Solar and Wind Energy Device Franchise Tax Deduction (Texas)

From Open Energy Information


Last modified on December 17, 2014.

Financial Incentive Program

Place Texas

Name Solar and Wind Energy Device Franchise Tax Deduction
Incentive Type Corporate Deduction
Applicable Sector Commercial, Industrial
Eligible Technologies Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind
Active Incentive Yes
Implementing Sector State/Territory
Energy Category Renewable Energy Incentive Programs
Amount 10% of amortized cost

Start Date 1982

Program Administrator Comptroller of Public Accounts

References DSIREDatabase of State Incentives for Renewables and Efficiency[1]


Texas allows a corporation to deduct the cost of a solar energy device from the franchise tax in one of two ways:

  • the total cost of the system may be deducted from the company's taxable capital or,
  • 10% of the system's cost may be deducted from the company's income.

Both taxable capital and a company's income are taxed under the franchise tax, which 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.

Incentive Contact

Contact Name Comptroller of Public Accounts
Department Comptroller of Public Accounts
Address Post Office Box 13528, Capitol Station
Place Austin, Texas
Zip/Postal Code 78711-3528
Phone (800) 252-1381


Authorities (Please contact the if there are any file problems.)

Authority 1: Texas Tax Code § 171.107
Date Effective 1982
Date Enacted 1981 (subsequently amended)

  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]


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