2023 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 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 Houston solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 20, 2023

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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 Houston?

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

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 intended to make renewable energy usage more affordable through financial incentives to help people install solar panels on their homes. Various types of incentives, such as discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be provided via the state of Texas, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:

  • Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when paying taxes on your house. You could also look for exemptions on sales tax at the time of purchase.
  • Net Metering: You can sign a net metering agreement with your Houston utility company, that may apply to all or a percentage of the excess electricity that is generated by your solar panels. Your utility company will then subtract this value from your monthly utility bill.
  • Rebates: Some solar companies will help you claim a rebate, or partial refund of your purchase, for your solar panels. States or counties will also offer limited-time rebates at various times. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
  • Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.

Federal Solar Incentives

When thinking about solar incentives, federal incentives may be the first thing that comes to mind. The Federal Solar Investment Tax Credit, or ITC, is probably the best-known federal solar incentive. The ITC offers a tax credit for a set percentage of your solar system's cost.

The ITC covers solar systems installed after January 1, 2006 and lets you deduct from your taxes a percentage of the total cost of solar panels, accessories, equipment and labor. You can receive this credit for a solar panel system installed on a primary or secondary residence in the United States that you own. The original claim amount was 30% of the total cost, although certain projects may qualify for only 26%, depending on the details. There is no maximum claim amount.

To know exactly how much money the ITC could save you, speak with your local Houston solar panel installation expert.

The ITC was both renewed and expanded by the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The Clean Energy Credit has increased the current credit up to 30% for solar installations undertaken between January 1, 2022 and December 31, 2032. After 2032, the percentage will decrease slightly each year until the program expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, beginning in 2023.

More information about the new Inflation Reduction Act can be found here. The easiest way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Houston solar panel company directly.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. As with federal incentives, these might include rebates, tax credits and more. These incentives may be provided by the Texas government, or by your county or municipality. Some incentives may be ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Houston

Solar energy use nationwide has gone up tremendously in the last 15 years, in part thanks to the increase in availability of solar incentives. You might receive these incentives from the Texas government, the federal government or your local utility company. Speaking with your local Houston solar panel installation expert is the best first step towards making sure you get all the incentives you qualify for when you switch to solar energy.

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EcoWatch's Houston, TX Solar Incentives FAQs

What if I add a solar system to a vacation home, rental property or commercial property? Do I still qualify for incentives?

Many solar incentives apply to a property located within the United States that you own, and most secondary residences will fall under this distinction. Other solar incentives may be available for commercial properties, depending on the specifics. We recommend talking to your local solar installer and/or tax professional to best understand what incentives apply to your specific situation.

How much will a solar system save me on my electric bill in Houston annually?

Generally, homeowners in Houston who install solar panels save about $971.40 per year, or about $18,456.60 over 20 years after they make the switch.

What are some environmental benefits of installing solar panels on my house?

Solar energy is a renewable energy source — by changing where you get your energy, you help lessen the strain on our planet's resources. A solar system can also reduce your home's CO2 emissions by 400 pounds annually, or roughly 8,000 pounds over 20 years.

I want to change out my appliances for ones that are more energy-efficient. Are there any incentives I can claim?

Under the new Inflation Reduction Act, there are a number of new financial incentives to encourage you to make eco-friendly improvements to your home. More details regarding these incentives, including information about incentives for purchasing new appliances, can be found here.

Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?

Yes, you can receive both rebates and tax credits towards the cost of solar panels. Depending on precisely which incentives you are receiving, they may apply in a different order. Make sure that you talk to your solar installer or a local tax professional to verify that you are claiming incentives correctly and that you're getting the most money possible.

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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