Texas Solar Property Tax Exemption: Complete Guide for DFW Homeowners (2026)

While the federal solar tax credit expired for residential projects in January 2026, Texas has its own permanent solar incentive that does not expire: the Texas solar property tax exemption under Tax Code §11.27. For Dallas-Fort Worth homeowners, this exemption is worth $10,000-$15,000 over the life of a typical solar system - and most people filing for it do not realize how straightforward the process is.

What Is the Texas Solar Property Tax Exemption?

Texas Tax Code §11.27 states that a solar energy device installed on real property is 100% exempt from property taxation. That means the assessed value of your solar system - which would otherwise be added to your home's taxable value - is completely excluded from your property tax calculation. This is not a credit or a deduction. The value simply does not count.

The exemption applies to both residential and commercial solar installations in Texas and has no expiration date. It has been in effect since 1983 and is unlikely to change.

How Much Does the Exemption Save DFW Homeowners?

The savings depend on your system value and your county's property tax rate. Dallas County's combined rate is approximately 2.0-2.5% of assessed value. Tarrant County (Fort Worth) is similar at 1.9-2.4%.

These are conservative estimates using a flat rate. Many DFW homeowners pay closer to 2.4-2.6% when you include city, school, and county rates combined, which increases the savings further.

Who Qualifies for the Texas Solar Property Tax Exemption?

• ✓You own the property where the solar system is installed (renters do not qualify)
• ✓The solar system is permanently installed on the property (not portable)
• ✓The installation is used primarily for on-site electricity generation (not wholesale power production)
• ✓You file Form 50-123 with your county appraisal district after installation

Leased solar systems present a complication. If you lease your panels, the leasing company technically owns the equipment and would need to file the exemption. Some do, some do not. This is one reason Zencore Solar recommends purchasing your system outright or through a solar loan rather than leasing.

How to File Form 50-123 in DFW

Form 50-123 is the Texas Comptroller's official application for the solar energy exemption. Here is the process for DFW homeowners:

1. 1Complete installation and receive final inspection approval from your city/county
2. 2Obtain a copy of the final interconnection approval from your utility (Oncor for most DFW customers)
3. 3Download Form 50-123 from the Texas Comptroller website or your county appraisal district
4. 4Fill out the form with your property address, system size (kW), and installer information
5. 5Submit to your county appraisal district before the annual deadline (typically April 30 for the current tax year)
6. 6Receive confirmation from the appraisal district that the exemption has been applied

Will Solar Increase My Taxable Property Value in Texas?

This is the most common question we get about the exemption. The answer: solar almost certainly increases your home's market value - Lawrence Berkeley National Laboratory found a $3-$4 premium per installed watt in Texas markets. But because of §11.27, that increased value is excluded from your taxable assessment. You get the equity upside without the tax penalty.

Does the Exemption Stack with Other Texas Solar Incentives?

Yes. The property tax exemption stacks with every other incentive you qualify for, including the Oncor Solar+Storage rebate (up to $9,000 for battery customers), any TXU Energy or Reliant net metering credits, and local utility rebates. None of these reduce your eligibility for §11.27.

The federal residential solar tax credit expired January 1, 2026 for new homeowners. However, the commercial Investment Tax Credit (ITC) remains in effect for business installations started before July 4, 2026.