Texas has been recognized for its thriving renewable energy industry, especially the growing interest in solar power among homeowners. Apparently, awareness of environmental well-being is considered the major driving force behind the adoption of solar energy. However, this is not the case in Texas, or as a matter of fact in all other states in the USA. People will only consider solar energy for their home improvement if they get some short or long-term benefits through it. In order to encourage people to adopt solar energy, the federal government and states have launched various tax credits and rebates on renewable resources. In the following section, let us discuss the solar tax credits in Texas.
The Federal Solar Tax Credit
People living in all other states in the USA, including the Lone Star State, are eligible for a non-refundable tax credit. The federal tax credit, also known as the Investment Tax Credit (ITC), is worth 30% of the total cost of solar installation for your home.
For example, imagine that a person is investing around $15000 for home solar improvement. In this case, the homeowner is eligible to obtain a $4500 tax credit for the home solar solutions. However, it is notable that the tax credit is nonrefundable. At the same time, you cannot withdraw the amount to your bank account. So, you will not be able to pocket the remaining cash if your tax liability comes down to zero.
People residing in Texas and other states should also keep in mind that the federal tax credit on solar investment will not remain forever. According to the current regulations, the tax credit will decrease to 26% from 2033, while it will no longer be available from the year 2035.
Local Solar Rebates in Texas
Besides the federal tax credit, the residents in Texas are also eligible to obtain certain solar rebates. Some utility companies offer incentives that make solar installations worthwhile. In the following section, you can find a guide on the popular solar incentives in Texas.
- American Electric Power SMART Source Solar PV Program: The AEP customers can enjoy a hefty rebate of up to $3000. The rebate size depends on the overall solar installation cost.
- Oncor Residential Solar Program: Oncor is one of the largest electricity providers in Texas. It also offers a solar rebate, which is unique to a specific or particular installation.
- Austin Energy Solar Photovoltaic Rebates & Incentives: Austin Energy customers can earn around $2500 rebates by installing solar panels. The beneficiary should also participate in a solar education course.
- SMTX Solar PV Rebate: The customers of San Marcos are also eligible for a rebate of up to $2500. However, they need to get pre-approved to qualify for such rebate programs.
Other Benefits and Tax Exemptions
Apart from the solar credits and rebates, the residents of Texas are eligible for various other benefits and tax exemptions. In the following section, have a quick look at the tax exemptions and other benefits at a glance.
- Property Tax Exemptions: Do you know that you become eligible for a property tax exemption if you invest in solar panels for your home? You would be delighted to know that the property tax exemption in Texas is the highest among the other states in the country. People typically fear paying a higher property after solar installation since solar panel installation increases property value. Since industry experts suggest a 4% increase in property value due to solar installation, the local government in Texas offers around 4% tax exemption on property taxes.
- Neter Metering Benefits: technically, the Lone Star State does not have a net metering program. The net metering program allows homeowners to sell extra energy generated from solar panels to utility companies. Though there are no such net metering programs, you can always enroll in a similar program that has been rolled out by the local utility companies in Texas. Different companies have different plans that are similar to net metering.
Bottom Line
So, these are the things that residents should learn about Texas solar tax credits and rebates. If you are considering solar upgrades at your home, you must understand the benefits that are edible to obtain from the federal government and local utility companies. Keeping these things in mind will eventually help you save money on a hefty investment for solar panel installation in Texas.
