Propel takes this a step further — you get the ITC savings AND full ownership at year 5.
The investment tax credit that keeps solar leases, PPAs, and Propel financially viable in 2026.
Credit Rate
30%
With prevailing wage + apprenticeship compliance (6% without)
Who Claims It
The system owner (financing company)
NOT the homeowner, NOT the installer
Residential Eligibility
Yes — via third-party ownership
TPO company owns the system, leases/PPAs it to you
Construction Deadline
Begin construction before July 4, 2026
OBBBA sunset — projects must start before this date
Minimum Hold Period
5 years
System owner must hold for 5 years or face ITC recapture
Stackable Bonuses
Domestic content (+10%), Energy community (+10%)
Can reach 50%+ total credit on qualifying projects
MACRS Depreciation
5-year schedule + 20% bonus (2026)
Additional tax benefit for the system owner
US-manufactured panels, inverters, racking
Large portions of TX qualify (oil/gas counties)
Texas has significant energy community bonus potential — many counties qualify due to historical oil and gas employment. Your lease/PPA/Propel provider will confirm which adders apply to your specific installation and location.
Aug 2022
IRA signed — Section 48E created alongside Section 25D extension
Dec 2025
Section 25D (residential ITC) expires — homeowners get $0
Jan 2026
Section 48/48E remains available for commercial + third-party owners
Jul 4, 2026
OBBBA deadline — must begin construction before this date
Side-by-side comparison for a typical 10 kW system at $2.35/W = $23,500 in Texas.
Upfront Cost
$23,500
Federal ITC
$0 (25D expired)
Monthly Payment
$0
Est. Payback
~14 years
You Own?
Yes, immediately
Longer payback at TX rates ($0.14/kWh). $23,500 upfront with zero federal credit.
Upfront Cost
$0 down
Federal ITC
$0 (25D expired)
Monthly Payment
$140–$220/mo
Interest Rate
6–8% APR
You Own?
Yes, immediately
At TX rates, loan payment may EXCEED utility bill savings. No ITC to offset interest costs.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Monthly Payment
$80–130/mo
Maintenance
Included
You Own?
No (buyout option)
$0 down, ITC lowers payment. Watch for 1–3% escalator — can erode savings at TX rates. Consider Propel first.
Upfront Cost
$0 down
Federal ITC
30% (owner claims)
Payment
Fixed 25-yr loan
Ownership
Yours at year 5
Maintenance
Free for 5 years
Best of both worlds: 30% ITC baked in, fixed payment (no escalator), and full ownership at year 5. The strongest option for qualified TX homeowners.
NuWatt's Propel program is available in Texas (and Maine). A third-party owner holds the system for years 1–5, claims the 30% ITC, and then transfers full ownership to you at $0 additional cost. Unlike a standard lease, your payment is fixed for 25 years with no escalator. After year 5, you own the system outright with 20+ years of remaining life. In Texas's deregulated market, this ownership gives you full control to switch REPs and chase the best buyback rates. Standard leases and PPAs remain available for homeowners who do not qualify for Propel.
Both capture the 30% ITC through third-party ownership, but the similarities end there. Here is how Propel compares to a traditional solar lease or PPA in Texas.
Propel
RecommendedStandard Lease / PPA
Fixed for 25 years
No escalator, ever
Typically escalates
1–3% annual increase common
Yours at year 5
Automatic transfer, $0 buyout
Never (or expensive buyout)
Fair market value buyout at end of term
Yes — baked into pricing
Yes — baked into pricing
Free for 5 years
Then yours (25-yr warranty covers panels)
Included full term
20–25 year coverage
After yr 5: yours to keep
Adds home value, no transfer hassle
Buyer must assume lease
Can complicate or delay sale
Full control after yr 5
Switch REPs freely, choose best buyback
May restrict REP changes
Lease terms may limit switching
Propel gives you the ITC advantage of a lease with the long-term value of ownership. Your payment is fixed — no 1–3% annual escalator eating into your savings. At year 5, the system is yours with 20+ years of remaining life and full warranty coverage. If you qualify, Propel is the strongest path. Standard leases and PPAs remain solid alternatives for homeowners who do not meet Propel's credit or qualification requirements.
