2023 Solar Incentives Guide for The Woodlands, TX - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in The Woodlands.
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 The Woodlands?
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
Solar incentives are meant to encourage homeowners to switch to renewable energy by providing incentives meant to lower the financial burden of solar panel installation and use. You may qualify for different kinds of incentives, including cash back, discounts or credit towards your monthly utility bill, depending on your situation. Certain incentives come from your specific utility company, county or municipality, some from the Texas government and others from the federal government. You might qualify for any of the following types of solar incentives:
- Net Metering: You can sign a net metering contract with your The Woodlands utility company. This agreement may apply to all or a percentage of the excess electricity that is generated by your solar panels. They will then subtract this value from your utility bill each month.
- Rebates: A rebate is a partial refund given after you've purchased your solar panels. These might be offered by your local utility company, your county or your state. The rebates are usually applied before calculating tax credits.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in the amount of tax that you owe the federal government.
- Tax Exemptions: These can come in the form of property tax exemptions, which let you exclude the value of your solar system when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. You've likely heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit equal to a specified percentage of the money you spend on your solar system.
The ITC can be applied to the total cost of installing solar panels, including the panels themselves as well as labor, accessories and equipment. You can claim this credit for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. 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 claim amount.
Your local The Woodlands solar panel installer can give you more information about the ITC and how it may apply to your situation.
The ITC has been renewed and expanded following the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. For solar systems installed between January 1, 2022 and December 31, 2032, homeowners can receive a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.
Click here to learn more about the new Inflation Reduction Act. The best way to fully understand how the new Clean Energy Credit applies to you is to talk with your local The Woodlands solar panel installation expert.
State & Local Solar Incentives
There are often state solar incentives available in addition to federal ones. Rebates, tax credits and more might be available at a more local level. Incentives may be handled by your county or municipality, or by the state of Texas. Certain incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in The Woodlands
The large number of solar incentives available has contributed greatly to the increase in the adoption of solar energy nationwide over the last 15 years. You might qualify for solar incentives from the federal government, the Texas government or from your local utility company. It is a good idea to talk to your local The Woodlands solar installation expert for more information about these incentives and to ensure that you're getting all of the money you can for your solar system.
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 The Woodlands, TX Solar Incentives FAQs
How can I find out if I qualify for solar incentives?
Typically, solar incentives apply to:
- a new solar panel system
- installed on property you own
- within the U.S.
- between the dates specified by a particular incentive.
Specific incentives, including those given out by the Texas government or by your county/municipality, sometimes have additional qualifications. Talk to your local The Woodlands solar installer to learn more about what incentives your project will qualify for.
If I already have solar panels, can I still claim incentives?
Your best bet is to talk to the company that installed your solar system — or get in touch with a local The Woodlands 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 newly increased 30% tax credit under the Inflation Reduction Act. Solar panels installed between 2006 and 2021 may qualify for a tax credit of 26-30%.
When does the federal solar tax credit end?
The Clean Energy Credit (formerly called the federal solar tax credit, or the ITC), is slated to end on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
I want to change out my appliances for ones that are more energy-efficient. Are there any benefits I can apply for?
The new Inflation Reduction Act includes provisions for several incentives meant 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 receive 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 your solar panels. Depending on precisely which incentives you are claiming, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to confirm that you are claiming incentives correctly and getting the most money you can.
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.