2024 Texas Commercial Solar Incentives & Rebates

Solar Incentives for Texas Businesses

Curious about commercial solar in Texas and if the numbers pencil for your facility? Texas is the 4th sunniest state in the US, averaging 5,137 kJ/m² of sunlight per year. With this much solar potential comes the advantage of harnessing solar energy and the Lone State has excelled in that, becoming the second-highest solar energy generator, trailing only behind California in the country.

Texas currently generates over 22,872 MW of electricity through solar, powering over 2.6 million homes and businesses. However, that’s not all. The state has been a big supporter of renewable energy, indicated through the various commercial solar incentives Texas offers to businesses seeking to go solar without having to worry about the overbearing upfront cost.

Today, we have covered the most important Texas commercial solar incentives you can explore to save up to 80% of your solar cost.

Modified Accelerated Cost-Recovery Systems (MACRS)

The Modified Accelerated Cost-Recovery Systems (MACRS) play a crucial role in incentivizing the adoption of solar systems for businesses in Texas. Administered by the Internal Revenue Service (IRS), MACRS allows businesses to recover investments in solar energy property through depreciation deductions. For solar systems, MACRS typically allows for accelerated depreciation over a period of five years, enabling businesses to recoup a significant portion of their investment in a shorter time frame. Notably, recent modifications have extended the MACRS benefit to include a 100% first-year bonus depreciation for certain qualified solar projects, further enhancing the financial attractiveness of solar investments. As a commercial solar incentive Texas-based businesses can explore, the MACRS serves as a key driver for businesses looking to harness the economic and environmental benefits of solar energy.

Business Investment Tax Credit (ITC)

Business Investment Tax Credit (ITC)

Business Investment Tax Credit (ITC)

In Texas, businesses investing in solar energy systems can benefit from the Federal Investment Tax Credit (ITC), which offers a significant incentive to offset the cost of installation. Currently set at 30% of the total cost of the solar system, the ITC provides substantial savings for eligible businesses. For example, for a 6 kW system costing $16,320, the ITC can potentially save the business $4,896. Scaling up, a 100 kW system would cost approximately $272,000, but with the ITC, the business could save $81,600. The latest modification to the ITC occurred through the Consolidated Appropriations Act of 2021, which extended the 30% ITC until the end of 2033, providing continued support for businesses investing in solar energy.

Renewable Electricity Production Tax Credit (PTC)

The Production Tax Credit (PTC) offers businesses, nonprofits, and governmental entities a per kilowatt-hour tax credit for electricity generated by solar and other qualifying technologies during the first 10 years of system operation. Unlike the Investment Tax Credit (ITC), which provides a one-time credit based on the cost of the solar system, the PTC reduces federal income tax liability annually based on the electricity produced. While generally, project owners cannot claim both the ITC and the PTC for the same property, exceptions may apply for co-located systems such as solar and storage, subject to further guidance from the IRS. Solar systems placed in service in 2022 or later and beginning construction before 2033 are eligible for a 2.75 ¢/kWh PTC if they meet specified labor requirements or are under 1 megawatt (MW) in size. If you’re looking for novel ways to reduce operating costs ask about our proprietary commercial solar solutions.

Net Metering in Texas 2024

Net-Metering in Texas

Net-Metering in Texas

Net metering is a program that allows utility companies to buy back excess solar energy from solar users. However, the term net metering is slightly different in each state. In Texas, there is no statewide net metering as the term is generally understood. However, retail electricity providers in Texas are permitted, but not required, to compensate customers for electricity produced by distributed renewable energy generation systems and exported to the electric grid.

How to enroll in net metering in Texas

Since net metering isn’t required by law in Texas, there is no generally acceptable enrollment process. However, each Retail Electric Provider offers its interconnection process, albeit similar. For Amigo Energy, customers are required to fulfill the following:

  • Install smart meters to help electric companies keep track of electricity used and generated. 
  • Make sure your area and utility offer solar buyback programs. 
  • Transmission and Distribution Service Providers (TDUs), also known as utilities, must ensure your solar panel’s excess energy can flow safely into the power grid. 
  • Businesses must obtain an Interconnection Agreement. This document declares that the installed solar panels are safe to use and feed energy into the grid. 
  • Surplus electricity and solar buyback plans can only begin once safety clearance has been granted and a buyback contract signed with an electric company. In Texas, these electric companies are also called retail electricity providers (REPs).

Additional Local Incentives, Rebates, & Grants

The Lone Star state offers several other local commercial solar incentives Texas-based businesses can explore depending on where you are in Texas. The bulk of these are rebates are offered by some of the state’s utility companies and local government for certain counties. The state also offers a 100% property tax exemption for solar systems, but not a sales tax on solar equipment like some states.

Texas Renewable Energy Systems Property Tax Exemption

In Texas, property tax exemptions encourage the adoption of renewable energy systems by reducing and sometimes eliminating tax burdens for eligible renewable properties. These exemptions, administered locally, can be partial or total, removing a percentage or the entire value of the property from taxation. While the state mandates certain exemptions, local units have the authority to offer additional ones. Property owners must apply for exemptions through the county’s appraisal district before May 1st, with chief appraisers determining eligibility.

Oncor Electric Delivery – Commercial Solar Program

Oncor Electric Delivery

Oncor Electric Delivery

Oncor Electric Delivery administers a commercial solar incentive program in Texas, offering rebates to businesses within its service area that install photovoltaic (PV) systems. Eligible commercial customers with electric delivery service provided by Oncor can participate in the program, with rebates assignable to the customer, service provider, or a third party.  The program offers a one-time payment plan of up to $9000 per system up to 15kW.

