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Make the switch to solar power in Texas

The largest continental state by land mass and second by population, Texas has a go big-or-go-home vibe. Texans have an independent bent in their blood.

According to the U.S. Energy Information Administration (EIA), Texas leads the nation in energy consumption, accounting for more than one-eighth of the U.S. total. The EIA reports that residents in Texas have some of the largest solar power potential in the country.

So it’s only natural that Texans have been at the forefront when it comes to the solar revolution, seeking independence from skyrocketing energy prices.

Federal solar utility incentives

Let’s start with the federal incentives. The Solar Investment Tax Credit (ITC) is a federal tax credit that is a dollar for dollar reduction on income taxes. It’s a step-down plan, so now through December of 2020, the credit is 26%.

Starting the 1st of 2021, however, the credit decreases to 22%, and then to 10% for any completed commercial project in 2022 and to 0% for residential projects. The sooner you act, the more money you will save. The following expenses are also included:

  • Solar PV panels or PV cells used to power an attic fan (but not the fan itself)
  • Contractor labor costs for onsite preparation, assembly, or original installation, including permitting fees, inspection costs, and developer fees, balance-of-system equipment, including wiring, inverters, and mounting equipment
  • Energy storage devices that are charged exclusively by the associated solar PV panels, even if the storage is placed in service in a subsequent tax year to when the solar energy system is installed (however, the energy storage devices are still subject to the installation date requirements)
  • Sales taxes on eligible expenses

The state of Texas does not offer a statewide solar tax credit, but most local utilities do offer incentives to go solar, add battery backup, or to make home improvements related to energy efficiency (check this website for detailed information).

The structure and availability of rebates vary across the state, but most utilities offer rebates to homeowners and business owners on a price-per-watt basis that is capped at a maximum amount per project. The funds may be available in perpetuity or released on a periodic (e.g. annual) basis for residential and/or commercial solar installations.

The utilities have an application process for each project, which NuWatt Energy will manage for you.

Local solar incentives & rebates

There are plenty of local utilities offering solar rebates all across the Lone Star State. Here are a few of them.

American Electric Power (AEP)

AEP serves a multitude of cities in Texas including Corpus Christi, Abilene, McAllen, Harlingen, San Angelo, and others. In 2020, AEP is offering a single rebate program for both North and South territories. The residential rebate value is $0.50 per watt, up to a $5,000 limit.

The commercial rebate is $0.50 per watt up to 25 kW and $0.25 per watt for any capacity exceeding 25 kW. The commercial rebate cannot exceed $56,250 (200 kWdc) in AEP Texas Central and $31,250 max (100 kWdc) in AEP Texas North, and there is a bonus of $0.10/Wdc in effect for commercial projects that are installed with and the final application submitted by June 30.

AEP operates in a competitive electricity market, so a net metering program would be handled by your retail electric provider (REP), if available. More incentives can be found on their website.

Austin Energy

The Austin solar rebate helps homeowners in the Austin area who want to make the switch to solar. Austin Energy is currently offering a flat $2,500 solar rebate just by participating in an educational course about solar. It’s a great way to learn the nuts and bolts of solar on the ground in your city, and earn some easy cashback when you get your solar panels installed.

You’re also eligible for their Value of Solar (VoS) rate tariffs. This credits you $0.097 per kilowatt-hour generated by your solar panels on your electric bill.

Commercial net metering is available for systems under 20 kW-AC. Austin Energy also offers a community solar option for residential customers and a “Green Choice Plan”, which are both great options for those that do not own their home but want to use clean electricity. More info about the City of Austin solar rebate can be found here.

CenterPoint Energy

CenterPoint serves the Houston area. They do not offer a solar rebate. However, they do offer rebates to home builders, with more info here.

Coleman County Electric Cooperative

Coleman County Electric Co-op does not offer a solar rebate but does offer a solar buyback for systems up to 10 kW in size. For systems above 10 kW, CCEC offers a bill credit at the retail rate for solar energy generation.

CoServ Electric

CoServ serves Northern Texas and offers a periodic post-installation solar rebate on residential and commercial systems that is available from the announced start date until funds are depleted.

The first 4kW DC is rebated at $0.40 per watt, $0.30 per watt on the portion of the system between 4kW and 7kW, and $0.20 per watt between 7kW and 10kW. The rebate is capped at $3,100 per system.

A commercial rebate of $300 per kilowatt for the first 100 kW DC, capped at $30,000, is also currently available. CoServ offers net metering for systems up to 50kW. You can learn more from CoServ here.

CPS Energy solar voltaics (PV) rebates

CPS serves the San Antonio area. There is an up-front solar rebate available for residential and commercial projects.

Solar rebates through CPS offer between $1500 and $2500 depending on when you take advantage of the incentive—the sooner the better, as funding decreases will mean a reduction in the rebate amount.

The commercial solar rebate remains at $0.60/watt up to $80,000. Funds for both rebates are limited and available on a first-come, first-serve basis. There are some requirements, which can be found here.

