Texas Solar and Battery Incentives 2026: Every Rebate You Can Claim

The Texas Solar Incentive Landscape in 2026

Texas is the second-largest solar market in the country, but the incentive picture here is different from states like California or New York. There's no statewide solar rebate, no mandatory net metering, and the state legislature has largely taken a hands-off approach to residential clean energy policy. That might sound discouraging, but the reality is more nuanced — and more favorable — than it appears.

Between the federal tax credit, two powerful state tax exemptions, a growing list of local utility rebate programs, and competitive solar buyback plans from retail electricity providers, Texas homeowners can significantly reduce the cost of going solar in 2026. And a major shift is underway: utilities are increasingly offering battery-specific incentives, making solar-plus-storage the smartest financial move in the Lone Star State.

Here's every incentive available to Texas homeowners right now.

The Federal Investment Tax Credit: Still 30% in 2026

The most valuable single incentive for Texas solar buyers is the federal Investment Tax Credit (ITC), which allows you to deduct 30% of your total solar installation cost from your federal income taxes. This isn't a rebate or a credit on your utility bill — it's a dollar-for-dollar reduction in the taxes you owe.

For a typical Texas solar installation costing $25,000, the ITC saves you $7,500. If you add a $16,000 battery, the combined system cost of $41,000 yields a $12,300 tax credit.

The ITC applies to the full installed cost of the system, including panels, inverters, batteries, wiring, permits, and labor. The credit is available for systems installed and operational in 2026 — the 30% rate is locked in through 2032 under the Inflation Reduction Act, stepping down to 26% in 2033 and 22% in 2034.

Important: You need to have sufficient federal tax liability to claim the full credit. If your tax bill is less than the credit amount, you can carry the unused portion forward to future tax years. Consult a tax professional to confirm your eligibility.

Use the Energy Scout calculator to estimate your ITC savings based on your specific system size and cost.

Texas Property Tax Exemption for Solar

One of Texas' strongest solar incentives is its property tax exemption for renewable energy devices. Under Texas Tax Code Section 11.27, solar panels and battery storage systems are exempt from property tax assessment. That means the added home value from your solar installation — which studies show averages $15,000–$25,000 for a typical system — will not increase your property tax bill.

In a state where property tax rates average 1.6–1.8%, this exemption saves Texas solar homeowners $240–$450 per year, or $6,000–$11,250 over the 25-year life of a solar system. It's automatic — you don't need to apply separately, though it's worth confirming with your county appraisal district that the exemption has been properly applied.

Texas Sales Tax Exemption

Solar energy equipment is exempt from Texas state sales and use tax. With the state sales tax rate at 6.25% (and combined local rates often reaching 8.25%), this saves $1,500–$3,400 on a typical residential solar installation. The exemption applies to panels, inverters, batteries, racking, and related equipment.

Local Utility Rebates: Where the Real Money Is

While Texas lacks a statewide rebate program, several municipal utilities and transmission companies offer their own incentives. These vary significantly by service territory, so knowing your utility is essential.

Oncor — Dallas-Fort Worth Metro

Oncor's Residential Solar Program is one of the most generous utility incentive programs in Texas. For 2026, the program has shifted to require battery storage paired with solar, reflecting the industry-wide move toward solar-plus-storage. The incentive pays approximately $300 per kWh of installed battery storage, which can reach up to $9,000 for larger systems with significant storage capacity.

For a homeowner installing a 10 kW solar system with a 13.5 kWh Tesla Powerwall 3, the Oncor incentive could be worth approximately $4,050 — on top of the federal tax credit. That's a combined incentive of over $16,000 on a $35,000 system.

Note: Oncor is a transmission and distribution utility, not a retail electricity provider. The rebate is available regardless of which retail electric provider you use, as long as you're in Oncor's service territory.

Austin Energy — Austin Metro

Austin Energy runs two notable programs for residential solar customers. First, a solar rebate of up to $2,500 for systems of at least 3 kW, available after completing Austin Energy's free solar education course. Second, a battery storage rebate of up to $2,500 for qualifying home battery installations.

