Texas Solar Incentives 2026: Rebates, Tax Exemption, New Law

Texas solar incentives in 2026 are a property-tax exemption on the value solar adds to your home, utility rebates in a few territories (Austin Energy pays $4,000; Oncor runs a production-based, installer-paid program; AEP Texas and New Braunfels Utilities pay up to $3,000, all budget-limited), and buyback plans that pay for exported power. There is no state tax credit, state rebate or sales-tax exemption, and the 30% federal credit ended for installs completed after December 31, 2025.

Texas also has something most incentive pages skip: a state solar-sales law (SB 1036) that, for contracts signed on or after September 1, 2025, gives you five business days to cancel a residential solar purchase, lease or PPA — and that now requires solar retailers and salespeople to register with the state (the registration deadline was extended to November 1, 2026).

That makes Texas simpler than California or New York — fewer programs to stack, and fewer to get wrong. But the programs that exist have rules that decide whether you see the money at all. Oncor pays your installer, not you. Austin requires a confirmation letter before installation. The property-tax exemption is not automatic. Below is what each one is worth, who receives it, what the new consumer-protection law changes, and the five lines to check in a Texas quote before you sign.

Texas solar incentives 2026 at a glance

Does Texas have a solar tax credit or state rebate in 2026?

No. Texas has no personal income tax, so there is nothing for a state solar credit to offset. The Public Utility Commission of Texas puts it bluntly in its March 2026 Solar Guide for Consumers, listing it under "common myths": "The State of Texas does not offer grants or rebates for installing solar panels."

There is also no sales-tax exemption for a residential solar purchase. Texas charges its 6.25% state sales tax plus up to 2% local, and there is no residential solar exemption. On a $25,000 system that is real money, so ask whether the quoted price includes sales tax on the equipment.

So if a Texas proposal shows a line called "state tax credit," "Texas rebate" or "state incentive," ask what statute or program it refers to. In practice that line tends to be one of three things: the expired federal credit relabelled, a utility rebate that the installer is applying for on its own behalf, or nothing at all.

How does the Texas solar property-tax exemption work?

This is the one statewide incentive, and it is worth more than it looks. Texas Tax Code §11.27 exempts from property tax the amount of appraised value that arises from installing a solar or wind-powered energy device used primarily to produce energy for on-site use. In plain terms: your appraisal district cannot raise your taxable value because you added solar.

Three things to know:

• It is not automatic. The Comptroller's guidelines say so directly: "These exemptions are not automatic. Property owners must file applications for the appraised value of this type of property to be exempt." You file Form 50-123, Exemption Application for Solar or Wind Powered Energy Devices, with the chief appraiser of the county appraisal district where the home is. The deadline is April 30 of the tax year (the chief appraiser can extend it up to 60 days for good cause). Once granted, you do not refile each year; the exemption stays until the property changes ownership or you stop qualifying (a chief appraiser can ask you to file a new application to confirm you still qualify).
• It covers leased systems too. Subsection (a-1) extends the exemption to the owner of the device whether or not they own the real property — so a leasing company's panels on your roof are exempt in the same way. What you should confirm is who is filing the form. On a lease or PPA, that is usually the provider; ask.
• What it is worth. Texas property taxes are high — the Tax Foundation puts the effective rate on owner-occupied housing at about 1.4%. If an appraiser attributed $25,000 of value to a system, the exemption saves roughly $350 a year at that rate, more in high-rate districts, for as long as you own the home.

One quote-review note: this exemption means solar does not cost you property tax; it does not lower your bill. A proposal that shows it as year-one cash flow is counting the absence of a new tax as income.

Which Texas utilities pay a solar rebate in 2026?

Texas is a patchwork. Whether you get a rebate depends entirely on who delivers your power, and the biggest cities are split: Austin (municipal utility) pays a large one, San Antonio (municipal) pays none, and Dallas–Fort Worth (Oncor, the poles-and-wires utility in the deregulated market) runs an installer-paid program with a mandatory battery. We did not find a residential solar rebate for CenterPoint (Houston) or TNMP customers as of this writing; check the utility's energy-efficiency program page before a quote counts on one.

Austin Energy solar rebate: $4,000, the largest flat rebate we verified

Austin Energy raised its residential solar rebate from $2,500 to $4,000 per project on July 1, 2026. The conditions matter as much as the amount:

• The system must be at least 3 kW and "mostly free of shading."
• You must complete Austin Energy's Solar Rebate Quiz and receive a rebate confirmation letter before installation. A system installed before that letter exists does not get the rebate.
• The installer must be an Austin Energy Participating Contractor.
• Third-party power purchase agreements (PPAs) are not allowed in Austin Energy's service territory. You can own the system outright or finance it with a loan; a "$0-down PPA" pitch anywhere in Austin Energy's territory should stop the conversation.