Texas's deregulated electricity market creates unique challenges for solar financing. Here is why Propel is especially well-suited for ERCOT territory.
Texas has no statewide net metering law. In ERCOT's deregulated market, your Retail Electric Provider (REP) sets buyback rates — typically 3–10¢/kWh, far below your retail rate. With a standard lease, you are locked in for 20–25 years while REP buyback terms can change at contract renewal. With Propel, you own the system at year 5 and can freely switch REPs to chase the best solar buyback plan.
Texas electricity averages $0.14/kWh — among the lowest in the country. A standard lease with a 2% annual escalator means your solar payment grows every year. If TX rates stay flat (as they have historically), your lease payment can eventually exceed your utility bill. Propel's fixed payment eliminates this crossover risk entirely.
Texans move frequently — average homeownership is 7–8 years. Selling a home with a 20-year lease attached requires the buyer to assume the agreement or you to buy it out (often $10,000+). With Propel, if you sell after year 5, the system is already yours. It adds home value with zero transfer complications.
Austin Energy, CPS Energy (San Antonio), and other municipal utilities have their own solar buyback rules that change periodically. Austin's Value of Solar rate has dropped from 12.8¢ to 9.91¢/kWh over recent years. With Propel, you own at year 5 and are not trapped in a lease structure designed around a buyback rate that may shrink further.
In a market where buyback rates are uncertain, REPs change terms at renewal, and electricity costs are already low, Propel is the strongest TPO path for qualified homeowners. You capture the 30% ITC, lock in a fixed payment with no escalator, and take full ownership at year 5 — giving you control over your REP choice, buyback plan, and energy future.
If you do not qualify for Propel, a standard solar lease or PPA is still better than buying with cash or a loan in 2026 (since you would get $0 ITC). Just watch for escalator clauses and understand the buyback terms in your REP territory.
Texas has different strengths than Northeast states. Here is what works in your favor.
Texas has the lowest solar installation costs in the country. A 10 kW system at $2.35/W costs $23,500 — compared to $25,200 in CT or $26,000 in MA. Lower system costs mean the TPO provider can offer you lower monthly payments and still maintain healthy margins.
Texas gets more sunshine than any other major solar market. A 10 kW system in DFW or Austin produces 14,000–16,000 kWh per year — 30–40% more than the same system in New England. More production means more value from your lease or PPA.
Propel is available in Texas. A third-party owner holds the system for 5 years, captures the 30% ITC and MACRS depreciation, then transfers ownership to you at no additional cost. You get the best of both worlds: ITC savings AND eventual full ownership with 20+ years of remaining system life.
Texas Tax Code §11.27 exempts the added value of solar systems from property tax statewide — no municipal opt-in required. Given Texas's notoriously high property tax rates (averaging 1.8%), this exemption saves hundreds of dollars annually on a system that adds $15,000–$20,000 in home value.
We believe in full transparency. Here is what works against TPO in Texas.
Low electric rates ($0.14/kWh average) mean NARROWER savings margin — honest assessment: TPO saves less in TX than in high-rate states
No statewide net metering — export value depends on your REP solar buyback plan (3¢–10¢/kWh)
No state sales tax exemption — adds 6.25% to total system cost
Deregulated ERCOT market means rate volatility — your savings projection depends on which REP you choose
Solar buyback rates have been declining across ERCOT REPs
Typical 2–3% annual lease escalator may outpace TX's historically low rate increases
Outside Austin Energy territory, no municipal rebates exist
Texas has no statewide net metering mandate. In the deregulated ERCOT market, your Retail Electric Provider (REP) may offer solar buyback plans that credit exported power at 3¢–10¢/kWh. Some REPs offer 1:1 solar buyback at your retail rate, but these plans are becoming less common. Austin Energy (municipal utility, not in ERCOT) offers a Value of Solar rate at 9.91¢/kWh. CPS Energy (San Antonio) is phasing down its buyback rate. Your TPO/Propel provider should help you select the best REP and buyback plan for your situation.
