Solar in Texas sits at the intersection of state protections, local rules, and utility policies. Texas solar laws prevent your HOA from banning panels outright, exempt the added home value from property tax, and set a statewide framework for connecting your system to the grid. What the state does not do is guarantee you a payment for excess electricity or, as of 2026, a federal tax credit on a residential install. Here is what applies when you put panels on a Texas home or business.
What Your HOA Can and Can’t Do
Texas Property Code Section 202.010 blocks homeowners’ associations from prohibiting solar energy devices. Any provision in an HOA’s governing documents that tries to ban them is void.1Justia. Texas Property Code Title 11 – Chapter 202
HOAs still get to regulate appearance and placement within limits. For rooftop systems, an HOA can require that panels stay within the roofline, that the top edge of each panel runs parallel to the roof slope, and that frames, brackets, and visible wiring be silver, bronze, or black. For ground-mounted systems in a fenced yard, panels can be restricted from rising above the fence line. Panels on common areas or HOA-owned property fall outside the statute’s protection.
The most common fight is over where on your roof the panels go. Your HOA can designate a location, but you can override that designation if a publicly available modeling tool from the National Renewable Energy Laboratory shows an alternative placement would boost your system’s estimated annual energy production by more than 10%. That number is the pivot point in most disputes.2DSIRE. Texas Solar Rights – DSIRE
You do still need to go through the approval process. The HOA or architectural review committee must act within the timeline in its governing documents, or a reasonable period if none is specified. It cannot withhold approval on a compliant installation unless it determines in writing that the placement would substantially interfere with other homeowners’ use and enjoyment of their property. Skipping the approval step gives the HOA grounds to block you outright.
Property Tax Exemption
Adding solar raises your home’s appraised value. Texas Tax Code Section 11.27 exempts the portion of that increase attributable to the solar system, so your tax bill doesn’t go up because of the install. The exemption covers residential and commercial systems designed primarily for on-site energy production and distribution.3State of Texas. Texas Tax Code Section 11-27
The exemption is not automatic. File an application with your county’s central appraisal district using Texas Comptroller Form 50-123.4Texas Comptroller of Public Accounts. Solar and Wind-Powered Energy Device Exemption and Appraisal Guidelines Until you submit it, you pay tax on the full appraised value including the solar. Most appraisal districts accept applications year-round, but confirm your county’s deadlines.
Federal Tax Credits in 2026
Homeowners installing in 2026 have no federal residential tax credit to claim. The Residential Clean Energy Credit under 26 U.S.C. Section 25D applied to solar placed in service through December 31, 2025, and Congress ended it for property installed after that date. The previously scheduled step-down through 2034 was struck from the statute.5Office of the Law Revision Counsel. 26 USC 25D – Residential Energy Efficient Property6Internal Revenue Service. Residential Clean Energy Credit
Commercial projects are different. The Clean Electricity Investment Credit under 26 U.S.C. Section 48E remains available for systems placed in service through December 31, 2027. Systems under 1 megawatt qualify for the full 30% credit. Larger systems get a 6% base rate, raised to 30% if they meet prevailing wage and apprenticeship requirements.7Office of the Law Revision Counsel. 26 U.S. Code 48E – Clean Electricity Investment Credit
One catch for commercial builds: for construction beginning after December 31, 2025, the system cannot include material assistance from a “prohibited foreign entity” as defined in the statute. Given how much of the solar supply chain is overseas, this can affect component sourcing.
Getting Paid for Excess Electricity
Texas has no statewide net metering mandate. Whether you get credit for excess power your panels send to the grid, and at what rate, is set by your utility or retail provider.8National Conference of State Legislatures. State Net Metering Policies
In the deregulated market, which covers most of the state, some retail electric providers offer solar buyback plans that credit excess generation at or near the retail rate, and others pay closer to wholesale. The gap can add up to hundreds of dollars a year, so buyback rate comparison matters as much as the equipment quote. Watch the lock-in term, credit rollover rules, and whether unused credits expire at year-end.