Combined, Austin homeowners can receive up to $5,000 in local rebates on a solar-plus-battery system. Austin Energy also offers a Value of Solar tariff that credits solar production at a fixed rate, providing more predictable returns than variable buyback plans.

CPS Energy — San Antonio

CPS Energy offers a tiered rebate system: up to $4,000 for solar PV systems, plus $500 per kW of battery storage. A 10 kW solar system with a 10 kW battery could receive up to $9,000 in CPS rebates. You must use a CPS Energy-approved installer, and program funding is limited, so applying early in the year is advisable.

AEP Texas SMART Source — South and West Texas

AEP Texas provides one-time solar rebates ranging from $1,500 to $3,000 for residential systems of at least 3 kW. The exact amount depends on system size. This program covers parts of South and West Texas, including the Corpus Christi and Laredo areas.

New Braunfels Utilities

NBU offers rebates up to $3,000 for qualifying residential solar systems of at least 3 kW. The rebate amount varies based on system size and panel orientation.

Bandera Electric Cooperative

BEC launched its Smart Battery Program in early 2026, partnering with Enphase to offer members access to 20 kWh home battery systems for $36.99 per month. Members in BEC Fiber zones are eligible, and the program doubles as a virtual power plant — BEC can dispatch stored energy during grid peaks in exchange for the reduced monthly rate.

Solar Buyback Plans: Texas' Version of Net Metering

Texas doesn't mandate net metering, but the deregulated electricity market has created a competitive landscape of solar buyback plans from retail electricity providers. These plans credit you for excess solar energy sent to the grid, though the rates and structures vary widely.

Some plans offer one-to-one credits at your retail rate, while others pay a lower wholesale rate for exports. A few key considerations when choosing a buyback plan: look at the export credit rate relative to your import rate, check whether the plan has a base charge that offsets your credits, understand if credits roll over month to month, and read the contract term carefully.

This is where battery storage changes the math. Without a battery, you export excess solar during the day at potentially low buyback rates and buy electricity back at higher rates in the evening. With a battery, you store that midday excess and use it during peak evening hours, avoiding the buyback arbitrage entirely. In many Texas markets, adding a battery can improve solar ROI by 20–35%.

Search for the best buyback plan in your area using the Energy Scout incentive finder.

Stacking Your Incentives: A Real-World Example

Let's walk through a concrete example for a homeowner in the Dallas-Fort Worth area served by Oncor, installing a 10 kW solar system with a 13.5 kWh battery:

System cost: $25,000 (solar) + $16,000 (battery) = $41,000 total. Federal ITC (30%): -$12,300. Oncor battery incentive ($300/kWh): -$4,050. Sales tax savings (8.25%): -$3,383 (already excluded from quoted price in most cases). Net cost after incentives: approximately $24,650 — a 40% reduction from the sticker price.

On top of that, the property tax exemption protects an estimated $20,000+ in added home value from being taxed, saving another $320+ per year.

With annual electricity savings of $2,500–$3,500 (depending on usage and buyback plan), the payback period for this system lands between 7 and 10 years, with 15+ years of free electricity afterward.

The Trend to Watch: Battery Incentives Are Growing

The biggest shift in the Texas solar incentive landscape is the move toward battery-focused programs. Oncor's decision to require storage for its solar incentive, BEC's battery leasing program, and Austin Energy's dedicated storage rebate all point in the same direction: utilities want distributed batteries on the grid.

This makes sense for Texas, where summer peak demand regularly strains the ERCOT grid and winter storms have exposed vulnerabilities. Batteries that can be dispatched during grid emergencies — through virtual power plant programs — provide real value to the grid, and utilities are willing to pay for that value.

For homeowners, this means the financial case for adding a battery to your solar system has never been stronger in Texas. The combination of federal, local, and utility incentives can cover 35–45% of total system costs, and the ongoing savings from avoided electricity purchases and peak-shifting make the investment pay for itself well within the system's warranty period.

Next Steps

Texas solar incentives can be confusing because they vary so much by location and utility. The fastest way to see exactly what you qualify for is to enter your zip code on energyscout.org — we'll show you every federal, state, and local incentive available at your address, along with estimated savings and payback for your specific situation. It takes about 90 seconds and could save you thousands.