What are the incentives for solar panels in the Lone Star State?
Texas Community Solar Program
Community solar projects help provide solar energy to electricity customers who do not own their own homes or cannot afford to install solar panels. Instead, they walk into a community with a full-scale industrial solar panel installation and then buy the renewable energy it provides, reaping the environmental and economic benefits of solar power without installing panels on their property.
Some community solar programs in Texas are full, but all recommend waiting on a waiting list to find available spots.
These Texas electricity providers offer community solar projects:
Green Mountain Energy offers a program similar to community solar, but with a twist. Instead of buying your electricity from a community solar project, Green Mountain's Go Local Solar plan buys renewable energy certificates, which are used to buy your power from various solar installations across the state.
Questions about solar panel incentives in Texas
Is it worth it to sunbathe in Texas?
Whether solar panel installation is a good financial investment for you will depend on many factors, including your energy supplier, electricity usage, home size, sun exposure and the cost of solar panel installation.
The average payback period for solar panels in the US is typically between 6 and 12 years. Several online energy calculators estimate that the payback period for solar panels in Texas will be closer to the past average. If your electric utility company offers a rebate on solar panels, it will greatly improve your financial equation.
How does the solar tax credit work?
The Solar Tax Credit provides financial assistance to taxpayers who install solar panels. When filing state or federal taxes, taxpayers who qualify for the credit usually receive a percentage of the installation cost as a tax deduction. The solar tax credit is generally only available for the tax year in which the solar panels are installed.
How does the federal solar tax credit work?
The federal solar tax credit, technically known as the Residential Clean Energy Credit, offers tax breaks to Americans who install new "clean energy" systems. In addition to solar panels, selectable systems include solar water heating, wind power, geothermal heat pumps, biomass fuels and fuel cells.
The tax credit reimburses 30% of the cost of solar panels installed between 2022 and 2033. The credit is 28% for solar panels installed in 2034 and 26% in 2035, after which the credit expires. Taxpayers can apply for the Residential Clean Energy Credit by filing IRS Form 5695.
How often can I claim the solar tax credit?
The solar tax credit can generally only be claimed once, for the tax year in which you installed your solar panels. One exception is the federal residential clean energy tax credit: if the amount of the tax credit is more than the tax you owe, you can carry that credit over to the next tax year.
How does energy deregulation work in Texas?
Since the passage of Senate Bill 7 in 2002, the Texas energy market has been "deregulated." Deregulation means that companies have to compete in the market for customers, who have a wider choice of energy services. Before deregulation, most Texans had no choice in energy providers.
Not only can several companies compete for the same energy customers, but different companies can offer different energy services. Instead of one user managing all energy-related services, different companies can perform services such as generation, distribution, billing and maintenance of power lines.
Confusingly, deregulation does not mean there is no regulation for energy companies; They are still regulated by the Texas Public Utilities Commission and are subject to strict licensing requirements.
