2024 Solar Incentives Guide for Houston, TX - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Houston.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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What Solar Tax Credits, Incentives, and Rebates are Available in Houston?
Renewable Energy Systems Property Tax Exemption
Texas Gas Service - Residential Energy Efficiency Rebate Program
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
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are meant to help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to switch their home over to renewable energy. These incentives may include cash back, upfront discounts or credit towards your monthly utility bill. Some incentives are provided by the federal government, some by the state of Texas and some by your specific utility company, county or municipality. You might qualify for any of the following types of solar incentives:
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
- Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Solar rebates may be provided by your local utility company, by your county or by your state.
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement in place with your Houston utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this is a dollar-for-dollar credit, while in other areas you might make back a percentage of the value.
- Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying property tax on your house. You could also look for exemptions on sales tax at the time of purchase.
Best National Provider
SunPower
- 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
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Regional Coverage
Momentum Solar
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
Federal Solar Incentives
When you hear the term "solar incentives," federal incentives are likely 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 provides a credit on your taxes equal to a specified percentage of your solar system's cost.
The ITC was originally for 30% of the cost of solar panel installation, although it has fluctuated slightly over time between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total cost of installation includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum amount you can claim. The ITC applies to solar panels installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.
Your local Houston solar panel installer can provide more information about the ITC and how it applies to your situation.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. Homeowners can now receive a credit of 30% of the total costs of solar system installation for projects that began after January 1, 2022, and will be finished by the end of 2032. This percentage will then decrease yearly until the Clean Energy Credit expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit will apply to you, reach out to your local Houston solar installation expert.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. Incentives might be provided by the state of Texas, or by your county or municipality. Certain incentives are available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in Houston
You can qualify for solar incentives from the federal government and the Texas government, as well as from your local utility company. This increase in availability of solar initiatives in the past 15 years has helped greatly increase nationwide adoption of solar energy. Your local Houston solar panel installation expert can provide you with more details about which incentives you can apply for, and get you on track to switch to renewable energy today.
EcoWatch's Houston, TX Solar Incentives FAQs
If I installed solar panels on my house a few years ago, can I still claim incentives?
Your best bet is to talk to a representative from the company that installed your solar system – or get in touch with a local Houston solar installer — to clarify which incentives you may qualify for. If your solar panels were installed after January 1, 2022, you likely qualify for the newly increased 30% tax credit under the Inflation Reduction Act. Systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
How much will a solar system save me on my electric bill in Houston annually?
After adding solar panels to your home in Houston, you can anticipate savings of approximately $971.40 per year, or about $18,456.60 over the next 20 years.
What are some environmental benefits of adding solar panels to my home?
You can reduce your carbon footprint by 400 pounds of CO2 annually when you install solar panels. This adds up to roughly 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.
I want to change out my appliances for ones that are more energy-efficient. Are there any credits I can get?
The new Inflation Reduction Act provides multiple incentives designed to reward homeowners for making eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives both towards the up-front cost of solar panels, and later as reimbursement?
The order in which incentives are applied could vary depending on which incentives you are eligible for but generally yes, you can receive multiple types of incentives for your solar project. Talk with your solar installer or a local tax professional to be sure you are claiming all possible incentives and applying them in the correct order.
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.