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

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

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

Solar incentives are designed to mitigate the cost of installing a solar panel system on your home. This category of financial incentives is designed to encourage more Americans to switch to renewable energy. Various types of incentives, like discounts, cash back or credit towards your monthly utility bill, may be available to you. Some incentives may be handled by the Texas government, 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:

• Rebates: Solar rebates might be provided by your county or state, or by your local utility company. These rebates work as partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (This is different from a tax deduction.)
• Tax Exemptions: Your solar panel system might qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value added by your solar panels when you are calculating property taxes on your home.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Pearland utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other places you may get refunded a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have some knowledge of. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. This incentive is a tax credit equal to a specified percentage of the money you spend installing solar panels.

The ITC can be applied to a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed after January 1, 2006, on a property owned by you for you to claim the credit. Originally, the ITC covered 30% of all system installation costs (panels, accessories, labor and equipment), although this amount has fluctuated over time between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the amount you can claim.

Your local Pearland solar panel installation expert can provide you with more information about the ITC and how it applies to your situation.

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. Homeowners are now eligible for a credit equal to 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. The percentage will then decrease yearly until the Clean Energy Credit ends in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.

Click here to learn more about the new Inflation Reduction Act. To best understand how the new Clean Energy Credit might apply to you, speak with your local Pearland solar installers.

State & Local Solar Incentives

Federal solar incentives are not your only option; tax credits, rebates and more are often offered at the state and local level. These incentives may be offered by your county or municipality, or by the Texas government. Some are available for a limited time, while others are ongoing.

Next Steps for Installing Solar in Pearland

The nationwide use of solar energy has increased enormously in the past 15 years, in part due to the increase in availability of solar incentives. You can obtain these incentives from the Texas government, the federal government or your local utility company. It is a good idea to talk to your local Pearland solar installation expert for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.