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Texas Solar Rebates and Incentives

How Much Can You Save on Solar in Texas?



Texas receives 2850 hours of sunlight each year (of a possible 4383) with an average of 7:48 hrs of sunlight per day. In 2021, renewable resources accounted for almost one-fourth of in-state power net production.

Texas used 461 Million British Thermal Units (Btu), making it 6th in the ranking of total energy consumption per capita in US states for 2020.

The Lone Star state generated around 14% of the nation's total renewable power output. Besides that, Texas generates around one-fifth of the nation's power from non-hydroelectric renewable sources.

Texas Solar Tax Credit and Incentives at a Glance

Texas Solar Incentives State or Federal Program Overview
Federal Solar Tax Credit (ITC) Federal Texas residents may take advantage of the Federal Solar Tax Credit and obtain a savings of 30% applied to their tax returns.
Texas Solar Property Tax Exemption State Texas will exclude the increase in house value resulting from installing a solar energy system from property taxes.
Solar Energy Devices Franchise Tax Exemption State Texas permits businesses to deduct the cost of solar energy equipment from their franchise taxes.
Texas Solar Rights State This law provides equitable access to solar panel installations and renewable energy for all Texans.
Net Metering Local Net metering permits Texas residents who generate extra energy to apply it to their next electric payment as a credit. All energy suppliers must give this choice to households.
TXU Energy Home Solar Buyback Plan Local Consumers might be compensated for the extra energy produced by their solar installations.
American Electric Power Local (AEP) Solar Rebate AEP customers in Texas are eligible for a financial incentive ranging from $2,500 to $8,500 per kW of solar electricity put on their property.
CPS Energy Solar Rebate Local Clients are able to receive a financial incentive for each kilowatt-hour of solar energy put on their properties.
Austin Energy Solar Rebate If you reside in Austin, you may be eligible for a solar rebate program that provides between $2,500 and $8,500 for every kW of solar power put in your home.


Federal Solar Tax Credit in Texas

What is the solar tax credit?

The federal residential solar energy credit is a tax incentive that a taxpayer can claim for the cost of a solar PV system installation. This renewable energy tax credit is also referred to as the Investment Tax Credit (ITC).

Parties who install solar PV systems in 2020 and 2021 are qualified for a 26% tax credit. In August 2022, Congress extended the ITC, increasing it to 30% for installations between 2022 and 2032. Systems installed by December 31, 2019 or earlier were also eligible for a 30% tax credit.

This will decline to 26% in 2033 and 22% in 2034. The tax credit will expire in 2035 unless Congress renews it.

The federal solar tax credit applies to both residential and commercial properties, and there is no limit on its total value.

How does it Work?

When you purchase a solar photovoltaic (PV) system during the tax year, you are able to claim a Federal Solar Tax Credit on your federal income taxes for a portion of the system's cost.

The ITC offered a 26% tax credit in 2021 for systems installed between 2020 and 2022. The program currently offers 30% off for systems installed between 2022 and 2032. Hence, while determining whether to install solar panels, consider a 26% to 30% reduction.

It is important to remember that homeowners can only claim the credit once. If the taxes they owe are less than the credit they earned, their credit will carry over to the following year.

What impact does it Offer to Homeowners in Texas?

Texas homeowners can take advantage of the full credit even if their income taxes owed are lower than the credit value when the system was installed. This is because the program allows them to roll over any unused credit for five years.

As a result, they can still take advantage of the full amount of the credit, even if their income tax liabilities are too low the year they install the systems.

Installing a photovoltaic system before the year 2032 will qualify you for a federal tax credit equal to 30% of the cost of your solar panel system. This 30% discount applies to the total system cost (equipment, labor, and permits).

An individual who installs a $20,000 solar energy system would be eligible for a federal tax credit of $6,000 ($20,000 multiplied by 30%).

The Texas renewable energy tax credit will be reduced to 26% in 2033.

What's the rate schedule?

