As homeowners in Texas look for ways to reduce their energy bills, solar power has become an increasingly popular solution. One of the significant incentives available for homeowners who install solar panels is the solar tax exemption. In this blog post, we’ll explore how much solar tax exemption homeowners can receive in Texas and how they can take advantage of this incentive.
First, let’s define what a solar tax exemption is. A solar tax exemption allows homeowners to exclude the added value of their solar panel system from their property taxes. In Texas, solar panels are considered a “renewable energy device,” and therefore, their added value can be excluded from the homeowner’s property taxes. This means that homeowners who install solar panels can reduce their property taxes, which can significantly offset the upfront cost of installation.
The amount of solar tax exemption available to homeowners in Texas varies depending on the size and type of their solar panel system. According to the Texas Property Tax Code, the solar tax exemption is equal to the appraised value of the solar panel system or 20,000 dollars, whichever is less. This means that homeowners can exempt the full value of their solar panel system from their property taxes if it’s valued at 20,000 dollars or less. If the solar panel system is valued at more than 20,000 dollars, homeowners can still receive a 20,000 dollar exemption.
For example, if a homeowner installs a solar panel system that’s appraised at 15,000 dollars, they can exempt the full value of their solar panel system from their property taxes. However, if the solar panel system is appraised at 25,000 dollars, the homeowner can only exempt the first 20,000 dollars and will still have to pay property taxes on the remaining 5,000 dollars.
It’s important to note that the solar tax exemption only applies to the added value of the solar panel system. Homeowners will still have to pay property taxes on the appraised value of their home, excluding the solar panel system. Additionally, homeowners who lease their solar panel systems are not eligible for the solar tax exemption since they do not own the system.
To take advantage of the solar tax exemption, homeowners must apply for the exemption with their local appraisal district. The application process typically involves providing documentation of the solar panel system’s installation and appraisal value. Homeowners should contact their local appraisal district for specific application requirements and deadlines.
In addition to the solar tax exemption, homeowners in Texas can also take advantage of the federal solar investment tax credit (ITC). The ITC allows homeowners to deduct 30% of the cost of their solar panel installation from their federal taxes. Combined with the solar tax exemption, homeowners can significantly reduce the upfront cost of solar panel installation and start generating their own electricity.
In conclusion, the solar tax exemption in Texas allows homeowners to exclude the added value of their solar panel system from their property taxes, reducing their overall property tax bill. The amount of solar tax exemption available varies depending on the size and type of the solar panel system, but homeowners can exempt up to 20,000 dollars of the solar panel system’s value from their property taxes. By combining the solar tax exemption with the federal solar investment tax credit, homeowners can significantly reduce the upfront cost of solar panel installation and start saving money on their energy bills. Homeowners should contact their local appraisal district for more information on how to apply for the solar tax exemption and take advantage of this valuable incentive.