On top of the rebate, Austin Energy does not net-meter. Every kWh your system produces is credited at the Value of Solar rate — 9.91¢ per kWh in 2026 — and every kWh you draw from the grid is billed at the standard residential rate; unused credits roll to the next month. The rate is updated every three years, so a 25-year proposal that holds 9.91¢ flat, or escalates it, is guessing.

Oncor solar rebate (Dallas–Fort Worth): paid to your installer, battery required

Oncor's Residential Solar Program is easy to misdescribe in a DFW quote, so it is worth being precise. It is a standard-offer program under the PUCT's energy-efficiency rules — meaning Oncor pays a formula-based incentive to an approved installer ("service provider") for each qualifying project, not to you. Whether the incentive lowers your price depends on whether the installer passes it through, and by how much.

The rules from Oncor's program manual that decide eligibility:

• The home must be on an Oncor residential rate with a permanent meter, and have no existing solar or battery.
• Residential systems must be between 3 kW and 15 kW DC, with the array facing roughly east through south to west, verified by Oncor inspection.
• A battery is a mandatory qualifier. Since September 2021, Oncor has required energy storage on every incentivized residential system. The battery itself is not incentivized; it is the price of admission. It must be charged by the solar it is installed with and sit outside the living space (garage, exterior wall, shed).
• Funds must be reserved before construction starts. The installer applies through Oncor's contractor portal (EEPM); the project gets a reservation for a specific kW, kWh and dollar amount, and that reservation is the maximum it can receive. A system built before approval is not eligible.
• The incentive is calculated from a standard production model (PVWatts), not a flat $/watt, and is capped at 50% of total project cost. In 2024 the whole residential budget was about $1.35 million, first-come, first-served, with no single installer allowed more than 15% of it.
• Work must be completed within the program-year production period — in the 2024 manual, 5 p.m. on November 30, 2024 or whenever funds were exhausted, whichever came first. Oncor re-sets budgets, caps and dates each program year, so ask the installer for the current-year manual.

Practical translation for a DFW quote: ask the installer for the EEPM reservation number and the reserved dollar amount, and ask to see that amount as a credit line on your contract. Round numbers you see advertised for this program are estimates; the number that matters is the one on your reservation.

AEP Texas SMART Source solar rebate (Corpus Christi, Rio Grande Valley, Abilene, San Angelo)

AEP Texas runs a similar installer-applied program in its Central and North service areas. The tiers posted for program year 2024 are $0.50 per watt DC for systems under 3 kW, then flat amounts of $1,500 (3–4.999 kW), $2,250 (5–7.499 kW) and $3,000 (7.5–30 kW). Only enrolled installers can apply, and the annual budget is small (a few hundred thousand dollars per service area), so once it is gone, it is gone until the next program year. Treat any AEP rebate in a quote as conditional until the installer shows you a funding commitment.

New Braunfels Utilities: up to $3,000

NBU offers up to $3,000 for a residential system installed by a contractor on its Participating Solar Contractor list, after you complete its customer-education steps. Funds are first-come, first-served and are not reserved during the interconnection process, so the rebate is not certain until it is approved. Smaller municipal utilities and co-ops occasionally run programs of their own, and they open and close with the budget — Denton's GreenSense efficiency incentives, for example, are closed for the 2025–26 fiscal year and due to reopen October 1, 2026 subject to budget, and it is not clear solar is even covered. If your quote shows a local rebate, ask for the program name, the current program-year status and who receives the payment.

CPS Energy (San Antonio): none since 2022

CPS Energy stopped accepting residential solar rebate applications on December 16, 2022 and has not replaced the program. Its current solar incentives are for commercial and nonprofit customers only. A San Antonio quote that lists a "CPS rebate" on a home is describing a program that ended nearly four years ago.

Are solar buyback plans a Texas incentive?

They are the biggest variable in Texas solar economics, but they are not an incentive in the rebate sense — no one pays you to install; you get paid per kWh for what you export. Texas has no statewide net-metering law. In the deregulated (ERCOT) market — Oncor, CenterPoint, AEP Texas and TNMP areas — your retail electric provider sets the buyback rate in your plan, and it ranges from full retail credit with a monthly cap to a few cents per kWh at wholesale. Municipal utilities and co-ops set their own. We covered the plan types, the rate-cap and rollover traps, and how the buyback rule should change your system size in the Texas solar buyback guide.

For a quote, the buyback rate matters more than any rebate above. A $4,000 rebate is a one-time number; a buyback plan that credits exports at 3¢ instead of 15¢ changes the value of every surplus kWh for 25 years.

Is the federal solar tax credit still available in Texas in 2026?