The federal credit tax rate is currently fixed at 30%. With the passage into law of the Inflation Reduction Act, this rate was hiked to 30% from 26% in 2022. The planned changes to the rates are as follows:

  • 30% for all installations through 2032
  • In 2033, the percentage will decline to 26% for systems installed.
  • It will decrease once more to 22% for solar systems installed in 2034.
  • After 2035, the credit will no longer be available for systems installed.

The administration of George W. Bush established the federal solar investment tax credit under the Energy Policy Act of 2005.

The ITC was established to encourage the use of sustainable energy. It began as a 30% credit capped at $2,000 for residential projects, but in 2008, the cap was dropped. The rate was scheduled to decrease to 26% in 2022, then to 22% in 2023, before expiring in 2024.

However, as earlier mentioned, the federal government extended the credit and reinstated the original credit rate through the Inflation Reduction Act.

What Does the Federal Solar Tax Credit Cover?

Tax credits worth 30% of the following are available to homeowners in 2023 who have recently installed solar panel systems:

  • Solar panel costs
  • Prices for solar-related hardware, such as inverters, wiring, and mounting components
  • Cost of labor for installing solar panels, which may include fees for permits and inspections.
  • Similar to the price of solar batteries, equipment to store solar power is not cheap. Each energy storage system must have a minimum capacity of 3 kilowatt hours (kWh).
  • Retail Taxes on Solar Installation Costs (though some states waive sales tax on PV system equipment)

Eligibility

To be eligible to claim the federal solar tax credit, you have to meet the following requirements:

  • The installation and operation of your solar PV system must have occurred between January 1, 2022 and December 31, 2032.
  • You must have installed your solar system at either your primary or secondary residence.
  • Solar systems may include solar water heaters or solar photovoltaic (PV) panels. Solar water heaters that use the sun's thermal energy to heat water and solar photovoltaic (PV) systems that turn the sun's light energy into electricity are both eligible for the Federal Solar Tax Credit.
  • You must own the solar PV system regardless of whether you bought it upfront or through financing. If you opt for a solar lease or power purchase agreement (PPA), you will not be eligible.
  • The solar system must be brand new and in use for the first time. You can only claim the federal solar investment tax credit once for the "initial installation" of solar PV equipment. If you relocate, you must take your solar panels with you and install them on your new roof. You have to do this because you won't be eligible for a second credit.

How do I Claim the Federal Solar Tax Credit in Texas?

Required Forms: You will need four IRS tax forms to claim your solar tax credit.

Complete Form 1040 as you usually would. At line 5 of Schedule 3 (Form 1040), you should move to Form 5695.

Step 1: Compute the value of your solar tax credit

  • At line 1 of Form 5695, enter the total sum you spent for the installation of your solar system. This includes the materials and installation fees involved with your new solar system.

Step 2: Transfer any remaining tax credit from the previous year

  • Line 12 – If you claimed a Texas solar tax credit last year and had a rollover credit, enter it here.
  • If you are filing for the ITC for the first time, skip to line 13.
  • Put together lines 6b, 11, and 12 on line 13

Step 3: Determine if there are any restrictions on your tax credit

  • Line 14 – For this line, refer to the spreadsheet included at the top of page 4 of the 5695 instructions.
  • Line 1 of the worksheet should provide the entire amount of taxes owed.
  • Line 2 of the worksheet — Other tax credits and adjustments claimed.
  • Line 3 of the worksheet — Subtract Line 2 from Line 1 to determine your credit limit.

Step 4: Estimate how much of the balance (if any) can be carried forward to next year's tax return

  • Go back to your Form 5695.
  • Line 14 – Insert the number from line 3 of the worksheet.
  • Line 15 – Insert the lesser number of lines 13 or 14 (it depends on what your total tax bill is vs. your total tax credits).
  • Line 16 – Calculate the difference between lines 15 and 13 to determine if any credit can be carried forward to the following year.

Step 5: Add the amount on Form 5695 to your tax liability on Form 1040

  • After calculating your solar tax credit amount, you must transfer it to Form 1040 to finish the procedure.
  • Enter the amount from Form 5695 Line 15 on Schedule 3 Line 5.
  • Complete the remainder of Schedule 3 to obtain a sum for Line 8.
  • Insert the amount from line 8 of Schedule 3 on Form 1040 line 20.

