Texas Solar and Wind Energy Device Franchise Tax Deduction


Texas allows a corporation or other entity subject the state franchise tax to deduct the cost of a solar energy device from the franchise tax. Entities are permitted to deduct 10% of the amortized cost of the system from their apportioned margin. The franchise tax is Texas’s equivalent to a corporate tax.

For the purposes of this deduction, a solar energy device means “a system or series of mechanisms designed primarily to provide heating or cooling or to produce electrical or mechanical power by collecting and transferring solar-generated energy. The term includes a mechanical or chemical device that has the ability to store solar-generated energy for use in heating or cooling or in the production of power.” Under this definition wind energy is also included as an eligible technology.

Texas also offers a franchise tax exemption for manufacturers, seller, or installers of solar energy systems which also includes wind energy as an eligible technology.

Program Overview

State: Texas
Incentive Type: Corporate Deduction
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind
Applicable Sectors: Commercial, Industrial
Amount: 10% of amortized cost
Maximum Incentive: None
Start Date: 1982
Web Site:


Authority 1:

Date Enacted:

Date Effective:

Texas Tax Code § 171.107

1981 (subsequently amended)


Source: www.DsireUSA.org

Want to keep up to date with all our latest news and information?
Subscribe to receive FREE TIPS, all new Radio/Podcast Episodes and Videos that will help you start Dropping your Energy Bill!
Enter your email below to join a world of new knowledge and savings!