Is solar tax-exempt in Texas?

Yes. Under Texas Tax Code §11.27, the increase in appraised value from qualifying solar or wind devices is 100% exempt from property taxation. You still file annually as usual; the exemption simply prevents the solar-added value from raising your taxable value.

How do I claim the solar property tax exemption?

Complete Form 50-123 and file it with your county appraisal district between January 1 and April 30. Include invoices and supporting documents. If the chief appraiser requests more information, respond within 30 days to avoid denial.

Does Texas have a state solar tax credit?

No. Texas has no state solar tax credit. The 30% federal Investment Tax Credit (ITC) expired on 31st December 2025.

Do leased solar panels qualify for the exemption?

Generally no. Leased or third-party owned systems are typically treated as personal property and don’t qualify for the real property exemption. Ownership of the system is key for eligibility.

Which devices qualify for the exemption?

Eligible devices include solar photovoltaic panels, solar thermal systems (e.g., water or pool heaters), certain on-site energy storage used with the system, and wind-powered energy devices installed on the property.

Can my HOA stop me from installing solar panels?

Texas HOAs generally cannot prohibit solar installations under HB 362. Reasonable restrictions for safety, placement, and aesthetics may apply, and most associations still require architectural review approval.

When are the filing deadlines?

File beginning January 1 and no later than April 30 for the tax year you’re claiming. Filing early allows time to respond to any follow-up requests from the appraisal district.

Feb 10, 2022

Last updated on Mar 31, 2026

Texas Solar Property Tax Exemption — How to Apply with Form 50-123

By Harsha N Hegde

Quick Answer: Under Texas Tax Code §11.27, homeowners receive a 100% property tax exemption on the increase in appraised value caused by installing solar or wind energy devices. You must file Form 50‑123 with your county appraisal district by April 30. This exemption is different from a tax credit — Texas has no state solar credit. The 30% federal tax credit expired on December 31st 2025.

What is the Texas Solar Property Tax Exemption?

Texas offers a 100% exemption on the increase in assessed value from solar and wind-powered energy devices.

Example:

Home value before solar: $300,000
Cost of solar panels: $30,000
Without exemption → taxable value rises to $330,000
With exemption → taxable value stays at $300,000

This means you benefit from higher market value without paying extra property taxes.

Which solar devices qualify?

Rooftop or ground‑mounted solar PV panels
Solar thermal devices (e.g., water heaters, pool heaters)
Certain energy storage systems used onsite
Wind-powered energy devices

How to claim the exemption (Form 50-123)

Complete Form 50‑123.
File it with your county appraisal district between January 1 and April 30 of the tax year.
Include invoices, photos, and other required documents.
If the chief appraiser requests more info, respond within 30 days.
If denied, you may protest with the Appraisal Review Board (ARB).

Examples & savings

Scenario	Without Exemption	With Exemption
Home Value	$300,000	$300,000
Solar Installation	+$30,000	+$30,000
Taxable Value	$330,000	$300,000
Annual Property Tax (2%)	$6,600	$6,000

Savings: $600 per year (and more as property values rise).

Do solar panels increase home value or property taxes?

✅ Increase home value: According to Zillow, homes with solar sell for 4.1% more.
❌ Do NOT increase property taxes: Thanks to the exemption, your taxable value does not go up.
⚠️ Leased panels: If you lease panels, the exemption does not apply.

Does Texas have a solar tax credit?

No. Texas does not offer a state solar tax credit. Instead, it provides the property tax exemption.

HOAs and solar panels

By law, Texas HOAs cannot stop you from installing solar panels on your property (HB 362), except if:

Panels extend beyond your roofline,
Violate safety codes, or
Threaten public health.

You still need architectural review committee approval.

Recent changes & future outlook

The property tax exemption remains in place.
Senate Bill 419 (effective Jan 1st, 2026) extends useful life of solar energy property to not less than 35 years.

FAQs

Do solar panels increase property taxes in Texas?

No — the exemption prevents higher taxable value.

Do property taxes freeze if I get solar?

No — your overall taxes may still rise with market values, but the solar portion is exempt.

Can I lease solar panels and still get the exemption?

No — leased systems are treated as personal property and do not qualify.

Does Texas have solar incentives besides the exemption?

Yes — some local utilities and cities offer rebates. Check with your provider.

Resources

About the Author

Harsha N Hegde is the founder of squaredeal.tax, a DIY platform that helps Texas homeowners protest unfair property tax assessments using comps-based evidence and practical guidance.

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