Your Texas solar tax credit can now be claimed on Form 1040 to lower your tax bill.


Net Energy Metering in Texas

Net metering, also known as buyback plans in Texas, is typically used to manage excess electricity from solar energy. There are no statewide rules for solar net metering in Texas. But, there are numerous Retail Electricity Providers (REPs) and municipal power companies that will purchase or credit you for your extra solar energy.

  • Every kilowatt-hour that is not used is returned to the grid and subtracted from the following month's electricity bill.
  • Some energy firms grant full credit for excess output, paying you the retail amount per kWh.
  • On the other hand, some electricity providers just grant credit at the cost of generation and not the entire kWh cost.

In net metering, solar generation is subtracted from electricity usage, and only the difference is paid. If generation surpasses consumption, the rules vary according to the energy company: in most situations, you receive a credit carried over to the next month, and in rare cases, you are compensated for excess energy.

Feed-in tariffs (FITs) are the prices applicable to excess electricity exported to the grid. A feed-in tariff gives a different price for surplus generation, whereas net metering rates consumption and production equally. FITs are typically less than the retail price per kilowatt-hour, although utility companies may set them higher to promote solar generation in new markets. If the FIT and retail kWh prices are the same, net metering is effectively implemented.

Performance-based incentives provide compensation based on output, even if there is no surplus supply. This means that the incentive is awarded regardless of whether the electricity generated is consumed or exported.

Remember that utility firms may implement hybrid plans. You may, for instance, discover a company that provides you with complete net metering for all electricity generated below your consumption, transitioning to a reduced feed-in tariff when payment balances are in your favor.

What is the Difference Between Net Metering and Solar Buyback?

In many parts of the United States, net metering rates are set by state legislation. However, solar buyback rates are set by utility providers. Utility companies in Texas are responsible for providing net metering and setting the rates there. Most utility providers in the Lone Star State market bi-directional metering but refer to it as net metering.

Net metering lets you pay the retail price for power and sell back extra power for credit at the same retail price. You end up paying the difference between what you bought and what you got back in credit. Your bill will go down by the number of credits you earn. Companies in Texas offer a buyback option that they call "net metering" but is really "bi-directional metering."

With solar buyback, you purchase your electricity from the Texas electric grid at retail price and receive credit at a solar buyback price. The buyback price is determined by your utility provider for your surplus power. Buyback rates for solar systems are often cheaper than retail prices and vary amongst utility companies.

Retail Electricity Providers' Net Metering Plans for Homes

Due to deregulation, Most Texans have the freedom to choose their power provider. Electricity plans tailored to solar panel owners can often result in greater cost reductions. There are a wide variety of power companies operating in Texas. Each of these companies offers a wide variety of different rates and packages.

Some of the best buyback packages for solar system owners in Texas are offered by the following energy companies:

Almika Solar

  • Amigo Energy
  • Champion Energy Services
  • Chariot Energy
  • Energy Texas
  • Green Mountain Energy
  • Just Energy
  • Octopus Energy
  • Pulse Power
  • Rhythm Energy
  • Shell Energy
  • TXU Energy

Solar Buyback for Residential and Commercial Properties

Austin Energy

Austin Energy is the city's (Austin) utility provider. The utility company administers distinct solar buyback schemes for residential and commercial customers.

Household energy consumers receive a Value of Solar (VOS) credit of 9.7 cents per kWh produced. This incentive is for the complete output of your photovoltaic system, not just the excess. The value is subsequently deducted from your total electricity bill. Austin Energy also offers a $2,500 cash refund for residential solar systems with a minimum capacity of 3 kW.

The VOS credit became available to commercial consumers in January 2018. There are three alternative options depending on the type of service and system capacity.

Along with the Value of Solar (VoS) credit, commercial electricity users with solar arrays may select from the following incentives:

  • Performance-Based Incentive (PBI) — The solar photovoltaic system receives credit for every kilowatt-hour produced over a five-year period.
  • Capacity-Based Incentive (CBI) — The solar power system receives a reward computed in advance based on its installed capacity.

