Tax Incentives

Renewable Energy Incentives

Various tax exemptions, franchise tax exemptions, and franchise tax deductions are available for renewable energy equipment and systems. Renewable energy encompasses solar, wind, ethanol, and biodiesel energy.

Detailed information on a variety of renewable energy exemptions and deductions is available on the State Energy Conservation Office's website. A few possible benefits are described below.

A franchise tax exemption is available to manufacturers, sellers, or installers of solar energy devices. The state also permits a corporate deduction from the state's franchise tax for renewable energy sources. Business owners may deduct the cost of the system from the company's taxable capital or deduct 10 percent from the company's income. Wind energy can qualify under the term "solar energy" for the exemption and deduction.

Texas property tax code permits a 100 percent exemption on the appraised value of solar, wind or biomass energy devices installed or constructed for the production and use of energy on-site. See Texas property tax Form 50-123, "Exemption Application for Solar or Wind-Powered Energy Devices" to claim this exemption.

Texas also offers a loan program to fund energy retrofits in public buildings. The "LoanSTAR" program is targeted to state agencies, school districts, higher education, local governments, and hospitals for financed energy retrofits that pay for themselves in energy cost savings over time.

Renewable energy incentives are administered through the State Energy Conservation Office. For more detailed information on possible incentives, click here.

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