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.
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By EcoWatch Local Advisors
Data Analysis: James Savino
Ranking Methodology: Karsten Neumeister
Updated May 04, 2023
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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 Tune-Up: $40
Natural Gas Dryer with moisture sensor: $225
Natural Gas Dryer Stub: $300
Federal Residential Renewable Energy Tax Credit
The term "solar incentives" refers to a wide range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. The incentives could include upfront discounts, cash back or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the Texas government and some by your specific utility company, county or municipality. Some broad categories of solar incentives include:
- Tax Credits: Tax credits decrease, dollar-for-dollar, how much income tax you owe the federal government. These differ from tax deductions.
- Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, which is applied when you purchase solar panels. The second is property tax exemption, which allows you to ignore the value added by your solar system when paying property tax on your home.
- Rebates: Rebates, or partial refunds after a purchase, are usually applied before any solar tax credits are calculated. These rebates might be given by your local utility company, by your state or by your county.
- Net Metering: Don't forget to speak with your Houston utility company about signing a net metering agreement. This allows you to get a credit towards your monthly utility bill for the value of excess energy generated by your solar panels. You may receive either a dollar-for-dollar credit or a percentage of the value.
Federal Solar Incentives
When you think about solar incentives, you likely think of federal incentives first. 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 the cost of your solar system.
The ITC initially applied to 30% of the cost of solar panel installation, although it has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of equipment, accessories and labor. There is no maximum claim amount. 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.
To better understand how the ITC could apply to you, reach out to your local Houston solar panel installation expert and request more information.
In August 2022, the ITC (now titled the Clean Energy Credit) was expanded and extended by the passage of the Inflation Reduction Act. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners may be eligible for a credit for 30% of the total cost. The percentage will then decrease annually until the Clean Energy Credit expires in 2035. Beginning in 2023, it will also be easier to get credits for energy storage systems under this new program.
More information about the new Inflation Reduction Act can be found here. To best understand how the new Clean Energy Credit will apply to you, reach out to your local Houston solar installers.
State & Local Solar Incentives
Rebates, tax credits and more might be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives may be given out by the Texas government, or by your county or municipality. Certain incentives are available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Houston
There are many kinds of solar incentives: those given by local utility companies, those given by the Texas government and those given by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, thanks to these incentives. If you're ready to make the change to solar energy, calling your local Houston solar panel installation expert is an excellent place to start.
Best Solar Financing
Blue Raven Solar
- Industry-leading in-house financing
- Competitive pricing
- Excellent reputation
- Doesn't offer solar batteries
Best Regional Coverage
- Great warranty coverage
- Representatives are experts on local policies
- Concierge service ensures steady communication
- Slightly limited service offerings
EcoWatch's Houston, TX Solar Incentives FAQs
How do I know if I qualify for specific solar incentives?
It's a smart idea to get in touch with your local Houston solar installer to get an understanding of which incentives your project will qualify for. In most cases, solar incentives apply to new solar panel systems installed on property you own (in the U.S.) between the dates specified by the incentive. Some incentives, like those provided at the level of the Texas government, might have other requirements.
How much will a solar system save me on my electric bill in Houston annually?
Once you add solar panels to your home in Houston, you can expect to save around $971.40 per year, or around $18,456.60 over the next 20 years.
Who installs solar panel systems near me?
To discover the top solar panel installation companies near you, take a look at our article on the top solar companies in Houston.
What are the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing where you get your energy, you help reduce the strain on our planet's resources. Solar panels can also lower the CO2 emissions from your home by 400 pounds a year, or roughly 8,000 pounds over 20 years.
Can I use a combination of multiple types of renewable energy to power my home?
Yes, you can utilize multiple types of renewable energy to power your home, such as a combination of solar and geothermal. You can also combine renewable energy generation with a backup source of non-renewable energy. You should discuss the details of your plan with your local Houston solar installation expert, to get an understanding of what will be needed and what types 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.