Denton Municipal Electric

Denton offers free energy audits and energy efficiency rebates as well as a solar incentive. The solar rebate varies between $0.40 and $0.80 per watt depending on the system size, up to $30,000 and not to exceed 50% of the total installation cost.

If the solar project includes battery storage, the rebate increases to between $0.60 and $1.20 per watt. The funds are limited, and the rebate is renewed each October.

Engie Resources

Engie is a commercial retailer based in Houston. No solar rebates are offered currently, but they do offer renewable energy certificates.

Farmers Electric Cooperative

Farmers Electric Cooperative, which serves almost 50,000 members across 12 counties in North Texas, offers a $500 rebate for renewable energy distributed generation systems up to 50 kW in size.

The co-op also offers rebates for home energy efficiency improvements ranging from insulation to geothermal heat pumps. Learn more about the rebate requirements from Farmers Electric here.

Garland Power & Light

GP&L offers bill credits for those who install solar. The solar rebate of $0.75 per watt, up to $5,000 per system, is renewed every October and available until that year’s funds runs out. Check back here for updated information.

Greenville Electric Utility System

Greenville does not offer solar rebates, but they do participate in net metering. Click here for more info.

Heart of Texas Electric Cooperative

This co-op does offer multiple energy efficiency rebates, including a solar rebate of $0.10 per watt on the solar installation. This rebate maxes out at $500 per member.

HILCO Electric Cooperative

HILCO offers several rebates, including a solar installation rebate. Members who install solar are eligible to receive $200 per kW, with a maximum of $1,000 per member. Click here for more information.

Mid-South Synergy

Mid-South, a cooperative based in Navasota, offers a solar rebate on 20% of total construction costs up to $2,000, as well as home improvement and energy efficiency rebates. More info can be found here.

Navarro County Electric Cooperative

Navarro’s rebate programs have expired, and funds are no longer available. Check back here for updated information. The co-op does offer a dollar-for-dollar solar buyback, but those credits do not roll over from month to month.

Navasota Valley Electric Cooperative

Navasota does not offer solar rebates but does offer net metering. More information on their distributed generation policies can be found here.

New Braunfels Utility (NBU)

New Braunfels Utility offers energy efficiency, water conservation, and solar rebates. NBU pays the solar rebate of up to $3,000 as a bill credit after system inspection.

Oncor Electric Delivery

If you get your power from Oncor, you can receive a residential solar rebate of about $538 per kilowatt hour for your solar panels. You’re also eligible for a credit similar to net metering. Oncor’s territory covers much of the Dallas-Fort Worth metroplex, the I-35 corridor from DFW to the northern Austin suburbs, and other parts of North and West Texas.

The rebate is calculated for each system using Oncor’s calculator, but could be as high as $5,000 for a 7.2-kilowatt SunPower system on a Dallas house that is ideally suited for solar. The solar rebate is renewed annually at the beginning of the year and tends to run out within a few months.

Oncor also offers rebates for commercial solar projects and home energy efficiency projects.

Pedernales Electric Cooperative

PEC operates in the Hill Country. They do not offer solar rebates, but do participate in net metering. Find info here.

Taylor Electric Cooperative

Taylor Electric does not currently offer a solar rebate but does have rebates for energy efficiency improvements which you can learn more about here. The co-op offers a dollar-for-dollar solar buyback, but those credits do not roll over from month to month.

Texas New Mexico Power

TNMP operates in several areas of Texas. They do offer energy efficiency rebates, but none specific to solar power. Check here for more details.

Tri-County Electric Cooperative

This co-op in the Dallas Fort Worth area has a water heater rebate program but not a solar power rebate. Tri-County offers a dollar-for-dollar solar buyback, but those credits do not roll over from month to month. Learn more about the program from Tri-County here.

More solar incentives for Texans

Homeowner property tax exemption

Installing solar is a huge improvement to your home and it increases your home’s value. This is great news especially if you’re looking to sell your house in the next few years. But if you got those solar panels so that you could enjoy the energy savings of solar for years to come, you might also be looking at an increase in property taxes with that bump up in value.

If you live in Texas, however, having solar installed won’t cost you any extra in local property taxes. That’s because solar is one of the ways you become eligible for exemption.

Net metering through utilities

Some utilities offer a solar rebate, and others participate in net metering. Net metering is a billing arrangement between the property owner and the utility company that allows overproduced energy to be sold back to the grid. This money usually is applied as a credit in the next billing cycle. Net metering may only be available to specific customers, so we recommend calling your provider to ask if they participate.

In competitive (deregulated) electricity markets across Texas, solar rebates and net metering (or solar buyback programs) may be available through your Retail Electric Provider (REP). For example, solar buyback programs are available from TXU, Reliant, and Green Mountain. There are hundreds of REPs operating in Texas, so check with your preferred company to ask about their solar program.

Solar rights laws with HOAs

If you live in a Texas community where homeowners’ associations (HOAs) rule the roost, you have protection from restrictions or halting of your solar install. Although HOAs still retain the right to prohibit solar installation if it’s outright dangerous, and a few other restrictions, you probably wouldn’t want that kind of solar anyway.

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