2025 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 2024 and beyond)
- Ways to optimize your solar investment
Solar installers are experts in maximizing your solar tax credits and rebates.
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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: $675
Furnace Tune-Up: $40
Natural Gas Dryer with moisture sensor: $225
Natural Gas Dryer Stub: $300
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
The term "solar incentives" refers broadly to financial incentives put in place by solar companies and the government to encourage increased use of renewable energy by making installing and using solar panels more affordable. Different kinds of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Some incentives may be offered by the Texas government, by your utility company or by county or municipality, while others are federal. Categories of solar incentives include:
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar panels. Property tax exemptions let you ignore the value that your solar panels add when you're calculating how much property tax you need to pay on your home.
- Rebates: Rebates, or partial refunds after a purchase, are typically given prior to any solar tax credits being calculated. Rebates can be given by your local utility company, by your state or by your county.
- Net Metering: Net metering becomes relevant after your solar panels are up and running. If you've signed a net metering agreement with your The Woodlands utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this credit is dollar-for-dollar, while in other areas you might get refunded a percentage of the value.
- Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the federal government.
Federal Solar Incentives
When thinking about solar incentives, you likely think of federal incentives first. A federal incentive that most people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This is a tax credit for a certain percentage of the cost of your solar system.
The ITC can be credited towards the value of solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Originally, the ITC covered 30% of all costs (panels, labor, equipment and accessories), although the covered amount has fluctuated over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.
Speaking with your local The Woodlands solar panel installation expert is the best way to learn more about how the ITC could apply to your situation.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. The Clean Energy Credit bolsters the current credit, increasing it up to 30% for solar systems installed between 2022 and 2032. After this, the percentage will decrease slightly each year until the program expires in 2035. The expansion also makes credits for energy storage systems even easier to claim, starting in 2023.
Click here to learn more about the new Inflation Reduction Act. The easiest way to understand how the new Clean Energy Credit applies to you is to speak with your local The Woodlands solar panel installation expert directly.
State & Local Solar Incentives
Some solar incentives are often also provided at the state and local level. Like with federal incentives, these can include tax credits, rebates and more. Incentives may be handled by the state of Texas, or by your county or municipality. Some incentives may be available for only a limited time, while others are ongoing.
Next Steps for Installing Solar in The Woodlands
Solar incentives might come from the Texas government, the federal government or your local utility company. The large number of incentives available has facilitated the nationwide growth of solar energy use in the last 15 years. We suggest talking to your local The Woodlands solar installation company to learn more about these incentives and to be sure that you're getting the largest number possible for your solar panels.
EcoWatch's The Woodlands, TX Solar Incentives FAQs
How can I learn if I qualify for solar incentives?
It's a good idea to talk to your local The Woodlands solar installer for a better understanding of which incentives your project may qualify for. Usually, solar incentives apply to new solar panel systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, like those provided by the Texas government, might have additional requirements.
How much will solar panels save me on my electric bill in The Woodlands annually?
Typically, The Woodlands homeowners who install solar panels save approximately $972.98 per year, or approximately $18,486.60 over 20 years after they make the switch.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I trade in my appliances for ones that use solar energy, are there credits I can claim?
The recently passed Inflation Reduction Act provides multiple incentives that reward homeowners who make eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I receive any incentives when I add solar panels to a rental property, vacation home or commercial property?
Many solar incentives are intended to apply to a property you own that is located within the United States, and most secondary residences fall under this distinction. Other solar incentives may be available for commercial properties, depending on the details. We recommend speaking with your local solar installer and/or tax professional to fully understand what incentives apply to your specific situation.
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