What the law exempts

Texas Tax Code section 11.27 exempts "the amount of appraised value of real property" that "arises from the installation or construction" of a solar energy device on it, as long as the device is "primarily for production and distribution of energy for on-site use." Put simply, the appraisal district keeps valuing your house as if the panels weren't there.

Two limits are built into that wording. The exemption covers only the value the solar system adds, not the rest of the house. And it covers systems that mainly power the property they sit on. Rooftop panels that run your home and send the extra to the grid fit that description; a solar farm built to sell power does not.

Overhead view of a kitchen table with a blank property tax envelope, reading glasses, a pen and a small wooden model house with solar panels on its roof, in warm afternoon light
The state's own summary

"The State of Texas does not offer grants or rebates for installing solar panels." The property tax exemption is the state-level break that exists.

Quote from the Public Utility Commission of Texas consumer page on home solar.

Who qualifies

  • Homeowners who own their panels. Bought with cash or a loan, the added value is exempt under section 11.27(a).
  • Owners of leased systems. Since September 1, 2021, section 11.27(a-1) also exempts a device's value for whoever owns it, "regardless of whether the person owns the real property" it sits on. That lets a solar company that owns leased panels on your roof claim the exemption for its equipment.
  • Any county. It's a state exemption, so it applies the same way in every Texas county. You file with the appraisal district for the county where the home is.

There is no income limit and no cap on system size in the statute. The test is what the system is for: producing energy mainly for use on the property.

What counts as a solar device

The law defines a "solar energy device" as equipment designed to turn sunlight into thermal, mechanical or electrical energy, to store the converted energy, or to distribute it. That covers rooftop panels and their inverters and wiring, and the definition names storage of converted solar energy as well. Form 50-123 asks you to describe each device, its location and quantity, so list the panels and any battery the panels charge.

Solar water heaters convert sunlight into thermal energy, so they fit the same definition. Whether a given battery qualifies is the chief appraiser's call, based on what it stores; a battery charged only from the grid isn't storing solar energy.

How to file Form 50-123

The form is the Comptroller's "Exemption Application for Solar or Wind-Powered Energy Devices," Form 50-123. It goes to your county appraisal district, not to the Comptroller.

  1. Get the form from the Comptroller's property tax forms page or from your county appraisal district.
  2. Fill in sections 1, 3 and 4: the owner, the type of device (solar), and a description of the system with its physical address and, if you know it, the appraisal district account number.
  3. Attach proof. The form asks for pictures of the system and invoices for the equipment and installation if you have them.
  4. Sign section 6. It's a sworn statement. A false statement can be a Class A misdemeanor or a state jail felony under Penal Code 37.10.
  5. File between January 1 and April 30 of the tax year you want the exemption to start. Texas appraises property at its value on January 1 (Tax Code 23.01), so panels installed during 2026 first show up on the 2027 appraisal. File for those between January 1 and April 30, 2027.

If you lease, ask the leasing company whether it files for the equipment it owns, since section 11.27(a-1) puts the claim with the owner of the device.

After you file

The chief appraiser can ask for more information under Tax Code 11.45. You have 30 days to send it, or the application is denied; for good cause the deadline can be extended once, by up to 15 days. Once the exemption is granted, you don't reapply each year unless the chief appraiser asks you to or you add equipment that wasn't on the first application.

Check your next notice of appraised value. If you think the solar system was counted in the value anyway, raise it with the appraisal district before the protest deadline.

If you sell or remove the panels

The form puts a duty on you: if your property stops qualifying, you must tell the chief appraiser in writing before May 1. Taking the system down is the obvious case. When you sell the house, the exemption doesn't follow you; the buyer files their own Form 50-123 for the system they now own. Our guide to selling or buying a Texas home with solar covers the rest of the sale.

Other Texas incentives

The exemption is the only statewide break. The 30% federal credit for home solar ended for systems placed in service after December 31, 2025. What's left comes from utilities: Austin Energy's rebate and Value of Solar credit, the small Oncor, CenterPoint and TNMP programs paid through installers, AEP Texas's SMART Source program, and whatever your utility or retail plan pays for power you send back. Our Texas solar incentives guide lists them, and the buyback guide explains the part that matters most to your monthly savings.

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Common questions

Do solar panels raise property taxes in Texas?

Not on the solar part. Texas Tax Code 11.27 exempts the appraised value that a solar energy device adds to your property, as long as it mainly produces energy for use on site. You have to claim it once with Form 50-123.

What form do I use for the Texas solar exemption?

Form 50-123, the Comptroller's Exemption Application for Solar or Wind-Powered Energy Devices. File it with your county appraisal district, not with the Comptroller.

When is the deadline?

File between January 1 and April 30 of the tax year you want the exemption for. For panels installed during 2026, that means January 1 to April 30, 2027.

Do I have to reapply every year?

No. Once the chief appraiser grants it, it stays on unless the appraiser asks you to reapply or you add equipment. You must tell the appraiser in writing before May 1 if you stop qualifying.

Does the exemption cover leased solar panels?

Since September 1, 2021, Tax Code 11.27(a-1) exempts a solar device's value for its owner even if that owner doesn't own the land. With a lease, the company that owns the panels is the one that can claim it for its equipment.

Does a home battery count?

The law's definition of a solar energy device includes equipment that stores the energy converted from sunlight. List any battery the panels charge on the form, and the chief appraiser decides whether it qualifies.

This page explains Texas law in plain English and is not tax or legal advice; your appraisal district decides each application. Sources: Texas Tax Code 11.27 · Tax Code 23.01 · Comptroller Form 50-123 · PUCT: Thinking about solar panels for your home? · IRS: Residential Clean Energy Credit. Reviewed October 2026.

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