2025 Solar Incentives Guide for Fredericksburg, TX - Tax Credits & Rebates

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

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

The phrase "solar incentives" includes a wide range of financial incentives designed to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. You may qualify for various types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Texas and others from the federal government. Some solar incentives you might qualify for are:

• Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually come off your total price before tax credits are calculated.
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the value added by your solar system when you calculate how much property tax you need to pay on your home.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Fredericksburg utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some areas, this credit is dollar-for-dollar, while in others you may be refunded a percentage of the value.
• 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.)

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. An incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of your solar system's cost.

The ITC applies to solar systems installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Originally, the tax credit was for 30% of the total cost – for panels, accessories, labor and equipment – although that amount may range from 26-30%, depending on when your solar project was undertaken. There is no cap on the claim amount.

To best understand how the ITC may apply to your situation, get in touch with your local Fredericksburg solar panel installation expert and ask for more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit for 30% of the total cost. This percentage will decrease annually after 2032 until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems under this new program.

More information about the new Inflation Reduction Act can be found here. To better understand how the new Clean Energy Credit will apply to you, speak with your local Fredericksburg solar installation expert.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Rebates, tax credits and more might be available at a more local level. These incentives — which may be given by the state of Texas, or by your county or municipality — might be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Fredericksburg

There are many kinds of solar incentives: those offered by local utility companies, those offered by the Texas government and those provided by the federal government, to name a few. Solar energy use has grown enormously in the last 15 years, partially thanks to these incentives. Your local Fredericksburg solar panel installation company can give you more information about which incentives you should apply for, and get you started on the path to switching to renewable energy today.