The best option depends on your credit, tax situation, and energy goals.
Compare My OptionsThese deadlines determine whether your TPO/Propel provider can claim the ITC for your TX project.
July 4, 2026
The One Big Beautiful Bill Act (OBBBA) requires projects to begin construction before July 4, 2026 to qualify for Section 48/48E. After this date, the 30% ITC for third-party solar owners may be eliminated or significantly reduced.
June 30, 2026
If bundling solar + EV charger, the $1,000 EV charger credit (Section 30C) expires June 30, 2026.
2027
The 20% bonus depreciation available in 2026 drops to 0% in 2027, reducing the TPO company's tax benefit and potentially increasing your lease/PPA payments.
TX permitting is generally fast (2–4 weeks), but for Propel especially, start the process by spring 2026 to ensure interconnection and construction-start are completed before the deadline.
Research
You just did this
Calculate
See your savings
Save
Lock in your price
You've done the reading. Now see how the numbers look for your specific zip code and utility bill.
Calculate My SavingsTalk to an expertNo credit card required. 100% free. Takes about 2 minutes.
Straight answers to the most common Texas solar financing questions in 2026.
Not directly as a homeowner. Section 25D expired December 31, 2025 — cash or loan buyers receive $0 from the IRS. Through a solar lease, PPA, or Propel agreement, the third-party financing company claims the 30% ITC under Section 48/48E and passes savings to you as lower monthly payments.
It depends on your rate. At the statewide average of $0.14/kWh, the savings margin is narrower than in high-rate states. A PPA at $0.08–0.12/kWh saves $0.02–0.06 per kWh — meaningful over 25 years but not dramatic. However, many Texas homeowners pay $0.15–0.18/kWh on fixed plans, which improves the economics. The key advantage: you get solar with $0 down and the TPO company captures the 30% ITC that you would otherwise lose entirely.
Texas does not have statewide net metering. In the deregulated ERCOT market, your Retail Electric Provider (REP) may offer a solar buyback plan that credits exported power at 3¢–10¢/kWh. Austin Energy offers a Value of Solar rate at 9.91¢/kWh. CPS Energy is phasing down its buyback rate annually. Your TPO provider should help you select the best REP and buyback plan for your situation.
Yes — Texas is one of two states where NuWatt's Propel program is available (the other is Maine). Propel works like this: a third-party owner holds your solar system for years 1–5 and captures the 30% Section 48/48E ITC. You make fixed monthly payments through a 25-year loan with Concert Finance. At year 5, full ownership transfers to you. You get ITC savings, $0 down, free maintenance for 5 years, and eventual full ownership.
No. Austin Energy requires the homeowner to own the solar system to qualify for the $2,500 rebate. Leased systems, PPAs, and Propel (TPO) arrangements are not eligible. If you're in Austin Energy territory, you can still benefit from Propel's Section 48 ITC pass-through savings (~30% built-in discount), which more than compensates for the rebate. Alternatively, if you prefer direct ownership, a cash purchase qualifies for the Austin rebate.
Solar buyback rates vary by REP and change frequently. Some REPs offer 1:1 solar buyback plans at your retail rate, while others pay wholesale (3¢–5¢/kWh). Popular options include Green Mountain, TXU Solar Buyback, and Chariot. Your TPO provider should help you compare plans. Note: buyback rates have been declining across ERCOT, so lock in favorable terms early.
You can transfer the lease to the new homeowner (2–4 week process) or buy out the remaining balance. With Propel, if you sell after year 5, you fully own the system and it conveys with the home. Texas's 100% property tax exemption means the system adds home value without increasing taxes.
The critical deadline is July 4, 2026. The third-party system owner must begin construction before this date to claim the Section 48/48E 30% ITC. For Propel specifically, this deadline is essential because the financial model depends on the ITC. Texas permitting is generally fast (2–4 weeks), but start by spring 2026 to ensure interconnection is completed.