San Antonio: CPS Power

For those who participate in CPS Energy's net metering scheme, the stipulations are as follows:

  • If more electricity is produced than is used in a given month, the surplus is credited at full price. If a home uses 500-kilowatt hours (kWh) from the grid but generates 450 kilowatt hours (kWh) more than it needs, the bill will be for 50 kilowatt hours.
  • If more electricity is produced than is used, the difference is credited at the avoided cost rate. CPS Energy would have had to pay this much to get their hands on that much power from conventional generators.

Small businesses, educational institutions, and charitable groups can all benefit from CPS Energy's solar rebate program. Incentives are $0.60/watt up to 25 kW and $0.40/watt above that. One project can get a maximum of $80,000 in incentives, or 50% of total costs (whichever is less).

  • By employing domestic solar panels, the incentive goes up by $0.10/watt.
  • By using non-local installers, the reimbursement is reduced by 25%.

Net Metering Programs in Dallas-Fort Worth and Houston

Houston and Dallas-Fort Worth have a deregulated market where electricity consumers can select their providers. This contrasts Austin and San Antonio, where solar power regulations are determined by a single municipal utility. The primary retail power suppliers (REP) with solar buyback schemes will be the subject of this section. These REPs are Rhythm, Shell Energy, Green Mountain, TXU, and Reliant.

Rhythm Energy Rooftop Solar Buyback Program

Texas residents can take advantage of Rhythm Energy's famous one-for-one kWh solar buyback program. The Rooftop Solar Buyback Plan is a fixed energy rate 12-month contract. This implies that regardless of what the Texas power market does, your rate will not change.

Shell Energy Solar Buyback Program

The Solar Buyback program is offered by Shell Energy in the Oncor and CenterPoint service zones. All excess solar photovoltaic system generation is credited at the current wholesale price. This surplus is then deducted from subsequent power bills. There is no maximum solar buyback amount. Any unused credits are carried over to the following month until needed. Nevertheless, cash payments are not a possibility.

Green Mountain Energy Renewable Rewards Program

This energy provider's program credits surplus generation at the retail rate. You cannot, however, accrue more credit than you can use (no rollover to the next month).

You are eligible for the Renewable Rewards program if you have a bi-directional electric meter. Also, your solar system's capacity must be under 50 kW. Wind turbine owners can also benefit from this program.

TXU Energy Home Solar Buyback Program

The Home Solar Buyback program from TXU Energy allows you to receive credit for excess generation at the retail energy rate. However, your usage determines the maximum monthly credit.

Champion Energy Solar Buyback Programs

One of Texas' REPs with the fastest growth is Champion Energy. They provide a number of electricity programs that include a solar buyback option and also provide other advantages:

  • Champ Saver: kWh price fixed for 1-3 years.
  • Champ Silver: Customers 60 and above receive discounts. Upon registering for at least 24 months, you'll receive $50 in free LED lights. There are also incentives for smart appliances.
  • Green Energy: All of the energy you use comes from environmentally friendly sources.
  • Free Weekends: - A weekend electricity-free period that lasts for 18 to 24 months.
  • Champion Energy uses the wholesale market's real-time settlement price, which shifts every 15 minutes when you export excess solar energy. As the wholesale price can rise far above your retail price during the summer when demand is at its highest, this is a significant benefit.

Net Metering at El Paso Electric Company

Net metering solar power systems up to 50 kW are available from El Paso Electric (EPE), which essentially covers all household systems. You cannot, however, oversize your solar PV system because it must be sized based on the amount of electricity you use in the year before installation.

Net Metering by the Brownsville Public Utilities Board

Almost 6,300 commercial customers and approximately 50,000 residential customers are served by the Brownsville Public Utilities Board. For solar power and mini-wind turbines, Brownsville PUB provides a net metering program.

The City of Brownsville Building Permit Division must approve both system types, and extra electricity is credited toward the Fuel & Purchase Energy Fee (FPEC). A one-time fee of $100 covers the cost of changing to a bidirectional power meter.

