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August 13, 2019


Texas Governor extends state tax benefits for solar panels

Solar power is one form of energy that can help to reduce greenhouse gas emissions. Local and federal taxing agencies offer tax abatement programs to help offset the high initial cost that comes with converting to solar power. Lawmakers use these programs to reduce or eliminate property taxes for those who partake in the program.

How has Texas helped encourage the use of solar panels?

Texas has a tax abatement program currently in place. Recently, Texas Governor Greg Abbot signed 86(R) / HB 3143 which amended the program, referred to as the Property Redevelopment and Tax Abatement Act.

What is different?

The amendment resulted in two key changes to the abatement program:

  • Extension. Lawmakers drafted the original act to expire on September 1, 2019. The amendment extends this law to continue for an additional ten-year period.
  • Transparency. The new law also requires those proposing a change to the law hold a public meeting.

The lawmakers behind the changes pointed to the need for local taxing authorities to have some power over “redevelopment zones.” The inclusion of a public meeting was designed to provide local authorities the power to make changes as needed with the accountability that comes with public transparency.

Is there anything else taxpayers should know about this change?

It is also important to note that this is a state tax-specific change. Businesses may also qualify for federal tax savings. This can include a 30% Investment Tax Credit and other savings.

Individuals and business owners who claim solar panel-related tax deductions are wise to keep records to support their tax paperwork. These records can help to defend the business in the event the IRS, state tax agency or local tax authority conduct an audit.