Homeowners should lock in their savings today by taking advantage of solar tax credits and incentives before they disappear
Home solar and backup battery systems reduce reliance on power grids, provide energy stability during periods of extreme weather and significantly reduce utility bills, and they also offer substantial tax and other financial incentives. But a changing political climate could have consequences on the future of tax incentives for solar and energy storage systems.
There’s no time like the present to ensure that reducing your home’s energy costs also comes with all the financial and tax advantages still offered by federal, state, local governments as well as some utilities to lower the upfront cost.
Start with the solar Investment Tax Credit
The federal solar Investment Tax Credit (ITC) was first introduced in 1978 as a 10% tax credit on the cost of solar and wind installations. Over the decades Congress has revised or repealed it many times.. The Energy Policy Act of 2005 increased the value of the ITC to 30% of a system’s cost. This policy was instrumental in helping to establish the solar industry as a viable and reliable energy resource during the 2000s.
The American Recovery and Reinvestment Act of 2009 made unprecedented investments in clean energy, contributing to the fastest growth in solar, wind and other clean energy installations in US history. The bill was extended in 2016, but was supposed to phase down the clean energy tax credits from 30% to 26% in 2020, then 22% in 2021, and disappear entirely by 2022.
The Inflation Reduction Act, passed in 2022 as the single largest investment in climate and the
Solar with battery backup can gain additional rebates and incentives.
environment in US history, doubled down on the ITC, stabilizing these credits to 30% with a gradual stepdown in 2033. This gave the solar industry a significant lift with long-term incentives providing certainty to many locally owned businesses like Longhorn.
Qualified solar electric property includes costs for equipment that uses solar energy to generate electricity, such as solar panels, inverters, batteries as well as installation costs. And there’s still time to claim your full ITC for projects already installed in 2024. If you haven’t yet installed solar, make a plan now to take advantage of the benefits in 2025, before legislators have a chance to make new changes and reduce the level of credits available.
Texas solar incentives and rebates
In addition to federal tax credits, many municipalities across Texas offer rebates and performance-based incentives (PBIs) for home solar or solar with backup batteries. These programs vary but can significantly reduce your initial costs. Whether you’re in Austin, San Antonio, Dallas/Fort Worth, Houston or even rural areas of Texas, it’s worth doing some research or reaching out to qualified Texas solar installer like Longhorn for information about available solar incentives in your area.
Austin Energy was one of the earliest utilities to offer solar rebates and continues to provide a $2500 rebate for home solar systems in its service area. San Antonio’s CPS Energy offers solar rebates to support the adoption of solar for small businesses, schools, and non-profit organizations. Other utilities across the state offer their own programs to help offset the cost of going solar, and some provide additional incentives for battery storage, which keeps the lights on during extreme weather and improves grid stability during peak demand.
Solar Is Exempt from Texas Property Tax Increases
In Texas, both residential and commercial solar installations are exempt from property tax increases due to the added value of the solar system. Through the Texas Renewable Energy Systems Property Tax Exemption, any increase in your property’s appraised value due to certain solar energy systems is 100% exempt from property taxes.
In a state like Texas, where property taxes are among the highest in the nation, this exemption can be a considerable financial sum.
The future of Texas solar incentives and tax credits is uncertain at best. Your savings shouldn’t be.
Time is truly of the essence. If you’ve been considering purchasing a system, now is the time to take the next step, from doing a little more research to reaching out to a trusted solar professional to learn exactly how much you can save with residential solar and energy storage systems.
Installing solar power and energy storage systems in Texas isn’t just good for the environment, it’s good for the budget, too. By taking advantage of the Federal ITC, property tax exemptions, sales tax savings, and local incentives, the financial benefits of installing renewable energy are substantial. And there’s no telling how those benefits may be reduced in the years ahead.
Longhorn is here to help. Contact one of our expert solar advisors for more information on solar incentives today.