To apply, Systems must be new, connected to the grid on the customer side of the meter, and installed in accordance with all applicable codes and standards. Interested businesses can find more information on the program website.

City of San Marcos – Distributed Generation Rebate Program

The City of San Marcos administers a Distributed Generation Rebate Program, exclusively available to San Marcos Texas Utility customers. This program offers rebates for grid-tied renewable energy system installations, with eligibility contingent upon pre-approval from the utility. Businesses seeking rebates must adhere to specific energy efficiency criteria outlined by the utility, and all systems must be professionally designed and installed. Commercial customers in the region interested in accessing this commercial solar incentive in Texas can obtain further details by visiting the program website or seeking advice from their solar company.

Austin Energy – Commercial Solar PV Incentive Program

Austin Energy provides two solar incentive options for businesses and nonprofits installing solar systems in Austin. Through the Performance-Based Incentive (PBI), eligible businesses can earn additional credits on their monthly electricity bills based on the power generated by their solar system. Alternatively, businesses may opt for the Capacity-Based Incentive (CBI), receiving an upfront payment upon system installation. Additionally, all solar systems earn monthly bill credits towards the electric portion of the bill for the energy produced on-site. Businesses can work with an Austin Energy Solar contractor to qualify for incentives and rebates, choosing between PBI and CBI based on their preferences and needs.

AEP Texas North & Central Company – SMART Source Solar PV Rebate Program

AEP Texas Central Company and AEP Texas North Company administers the SMART Source Solar PV Rebate Program for businesses in the north and central part of Texas, offering rebates to commercial customers installing photovoltaic (PV) systems on their property. Commercial customers receive tiered, capacity-based incentives. To apply, customers must ensure their PV systems are at least 1 kW-DC in size, meet performance and warranty requirements, and comply with all applicable codes and utility interconnection standards. Rebates can be assigned to customers, service providers, or third parties, and details on eligibility and incentive amounts can be found in the Program Guidebook.

USDA – Rural Energy for America Program (REAP) Grants



Texas are leaders in a number of farms and ranches with an economic impact of over $100 billion according to the Texas Department of Agriculture. With the USDA grant, agricultural producers and rural businesses can enjoy up to $500,000 in grants to pay for 25% of renewable energy upgrades such as solar panels. Over the years, through the REAP grant program, the USDA has successfully disbursed over $2 billion in grants. This makes the REAP grant one of the best commercial solar incentives Texas rural and agro-businesses can explore. You will find the application on the REAP website.

Solar Potential

Texas set a new renewable portfolio standard in 2010 to achieve 10000 MW capacity by 2030 from its 3272 MW in 2010. In 2024, the state generates 22,872 MW from solar energy alone, second only to the Golden State, more than doubling its RPS. As the 4th sunniest state in the country, there is a lot of solar energy potential in the Lone Star state and commercial solar incentives Texas businesses can enjoy. The state and its utilities understand the financial toll of undergoing a commercial solar system and that is why there are several incentives to help you pay for your solar system faster. While the average payback period for solar systems is over 10 years in Texas, with incentives, businesses can start earning from their solar system barely half that time.

Understanding the Electric Utility Landscape and Rates

Texas was one of the first few states to deregulate its electricity in the early 2000s. Today, as a result of its deregulated market landscape, it provides commercial customers with the freedom to choose their electricity providers. This deregulation has fostered competition, leading to favorable commercial electricity rates. Currently, Texas commercial customers benefit from some of the lowest electricity rates in the nation, ranging between 9.02¢ and 8.85¢ per kilowatt-hour. This competitive pricing underscores the advantages of Texas’ deregulated market, offering businesses greater control over their energy costs and promoting economic growth.

Impact on Solar Energy Decisions

The impact of solar decisions in Texas goes beyond financial gains from savings in electricity bills and payments from net metering and other incentives. Solar investments in Texas have had a significant impact on the state’s energy landscape, bolstering over 6% of the state’s 15% energy source. The expansion of solar infrastructure has led to job creation, economic growth, and increased energy affordability for consumers. Furthermore, solar investments contribute to environmental sustainability by reducing greenhouse gas emissions and mitigating the effects of climate change. Texas’s vast land availability and abundant sunshine make it an ideal location for solar projects, positioning the state as a leader in the transition to clean energy. As solar technology continues to advance and costs decline, the impact of solar investments in Texas is expected to grow even further in the coming years.

Are Solar Panels Worth It in Texas?

Prices of solar panels have fallen by 47% in the last 10 years in Texas. Considering the decreasing cost of solar panels, the various commercial solar incentives Texas offers, and its abundant sunshine, solar panels are worth it from a financial and strategic standpoint for businesses. You can spend a fraction of the cost of setting up a solar system and have your system earn through its 25-year lifespan. However, we suggest you contact our solar company for a free proposal.

Why Choose Commercial-Solar.org?

  • Immediate Savings: Your company’s solar project will be 100% paid for by incentives, resulting in immediate electricity cost reductions from the first month of operation.
  • No Upfront Costs or Loans: There are no out-of-pocket expenses or long-term loans required, eliminating financial barriers to solar ownership.
  • Full Ownership: Unlike Power Purchase Agreements (PPAs) or leases, you won’t have to share 80% of the benefits with a third party—your company will own the solar array outright.
  • No CapEx Requirements: Your company won’t need to allocate capital expenditure budgets or make construction payments, streamlining the implementation process.
  • Proven Track Record: With over 40 commercial solar projects completed nationwide, including various industries like school districts, retail, manufacturing, and multi-family properties, Commercial-Solar.org has the expertise and experience to meet your solar needs in Texas.

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