How to Enroll for Net Energy metering in Texas

  • Texas solar buyback programs are as varied as their retail electricity providers in the deregulated market. Each company sets its own rules. Some offer better deals than others.
  • In most cases, your solar installer automatically enrolls you in net metering. First, your electric company will have to replace your former meter with a two-way one. Now, you’re ready to begin taking advantage of the policy.
  • In some rare cases, you might have to fill out and submit an interconnection agreement yourself before the provider will begin metering back-flowing energy.
  • You should reach out to your solar provider before converting to see if there’s any action you need to take to access this benefit. Also, you should check your electric bills after opting into net metering to double-check that your production is being credited.
  • In some locations of Texas, energy is not deregulated, and just one provider is available. However, net metering is available in Austin, San Antonio, and El Paso, among other cities, with a single electric utility.

What is the Texas Solar Rights Law?

The Texas Solar Rights Laws are state-level statutes that prohibit or limit solar installation regulations. The adoption of HB-362 reduced the ability of homeowners associations (HOAs) and property owners associations (POAs) to outrightly prohibit solar panels.

To comply with this law, homeowners who reside in HOA-governed communities must continue to follow the standard procedures for requesting modifications, such as submitting a written request or application to an appointed Architecture Review Committee or comparable council. HB-362 changed Section 202.010 of the Texas Property Code as detailed below.

Section 202.010 of the Texas Property Code states that HOAs and POAs cannot prohibit or restrict a property owner from installing a solar energy device, as defined by Section 171.107 of the Texas Tax Code. The following exceptions, however, do give HOAs the authority to restrict solar panels:

  • If the solar energy gadgets threaten public health and safety or are prohibited,
  • If they are located on common land inside the subdivision, then this clause applies.
  • If they protrude above the roofline, do not correspond to the roof's slope, or are not parallel to the roofline, they must be removed.
  • If they are ground-mounted and protrude beyond the homeowner's fence, they are prohibited.
  • If they are fitted improperly, the warranties will be voided.
  • If they contain a component that is not a tone of silver, bronze, or black
  • If they are built without the HOA's prior approval

HOAs may also regulate the placement of solar panels on a homeowner's roof.

However, homeowners may petition for an alternative location if they demonstrate that the alternative location would increase the estimated annual energy production of the solar panels by more than 10% using a National Renewable Energy Laboratory modeling tool, such as the PVWatts Calculator.

SB 1626 closed previous gaps by allowing developers to prohibit homeowners in residential subdivisions from putting solar panels on their homes during the course of construction if the subdivision has 50 or fewer units.


Texas Property Tax Exemption

There are a few tax exemptions and deductions that can be claimed in Texas. However, there is not yet a tax exemption scheme that helps individuals pay for renewable energy equipment.

The state exempts 100 percent of the appraised value of an on-site solar, wind, or biomass energy-generating device from property taxes. In addition, solar energy gadget producers, dealers, and installations are exempt from the franchise tax. Moreover, Texas enables a deduction from the state's allocated margin for the procurement and usage of certain solar energy systems in Texas.

Solar and Wind-Powered Energy Devices Property Tax Exemption

Texas grants its citizens a property tax exemption that exempts them from paying taxes (using form 50-123). This exemption pertains to the portion of the property's assessed worth that results from the installation or development of solar or wind energy equipment. The primary purpose of the device must be the generation, distribution, or storage of thermal, mechanical, or electrical energy for on-site usage. A variety of biomass technologies are included in the wide definition of "solar."

For example, if your property is appraised and taxed at $150,000 and you install a $15,000 system that improves the property value, the exemption applies to the extra value, so you will only be taxed on the property value prior to the addition of the system.

  • Incentive Type: Property tax exemption - commercial, industrial, and residential.
  • Eligible renewable technologies include the following: Passive solar space heating, solar water heating, solar space heating, solar thermal electric, solar thermal process heat, photovoltaics, wind, biomass, storage technologies, solar pool heating, and anaerobic digestion.