Not to homeowners. The 30% residential clean-energy credit (§25D) ended for systems whose installation was completed after December 31, 2025. A cash or loan purchase in 2026 gets no federal credit. If a quote shows "30% federal tax credit" on a purchase, that is a common and serious error, and it is a reason to walk.

The commercial credit (§48E) is different: it belongs to whoever owns the system. On a lease or PPA that is the provider. It can claim the credit on systems placed in service by December 31, 2027 (later, if construction began by July 4, 2026), provided the equipment meets the foreign-entity-of-concern (FEOC) sourcing rules. Providers use that credit to fund the $0-down offer, so a lease or PPA can still be a good route into solar in Texas — but the credit is not yours and should not appear as your benefit on the paperwork. What you are entitled to see instead is the rate, the escalator and the term, which is what the PPA rate guide and the lease vs. loan vs. cash comparison walk through.

What are your rights under Texas's new solar law, SB 1036?

For a homeowner comparing quotes, this matters more than any rebate. Senate Bill 1036, the Residential Solar Retailer Regulatory Act (Occupations Code Chapter 1806), took effect September 1, 2025 for contract rules, and its registration and enforcement provisions took effect September 1, 2026. The Texas Department of Licensing and Regulation (TDLR) administers it.

Can you cancel a Texas solar contract? Yes — five business days, no penalty

Every agreement to buy or lease a residential solar system — including PPAs — must let you cancel "without penalty or further obligation" by written notice on or before the fifth business day after you signed. Business days exclude weekends and legal holidays. The contract must state the last calendar date of the cancellation period and the mailing or email address for the notice; if it does not, you can cancel by "any reasonable method." Unlike the federal three-day cooling-off rule, which covers only sales made away from the seller's place of business, this right applies wherever you signed — at your kitchen table, in a showroom or on a tablet. If the retailer arranged or is affiliated with the lender, the contract must also require the lender to cancel the loan when you cancel the agreement.

What the contract must contain

Under the statute and TDLR's rules (16 TAC Chapter 71, adopted June 2026; the contract rules apply from September 1, 2026), a Texas residential solar contract must:

• Be written in clear, understandable language.
• State the name, business address, registration number, email and phone of both the retailer and the salesperson.
• Set out "prominently and in plain language" any production guarantee, the warranty terms and the default remedies.
• Name the Texas-licensed electrical contractor who will do the install and their license number (or a list to choose from).
• Commit the retailer or installer to obtaining the permit and the utility's interconnection approval.

You must get a copy at signing — printed, or (if you signed electronically and consented to electronic delivery) a PDF by email. If you ask within the first five business days, a printed copy must follow within one business day.

Separately, Business & Commerce Code Chapter 115 (since 2021) requires a written accounting of all equipment, costs and fees, any performance claims, and all warranties. On a lease or PPA it also requires the term and rate including any payment escalators, and whether the agreement transfers to a buyer of your home.

Registration numbers you can check

Under the Act, a company must be registered with TDLR as a solar retailer to sell or lease residential solar in Texas, and its salespeople must be registered too — with general liability insurance on file for the retailer and criminal-history checks for applicants (licensed electrical contractors selling their own installations are exempt from registration). Applications only opened August 10, so TDLR extended the deadline to November 1, 2026. Until then it is not enforcing two rules: the pre-contract disclosure form you and the salesperson both sign (§71.41), and the consumer brochure due at least 24 hours before signing (§71.43). Apart from those, the contract requirements and the prohibited-acts list apply to contracts signed from September 1, 2026. You can look up a retailer or salesperson in TDLR's license search; on request, a salesperson must give you their name and registration number.

What is prohibited, and what TDLR can do about it

Section 1806.201 prohibits intentionally, knowingly or recklessly making "false, misleading, or deceptive" statements while selling solar; falsely implying an affiliation with a utility or government agency; skipping the required disclosures; soliciting at a home with a no-soliciting sign (unless an occupant invites you); and using anyone other than a licensed electrical contractor for the install. Civil penalties, sought in court, are capped at $2,500 per violation ($50,000 aggregate), or $10,000 per violation ($100,000 aggregate) where the court finds a person over 65 was harmed; TDLR can separately impose administrative penalties. Most usefully for a homeowner, TDLR can — after notice and a hearing — order the cancellation of the agreement and a refund of what you paid under it. Where the lender was affiliated with or referred by the retailer, the contract must require the retailer to pay off the outstanding loan balance if TDLR orders that cancellation.

Two limits. The Act applies only to contracts signed on or after September 1, 2025; for anything earlier, the complaint route is the Attorney General's consumer-protection division and the Deceptive Trade Practices Act. And it exempts new-construction solar, commercial systems, systems under 1 kW (and temporary, emergency or single-appliance systems), and multifamily buildings of more than four units or stories. For cancellation after the five-day window, see can you cancel a solar contract.

