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

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

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.
Get a free quote from one of our trusted Katy solar installers to see how much you can save.

By EcoWatch Local Advisors

Data Analysis: James Savino

Ranking Methodology: Karsten Neumeister

Updated January 24, 2025

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 Katy?

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/


The term "solar incentives" generally refers to financial incentives designed to encourage increased use of renewable energy by making solar panels more affordable. Different kinds of incentives, including discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be offered by the state of Texas, by your utility company or by county or municipality, while other incentives are federal. Types of solar incentives might include:

  • Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. These differ from tax deductions.
  • Rebates: Rebates, or partial refunds after a purchase, are usually given before any solar tax credits are calculated. Rebates might be offered by your local utility company, by your state or by your county.
  • Tax Exemptions: Sales tax exemptions are effective at the point of sale for your solar panels. Property tax exemptions allow you to ignore the value added by your solar system when calculating how much property tax you need to pay on your house.
  • Net Metering: Don't forget to speak to your Katy 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 your solar panels generate. You could receive either a dollar-for-dollar credit or a percentage of the value.
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Federal Solar Incentives

When you think about solar incentives, you probably think of federal incentives first. A federal incentive many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a specified percentage of the cost of your solar system.

The ITC applies to the total cost of installing a solar system, including the panels themselves as well as accessories, equipment and labor. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own and that is located in the United States. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum amount you can claim.

Talking to your local Katy solar panel installation expert is the best way to learn more about how the ITC may apply to you.

The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as renaming it to the Clean Energy Credit). The Clean Energy Credit has increased the current credit up to 30% for solar installation projects started after January 1, 2022, and completed by the end of 2032. After 2032, the credit percentage will see a slight decrease annually until the end of the program in 2035. Starting in 2023, the expansion to the program will also make claiming credit for energy storage systems easier than ever before.

More information about the new Inflation Reduction Act can be found here. Your local Katy solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it will apply to you.

State & Local Solar Incentives

Tax credits, rebates and more can be provided at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Some incentives are ongoing, while others are offered for only a limited time. These local incentives could come from your county or municipality, or from the Texas government.

Next Steps for Installing Solar in Katy

Solar incentives can come from the Texas government, the federal government or your local utility company. The growing number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. Your local Katy solar panel installation company can help you learn more about which incentives you might qualify for, and get you started on the path to switching to renewable energy today.

EcoWatch's Katy, TX Solar Incentives FAQs

How can I find out if I qualify for specific solar incentives?

It's best to speak with your local Katy solar installer to get an understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar systems installed on property you own (in the U.S.) within a specified date range. Some incentives, like those given by the state of Texas, may have other requirements.

If I already have solar panels, can I still claim incentives?

An excellent idea would be to talk to someone from the company that installed your system – or reach out to a local Katy solar installer — to learn about which incentives you may qualify for. If your system was installed after January 1, 2022, you likely qualify for the recently increased 30% tax credit under the Inflation Reduction Act. Solar systems installed between 2006 and 2021 may qualify for a tax credit of 26-30%.

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

Typically, homeowners in Katy who install solar panels save about $925.26 per year, or approximately $17,579.94 over 20 years after they make the switch.

What are the highest-rated solar panel installation companies near me?

To discover the top solar panel installation companies near you, take a look at our article on Katy's best solar panel companies.

How long until the federal solar tax credit ends?

The Clean Energy Credit (formerly called the federal solar tax credit, or ITC), is scheduled to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.

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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