2023 Solar Incentives Guide for Austin, TX - Tax Credits & Rebates

In this guide, we'll cover the latest solar incentives and rebates available in Austin.

You'll learn about:

  • Local & State Solar Incentives
  • Federal Tax Credits (Updated for 2023 and beyond)
  • Ways to optimize your solar investment

Solar installers are experts in maximizing your solar tax credits and rebates.
Get a free quote from one of our trusted Austin solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated May 04, 2023

Why you can trust EcoWatch

We work with a panel of solar experts to create unbiased reviews that empower you to make the right choice for your home. No other site has covered renewables as long as us, which means we have more data and insider information than other sites. Our rankings are never affected by revenue or partnerships.

What Solar Tax Credits, Incentives, and Rebates are Available in Austin?

Renewable Energy Systems Property Tax Exemption

Incentive Type:
Property Tax Incentive

Texas Gas Service - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Free Equipment Program: Free appliance installation and weatherization services
Home Improvement (includes attic insulation, duct sealing, duct insulation, duct replacement, high-efficiency gas furnace, and Wi-Fi thermostat: Up to $1000
Solar Water Heater With Natural Gas Backup: $750
Tankless or Super High-efficiency Water Heater: $650
Furnace: $675
Furnace Tune-Up: $40
Natural Gas Dryer with moisture sensor: $225
Natural Gas Dryer Stub: $300

Austin Energy - Residential Solar PV Rebate Program

Incentive Type:
Rebate Program
$2,500

Austin Energy - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Central AC/Heat Pump: $150 - $600
Package Unit AC/Heat Pump: $200 - $550
Mini-Split AC/Heat Pump: $250 - $800
AC Tune-Up: $175, max of 5 systems
Pool Pumps: $300 per pump replaced
Heat Pump Water Heater: $800
Smart Thermostat: $25/unit, plus $85 for participating in the Power Partner Thermostat smart energy savings program
Window Air Conditioners: $50 per unit
Weatherization Bonus: Up to $2,400
Solar Screens/Solar Film: $1.00/sq. ft.
Attic Insulation to R-38: varies by original R-value
Duct Replacement: $3.25/sq. ft.
Duct Insulation: $1.00/sq. ft.
Duct System Performance Testing: $200 - first system, $100 each additional system/ $75.00 per new return air improvement (max 3 per system)
External Combustion Air: $20 each
Air Infiltration and Duct Sealing: $0.12/sq. ft.
Total External Static Pressure: $175 for first system, $100 for additional
Return Air/Supply Grilles: $5 each
Improve Supply and/or Return Plenum: $75 each
Additional Attic Access: $25
Insulated Box for Pull Down Stairs: $25
Fan Cover: $25

Pedernales Electric Cooperative - Residential Energy Efficiency Rebate Program

Incentive Type:
Rebate Program
Central AC: $250/unit
Heat Pump: $250/unit
Ground Source Heat Pump: $250/Ton
Dual Fuel Heat Pump: $250

Federal Residential Renewable Energy Tax Credit

Incentive Type:
Personal Tax Credit
30% federal tax credit for systems placed in service after 12/31/2021 and before 01/01/2033. Good for: solar water heat, solar photovoltaics, biomass, geothermal heat pumps, wind (small), fuel cells using renewable fuels.

Source: https://www.dsireusa.org/


Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more homeowners to switch their home over to renewable energy. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are provided by the federal government, while others are handled by the state of Texas or by your utility company, county or municipality. Some broad categories of solar incentives include:

  • Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
  • Tax Exemptions: Tax exemptions may come in two forms. The first is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the added value of your solar system when paying property tax on your home.
  • Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Austin utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in other places you may be refunded a percentage of the value.
  • Rebates: Solar rebates may be provided by your county or state, or by your local utility company. These rebates are essentially partial refunds that are applied after your purchase of a solar system and before tax credits are calculated.

Federal Solar Incentives

When thinking about solar incentives, federal incentives might be the first thing that comes to mind. The solar incentive that you're most familiar with is probably the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a certain percentage of the cost of your solar system.

The ITC applies to the total cost of installing solar panels, including the panels themselves as well as equipment, accessories and labor. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence that you own and that is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.

Have questions about how the ITC applies to your specific situation? Reach out to your local Austin solar panel installation expert to get more information.

In August 2022, the Inflation Reduction Act expanded and extended the ITC, now called the Clean Energy Credit. The Clean Energy Credit lasts until 2035. Any solar installation project that is completed between January 1, 2022 and December 31, 2032 may qualify for a 30% tax credit. The amount will then decrease slightly on a yearly basis until the end of the current program. Beginning in 2023, it will also be easier to qualify for credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit might apply to you, talk to your local Austin solar installation expert.

State & Local Solar Incentives

Some solar incentives are often also provided at the state and local level. Similar to federal incentives, these may include rebates, tax credits and more. These incentives may be given out by your county or municipality, or by the Texas government. Some are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Austin

There are many types of solar incentives: those offered by the federal government, those offered by the Texas government and those offered by local utility companies, to name a few. Solar energy use has grown enormously in the last 15 years, thanks to these incentives. We recommend talking to your local Austin solar installer for more information about these incentives and to ensure that you're getting all of the money you can for your solar panels.

Best National Provider

SunPower

★★★★★
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  • Most efficient panels on the market
  • National coverage
  • Cradle to Cradle sustainability certification
  • Great warranty coverage
  • Expensive
  • Customer service varies by local dealer

Best Solar Financing

Blue Raven Solar

★★★★★
4.5

  • Industry-leading in-house financing
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Best Regional Coverage

Momentum Solar

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  • Great warranty coverage
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  • Concierge service ensures steady communication
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EcoWatch's Austin, TX Solar Incentives FAQs

Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?

While we recommend speaking with your local solar installer and/or tax professional to better understand what solar incentives apply to you, many will apply to a second home, so long as that home is in the United States and owned by you. There may be additional incentives available for commercial properties specifically, depending on the details.

I already have solar panels. Does my system qualify for any incentives?

If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you may qualify for a tax credit between 26% and 30%, depending on the year it was installed. Talking to the company that installed your solar system, or any local Austin solar installer, can help you learn what incentives you qualify for.

What are the top solar panel installation companies near me?

To find a top-rated solar panel installer, check out our guide to the top solar companies in Austin.

What are some environmental benefits of adding solar panels to my house?

You can decrease your carbon footprint by 400 pounds of CO2 annually by installing solar panels. This adds up to around 8,000 pounds in 20 years. In addition, solar power is a renewable energy source, which means that making the switch lessens the drain on our planet's resources.

Can I use a combination of multiple types of renewable energy to power my home?

Yes, you can use multiple types of renewable energy to power your home — for example, a combination of wind and solar. You can also use both renewable energy sources and a backup source of non-renewable energy. You should discuss your plan with your local Austin solar installation expert, to make sure you know what you'll need and what kinds of incentives you will or won't qualify for.

Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.

Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.

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