Two major municipal utilities take their own routes. Austin Energy applies a Value of Solar rate, crediting customers based on what their solar production is worth to the grid, and applies it to residential systems up to 20 kilowatts.9Austin Energy. Value of Solar Rate CPS Energy in San Antonio uses a rebate-based approach instead of traditional net metering credits. If you’re served by a municipal utility or an electric cooperative, ask them directly.
Local Rebates
Some Texas utilities pay upfront rebates to reduce installation cost. Austin Energy offers a $2,500 residential rebate. You have to complete a solar education course and install a qualifying system, and leased systems don’t qualify.10Austin Energy. Solar Solutions For Your Home CPS Energy runs a residential solar program too, with amounts and rules that change periodically. Confirm current terms with your utility before signing anything, since these programs can close once funding runs out.
Permits and Zoning
Local governments set the zoning and building rules. Nearly every city and county requires a building permit for a solar install, which triggers structural and electrical inspections. Many jurisdictions adopt the National Electrical Code for electrical standards. Permit fees vary, and historic districts add architectural review.
Ground-mounted systems draw more scrutiny than rooftop. Some cities set setback requirements — for example, at least 10 feet from side property lines and 15 feet from rear property lines — and may prohibit systems that create glare on adjacent properties or roadways.11eCode360. City of Lakeside City, TX Code of Ordinances – Article 14.03 Solar Energy System Rural counties tend to be lighter on rules, though some have land-use provisions for larger ground-mounted systems. Agricultural land can carry additional guidelines that affect placement or require a variance.
Connecting to the Grid
Before your system can push electricity onto the grid, you need utility approval. PUCT Rule 25.211 governs interconnection of on-site distributed generation up to 10 megawatts connected at less than 60 kilovolts.12Public Utility Commission of Texas. 16 TAC 25.211 – Interconnection of On-Site Distributed Generation
The process is submit an application, sign an interconnection agreement on PUCT-prescribed forms, and pass any required technical review. Connecting without an approved application gives the utility the right to disconnect. For systems using pre-certified equipment, the utility has four weeks from a complete application to finish interconnection. Other systems get six weeks.
For smaller systems, the utility cannot charge pre-interconnection study fees for pre-certified distributed generation up to 500 kilowatts, provided the system exports no more than 15% of the total load on its feeder and contributes no more than 25% of the maximum short-circuit current. Most residential rooftop systems sit well inside those limits. Municipal utilities and electric cooperatives may follow different procedures, so ask your provider before your installer files.
Cooling-Off Period and Contract Terms
Solar sales frequently happen at your kitchen table, which puts them under the FTC’s Cooling-Off Rule at 16 CFR Part 429. You have three business days to cancel any contract for goods or services worth $25 or more when the sale happens somewhere other than the seller’s normal place of business, including your home. The window runs until midnight of the third business day after you sign.13eCFR. 16 CFR Part 429 – Rule Concerning Cooling-off Period for Sales Made at Homes or at Certain Other Locations
The seller must give you a written cancellation form at the time of sale. If they don’t, the window may be extended. The rule applies whether you invited the salesperson or responded to an ad. It does not apply if you initiated the transaction at the seller’s permanent place of business.
Beyond the three-day window, read any solar contract closely. Watch for escalation clauses in leases and power purchase agreements, performance guarantees, who handles maintenance and repairs, and what happens if you sell the house. Texas does not heavily regulate PPAs, so the terms are largely what you negotiate. For businesses signing long-term PPAs, pay attention to buyout provisions and end-of-term options.
End-of-Life Disposal
Panels last 25 to 30 years, and disposal is increasingly regulated. Under federal law, a discarded solar panel is solid waste under RCRA Subtitle D and can qualify as hazardous waste under RCRA Subtitle C if it fails toxicity testing for heavy metals like lead or cadmium. The EPA has started a rulemaking to add solar panels to the universal waste regulations, which would simplify handling and recycling.14US EPA. End-of-Life Solar Panels: Regulations and Management Texas requires solar companies to fully decommission projects at retirement, removing infrastructure and restoring the land. Recycling infrastructure in the U.S. is still developing, so factor eventual disposal into long-term cost planning.