The Renewable Energy Systems Property Tax Exemption

Incentive Type: Property Tax Incentive
Energy, Technology, Infrastructure
Eligible Sector:
Financial Incentive
Time Period:
FY 2015
Governing Body: Comptroller of Public Accounts
What’s it worth?: 100%

As outlined in the Texas Tax Code, provides a commercial, industrial, and residential property tax exemption for the installation or construction of a solar or wind-powered energy device for on-site thermal, mechanical, or electrical energy. Energy storage devices are also covered by the tax exemption.

A variety of biomass technologies fall under the category of “solar” for the purposes of this tax exemption program. Eligible technologies include passive solar space heat, solar water heat, solar space heat, solar thermal electric, solar thermal process heat, photovoltaics, wind, biomass, storage technologies, solar pool heating, and anaerobic digestion.

The tax exemption is applied in the following way:  participants are taxed only on the value of the property before the renewable energy system or device was added to the property; the value of the exemption does not necessarily equal the renewable energy device or system’s cost. Participants must complete Tax Form 50-123 and file the exemption request on or before April 30 for renewable energy projects undertaken in the previous year.

A chief appraiser evaluates the application and supporting materials and may conduct a site visit before making a decision to approve or deny the tax exemption application. Interested property owners should consult the Texas Comptroller’s Office’s online guide – “Solar and Wind-Powered Device Exemption and Appraisal Guidelines”— for additional information.