Before you sign: 5 incentive lines to check in a Texas solar quote

1. No "30% federal tax credit" on a cash or loan price, and no "state tax credit" or "Texas rebate" line at all. Texas has neither.
2. Any utility rebate is named, dated and attributed. Austin Energy: confirmation letter in hand before install. Oncor: EEPM reservation number and the reserved amount shown as a credit to you. AEP/NBU: the funding commitment. CPS: there is none.
3. The buyback plan the savings are modelled on, with its export rate and any cap — not "you'll offset 100% of your bill." The delivery (TDU) charges on your bill do not go away; our Texas TDU charge audit shows what solar cannot touch.
4. The SB 1036 items: the licensed electrical contractor's name and license number, the last day to cancel and the cancellation address, and the production guarantee and warranty in plain language — all required now. Retailer and salesperson registration numbers become mandatory once TDLR's extended deadline of November 1, 2026 passes; after that, a contract without them is a red flag worth asking about.
5. Who owns the system and who files what. On a lease or PPA: the provider claims §48E, the provider usually files the property-tax exemption, and the contract must state the escalator and whether it transfers when you sell.

Texas solar incentive FAQ

Does Texas have a state solar tax credit?

No. Texas has no personal income tax, so there is nothing for a state solar credit to offset, and the state offers no solar rebate. The only statewide incentive is the property-tax exemption under Tax Code §11.27.

Is there a Texas solar sales-tax exemption?

No. Residential solar equipment is subject to the 6.25% state sales tax plus up to 2% local tax; Texas has no residential solar sales-tax exemption.

Does the property-tax exemption apply if I lease?

Yes — §11.27(a-1) covers the device owner whether or not they own the property. Confirm in writing who files Form 50-123 with the appraisal district, and that the leasing company is not passing a property-tax charge through to you in the lease.

Do I get the Oncor rebate directly?

No. Oncor pays approved installers, who decide how much to pass through. Ask for the reservation amount and get the pass-through written into your price.

Can I get the Austin Energy rebate on a lease or PPA?

Not on a PPA — Austin Energy does not permit third-party PPAs in its territory. The rebate goes to owned systems, paid in cash or financed with a loan; confirm any other ownership structure with Austin Energy before signing.

Can my HOA block solar panels in Texas?

Mostly no. Property Code §202.010 says a property owners' association "may not include or enforce a provision in a dedicatory instrument that prohibits or restricts a property owner from installing a solar energy device." It can require prior approval and can still say no in a closed list of cases: the system threatens health or safety or violates a law; it is on common or association property, or somewhere other than your roof or your own fenced yard or patio; it extends higher than or beyond the roofline; it does not follow the roof slope or its top edge is not parallel to the roofline; the visible frame, brackets, piping or wiring are not silver, bronze or black; a ground-mount is taller than the fence; or the install voids a material warranty. The HOA can pick the roof location unless your placement produces more than 10% more energy. Get written approval before the five-day cancellation window closes.

I signed a Texas solar contract before September 1, 2025. Do the new rules help me?

The SB 1036 contract rules and TDLR's refund authority apply only to agreements signed on or after that date. Earlier contracts fall under the Deceptive Trade Practices Act and Chapter 115's disclosure duties, enforced through the Attorney General and the courts.

Get your Texas solar quote checked, free

If you have a Texas proposal in hand, send it over and we will check the incentive lines, the buyback assumptions, the delivery charges and the SB 1036 contract items against the current rules — the review takes about 15 minutes and costs you nothing. Start a free quote review, or read how the review works first. Solarfying is an independent solar broker; if you go ahead with an installer we introduce, that installer may pay us a referral fee. Homeowners never pay for the review.

Program figures are from Texas Tax Code §11.27 and the Comptroller's Solar and Wind-Powered Energy Device Exemption and Appraisal Guidelines (Form 50-123, April 30 deadline); Austin Energy's July 1, 2026 incentive announcement and residential solar program page (Value of Solar 9.91¢/kWh); Oncor's Solar PV Standard Offer Program manual (2024 program year; terms re-set annually); AEP Texas and New Braunfels Utilities program pages and CPS Energy's residential rebate closure (December 2022); Senate Bill 1036 (89th Legislature) as enrolled, 16 TAC Chapter 71 as adopted June 2026, and TDLR's August 21, 2026 update; Business & Commerce Code Chapter 115; Property Code §202.010; the PUCT's Solar Guide for Consumers (March 2026); and Tax Foundation property-tax data. Rebates, budgets and buyback rates change; confirm current terms with your utility, TDLR and a tax professional before relying on them. This article is general information, not legal or tax advice.