The Texas Comptroller's Office offers Solar and Wind-Powered Device Exemption Guidelines, which detail the qualifying solar and wind-powered devices, valuation methodology, and application criteria.

Solar Energy Devices Business Franchise Tax Exemption

An organization that produces, sells, or installs solar (wind) energy devices, meeting the requirements of Section 171.107, or certain component components of such devices, may be eligible for the franchise tax exemption provided by Section 171.056.

  • Incentive Type: Franchise (Business) Industrial and commercial tax exemption.
  • Solar thermal electric, solar thermal process heat, solar photovoltaics, solar water heating, and solar space heating are all acceptable renewable and other technologies. Wind power may still claim the exemption and discount provided by Sections 171.056 and 171.107.

Solar Energy Devices Franchise Tax Deduction

In Texas, a business can deduct the expense of installing a solar energy system in one of two ways. either all of the money spent on the system can be subtracted from the taxable capital, or 10% of the cost can be taken off the top of the company's income. The franchise tax, which is the corporation tax equivalent in Texas, is levied on both a company's taxable capital and its income.

  • Incentive Type: Franchise (Business) Deductions for business and manufacturing expenses
  • Solar water heating, solar space heating, solar thermal electric, solar thermal process heat, and photovoltaics are all acceptable renewable and other technologies. Wind power may still claim the exemption and discount provided by Sections 171.056 and 171.107.

Additional Local Incentives

The following is an overview of the local incentives available in Texas.

  • Oncor Electric Delivery Residential Solar Program: This is the new, grid-connected solar installation rebate scheme from Oncor. The amount of the rebate varies according to qualifying requirements.
  • CPS Solar PV Rebate Program: CPS offers a solar incentive for newly installed solar arrays. The reimbursement varies, but it often amounts to $2,000 per system.
  • City of San Marcos Distributed Generation Rebate Program: Residents of San Marcos, Texas, are eligible for a rebate through this program. It offers up to $1 per installed watt up to $2,500 for each solar project.
  • Austin Energy Residential Solar PV Rebate Program: Customers of Austin Energy who install grid-connected systems are eligible for reimbursement of up to $2,500 per installation.
  • Austin Energy Value of Solar Program: This program is quite similar to Solar Renewable Energy Certificates (SRECs). Austin Energy compensates you for each kWh your system produces at a rate based on the size of your system and your eligibility.
  • Garland Power & Light EnergySaver Solar Rebate Program: This rebate program provides incentives similar to SRECs. For each kWh of electricity your solar panels produce, you can earn credits worth $0.0469.
  • Denton Municipal Electric (DME) Residential GreenSense Energy Efficiency Rebate Program: This is a fantastic solar rebate from DME that offers cash back sums between $0.40 and $1.50 per watt up to $30,000.
  • CenterPoint Energy Residential and Hard-to-Reach Energy Efficiency Program: Customer rebates are available through this program. The credit is worth $0.04 per kWh produced. Over time, this might amount to hundreds of dollars.
  • CPS Home Energy Efficiency Rebate Program: This rebate program offers an upfront rebate of up to $2,500 or 50% of the overall cost of your system, whichever is smaller.
  • City of Plano Smart Energy Loan Program: Affordability and accessibility are two features of the City of Plano Smart Energy Loan Program. It offers low APR financing up to $25,000 with no down payment needed.
  • AEP Texas North and Central Companies SMART Source Solar PV Rebate Program: Depending on the size of your system and your remaining funds, this incentive offers up to $3,000 back for grid-tied solar arrays. However, there is a need for system warranties.
  • City of Sunset Valley PV Rebate Program: This program offers refunds up to 3,000 watts, or a maximum of $3,000 per system, for homeowners.

Renewable Energy in Texas

In 2021, renewable resources accounted for almost one-fourth of in-state power net production in Texas. The state generated around 14% of the nation's total renewable power output. Besides that, Texas generates around one-fifth of the nation's power from non hydroelectric renewable sources.

Wind Energy

Around 80% of Texas' renewable energy power comes from wind. More than a quarter of all U.S. energy in 2021 came from wind farms in this state. This makes Texas the leader in wind-powered electricity production. Many regions in Western Texas have abundant wind resources.

