Texas is the second-largest US solar market by installed capacity — and one of the most unique for compliance. There’s no statewide net metering mandate, the grid is operated by ERCOT rather than regional ISOs, and solar economics vary substantially depending on which city (and which retail electric provider) a customer chooses.
This guide covers how interconnection, net metering, and permitting actually work in Texas.
Texas Solar Growth
Texas added over 8 GW of solar in 2024, making it the top US state for utility-scale solar additions. Residential and commercial solar is growing rapidly in Austin, Houston, Dallas, and San Antonio. The deregulated electricity market creates both opportunity (competitive REP buyback programs) and complexity (no single statewide policy).
The Texas Grid Structure
Understanding Texas solar compliance requires understanding the grid structure:
| Entity | Role |
|---|---|
| ERCOT | Grid operator — manages transmission system for ~90% of Texas |
| TDSP (Oncor, AEP, CenterPoint, TNMP) | Owns and operates distribution lines; approves interconnection |
| REP (Reliant, TXU, Green Mountain, etc.) | Retail electricity provider; bills customer; may offer buyback |
| PUCT | State regulator — sets overall rules for the market |
A residential solar customer in Dallas interacts with:
- Oncor for interconnection (grid connection approval)
- Their REP for billing, net metering/buyback program, and electricity rates
- The City of Dallas building department for the permit
These are three separate entities, three separate processes.
Net Metering and Buyback: Utility by Utility
Texas has no statewide net metering law. Each utility or REP sets its own program:
Austin Energy (Municipal Utility — Austin)
Austin Energy has the strongest residential solar program in Texas:
- Value of Solar Rate (VOSR): Flat rate of approximately $0.10/kWh for exported solar
- Available for systems up to 20 kW
- No monthly minimum charge or fixed interconnection fee
- One of the most installer-friendly programs in the state
CPS Energy (Municipal Utility — San Antonio)
- Demand Response Programs: CPS Energy offers solar buyback at avoided cost rates
- Rate approximately $0.04–0.07/kWh for exported energy
- SolarEdge and similar optimizers compatible with CPS requirements
- SunPower, Tesla Solar available through CPS-approved installer lists
Oncor Territory (Dallas-Fort Worth)
Oncor is a regulated TDSP — it does not sell electricity. REPs operating in Oncor territory offer various buyback programs:
| REP (Example) | Buyback Type | Approximate Rate |
|---|---|---|
| Green Mountain Energy | Retail rate buyback | Near retail (~$0.10–0.14/kWh) |
| Reliant | Buyback credit | Varies by plan |
| TXU Energy | Solar buyback option | Plan-dependent |
| Rhythm Energy | 1:1 retail rate | Retail rate for exports |
Help Customers Switch REPs
In deregulated Texas, customers can switch their REP without changing their TDSP or grid connection. A customer on a poor buyback plan can switch to a REP with retail-rate solar buyback during their contract renewal. Factoring the best available REP buyback into the proposal significantly improves the financial case.
CenterPoint Territory (Houston)
Similar to Oncor territory — CenterPoint handles interconnection, REPs handle billing. Houston has strong solar irradiance but historically limited retail-rate buyback options compared to Austin.
AEP Texas (West Texas / Coastal Bend)
AEP Texas serves rural and smaller markets in West and South Texas. Buyback programs through AEP Texas REPs. West Texas has exceptional solar resources (one of the highest irradiance regions in the US) and growing commercial/utility solar development.
TDSP Interconnection Process
All solar installations in Texas connect through the TDSP’s distribution system. The interconnection process:
| Step | Oncor | AEP Texas | CenterPoint |
|---|---|---|---|
| Online application | oncor.com/solar | aeptexas.com | reliant.com (via CenterPoint) |
| Required documents | System specs, inverter cut sheet, one-line diagram | Same | Same |
| Residential processing time | 15–20 business days | 15–30 business days | 20–30 business days |
| Commercial processing | 30–90 days | 30–90 days | 30–90 days |
| Meter upgrade | TDSP installs bi-directional meter at no charge | Same | Same |
All Texas TDSPs require inverters to meet IEEE 1547-2018 interconnection standards. UL 1741 SA (Supplement A) listing is the common product-level certification that demonstrates IEEE 1547-2018 compliance.
Texas AHJ Permitting
Texas has no statewide streamlined solar permitting law. Each jurisdiction sets its own rules.
Major City Permit Requirements
| City | Permit Portal | Approximate Timeline | Notes |
|---|---|---|---|
| Houston | Houston Permitting Center | 1–3 weeks | Online submittal available |
| Dallas | Dallas Development Services | 2–4 weeks | SolarAPP+ pilot in progress |
| Austin | Austin Development Services | 1–2 weeks | Streamlined solar process |
| San Antonio | San Antonio Development Services | 1–3 weeks | CPS Energy coordination required |
| Fort Worth | Fort Worth DCS | 2–3 weeks | NEC 2020 adopted |
Most Texas cities have adopted NEC 2020 as their electrical code baseline. A standard Texas residential permit package includes:
- Completed permit application
- Three-line or single-line electrical diagram with NEC 690 calculations
- Site plan showing roof layout, array location, setbacks
- Equipment cut sheets (modules, inverter, racking)
- Structural letter (if required by AHJ for racking attachment)
Texas Solar Licensing
| License | Requirement | Issuing Authority |
|---|---|---|
| Master Electrician | Required for all electrical work in solar installations | Texas TDLR |
| Journeyman Electrician | Can perform work under master electrician supervision | Texas TDLR |
| Residential Appliance Installer | For some residential-only scopes | Texas TDLR |
Texas does not have a dedicated solar contractor license. The electrical work in solar installations falls under the Master Electrician license. Many solar companies maintain their own master electrician on staff or use a licensed electrical subcontractor.
License verification: tdlr.texas.gov/electrician
Texas Incentives
| Incentive | Description | Who Qualifies |
|---|---|---|
| Federal ITC (30%) | 30% of total system cost | All Texas solar customers |
| Property Tax Exemption | Solar equipment is exempt from Texas property tax | All Texas homeowners |
| Sales Tax Exemption | Solar equipment purchases exempt from state sales tax | All buyers |
| Austin Energy Rebates | Up to $2,500 for residential storage | Austin Energy customers |
Texas does not have a state income tax solar credit. The absence of state income tax means the federal ITC is the primary incentive, along with the property and sales tax exemptions.
Texas Property Tax Exemption
Texas Tax Code Section 11.27 exempts the added value of solar and wind energy devices from residential and commercial property taxes. A $20,000 solar installation does not increase the property tax assessment — a meaningful benefit in a state with high property tax rates (typically 1.5–2.5% of assessed value annually).
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Frequently Asked Questions
Does Texas have net metering?
No statewide net metering mandate exists. Austin Energy and CPS Energy (municipal utilities) offer the strongest programs. In Oncor, AEP, and CenterPoint territory, customers choose their REP — and some REPs offer retail-rate buyback. Always compare REP programs for each customer’s specific service area.
What licenses are needed to install solar in Texas?
A Master Electrician license from Texas TDLR is required for electrical work on solar installations. There is no separate solar contractor license in Texas.
How long does interconnection take in Texas?
TDSP interconnection typically takes 15–30 business days for residential systems under 10 kW. Commercial systems take 30–90 days. Add AHJ permit time (1–4 weeks) for total project timeline.
