Texas State Tax Incentives for Going Green

Property Taxes

• When a green system is installed for a business or a home, there often can be an immediate increase in the property value in terms of energy efficiency. Under the Renewable Energy Systems Property Tax Exemption, the Texas property tax code allows for an exemption of the appraised value of the property when a wind-powered or solar-powered system is installed. This is designed to stimulate growth on both a micro and a macro level. When an individual installs the necessary equipment on his property, he benefits in terms of receiving a tax incentive, as well as helping reduce energy costs. At the same time, he stimulates the businesses supplying him with the materials that he needs to go green.

Solar Cities

• While not every city is a solar city, three cities in Texas have been given the designation of "solar cities" by the United States Department of Energy. These three Texas cities are Austin, Houston and San Antonio. Businesses and residents in those cities have been given technical and financial support to assist in expanding solar programs, as well as given tax rebates on installation costs and increased property value. In additional, qualified homes and businesses can benefit from federal programs designed to create incentives to go green.

Rebate Programs

• Although they don't provide tax incentives, some programs in Texas offer financial rebates for "going green." Most of the state programs are not provided by the state government. Instead, they are furnished through the power companies. For example, Austin Power offers a rebate of around $2.50 per watt for the green systems installed. This applies up to $15,000. While the average system in Texas costs $7 per watt, the incentive is designed to facilitate long-term benefits. Local utility companies can provide information about any rebate programs.

Tax Credits

• There are also tax credits provided by the federal government in areas such as purchasing hybrid vehicles or increasing the efficiency of a home or business. Tax credits are economically more attractive than tax deductions, because a tax credit reduces the overall tax base, while deductions simply represent a percentage of taxes due.