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Your complete guide to maximizing solar savings through federal, state, and local incentive programs
The most valuable solar incentive available
The federal Solar Investment Tax Credit (ITC) is the single most valuable solar incentive available to Texas homeowners. This federal tax credit allows you to deduct 30% of your solar system cost from your federal taxes.
The ITC is a dollar-for-dollar reduction in your federal income tax liability. For example, if your solar system costs $25,000, you can claim a $7,500 tax credit (30% of $25,000).
Protect your property value from tax increases
Texas offers a 100% property tax exemption for solar panel installations, meaning the added value of your solar system won't increase your property taxes. This is codified under Texas Tax Code Section 11.27.
Typical Scenario:
Don't Forget Form 50-123!
To claim your 100% property tax exemption, you must file Texas Comptroller Form 50-123 ("Exemption Application for Solar or Wind-Powered Energy Devices") with your local County Appraisal District. This must be done between Jan 1 and April 30 of the year after installation.
The Texas energy market is shifting. Traditional "1-to-1 Net Metering" is becoming rarer. In 2026, the trend is moving towards "Solar Days / Free Nights" plans from providers like Rhythm or Almighty.
New under the Inflation Reduction Act, tax-exempt entities (like non-profits, churches, local governments, and tribal entities) in Texas can now use Direct Pay to receive the 30% ITC as a direct cash payment from the IRS, since they don't have tax liability to offset.