These areas have been recognized as Competitive Renewable Energy Zones (CREZ) by the state's regulatory body. Transmission service companies designed and constructed transmission lines in the CREZ to transmit power from isolated wind farms in the west to metropolitan market areas in the state's east.

Texas became the first and only state to exceed 10,000 megawatts of wind electricity production in 2011. As of January 2022, Texas' wind capacity was more than 35,000 megawatts. This figure accounted for** almost 25%** of the state's total generating capacity and about 80% of its renewable generating capacity.

Solar Energy

Texas has the sixth-highest potential for solar energy in the country. After California, the state produced the most solar photovoltaic (PV) energy in the nation in 2021. Between December 2020 and December 2021, solar capacity at the state's large- and small-scale (less than 1 megawatt) plants almost quadrupled.

The total installed capacity rose from 5,987 to 10,329 megawatts. 128 Solar energy contributed around 3% of total power production in the state. Small-scale solar plants accounted for about 14.3% of the total.

Biomass

In 2021, biomass provided about 0.3% of Texas utility-scale in-state energy output. About 67% of this energy came from wood or wood-derived fuels. In addition, the state has a huge wood pellet mill that converts wood waste into pellets.

This factory has a yearly production of around 500,000 tons. Texas also boasts several biogas plants that convert organic waste into green energy.

A significant proportion of these are wastewater treatment plants and landfills. Two anaerobic digesters convert manure and agricultural waste into methane at the state's periphery. In the agriculturally rich high plains area of the Texas Panhandle, four fuel ethanol facilities create liquid biofuels. Using maize and sorghum feedstock, these facilities can create around 400 million gallons of gasoline-ethanol per year.

The state also has eight biodiesel facilities capable of producing around 380 million gallons of biodiesel per year. In Newton County, Texas, a new refinery will convert one million tons of wood waste into a range of biofuels, including environmentally friendly aviation fuel and renewable diesel.

Hydroelectric Energy

There are less than two dozen hydroelectric power plants in Texas. These facilities provide less than 0.3% of the state's energy because of the state's mostly flat topography and little annual precipitation. As a result, there is minimal opportunity for further hydroelectric development in Texas.

This is in spite of the state's vast number of unpowered dams. Non-potable water in the form of billions of barrels is a byproduct of crude oil and natural gas production in Texas. The water's high temperature—up to 200 degrees Celsius—makes it a promising geothermal resource for power generation.

Low-temperature geothermal resources are used in various areas around the state. Such usage focuses on direct-use applications like ground-source heat pumps.

Guidelines for the state's renewable energy requirement were established in 1999 by the Texas Public Utility Commission. By 2025, the state must have installed renewable energy capacity equal to 10,000 MW, 500 MW of which must come from sources other than wind.

Wind farms in Texas were largely responsible for the state's 2009 achievement of the 2025 target. In January 2022, the state had a non-wind renewable generating capacity of over 9,900 MW at utility scale and approximately 11,500 MW when small-scale solar was included in.

Texas Household Profile

In 2020, the total energy per usage of Texas was** 461 Million British Thermal Units (Btu) (Btu).** This put the state in the 6th position in the list of US states' total energy consumption per capita.

Further analysis of this data by end-use sector indicated that residential and commercial sectors contributed 59.7 and 55.8 Million Btu, respectively. As a consequence, Texas's total energy per capita consumption placed 41st (residential) and 23rd (commercial) in the list of US states. The industrial sector had the biggest overall energy usage per capita, with 248.7, and placed 6th among US states. Another sector with a high total energy usage per capita was transportation, with 97.2 Million Btu. This put Texas in the 6th position among US states.

In 2021, Texas had a total of 11,869,072 housing units. The owner-occupier housing unit for five years (2017-2021) was 62.4%, while the median value for owner-occupied housing units for the same time was $202,600. In terms of building permits granted, there were 265,955 housing permits issued in Texas in 2021. This data ranks the state first among the top 10 states with the most construction permits.