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Apr 28 2023
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Austin energy solar rebate

What Is the Austin Energy Solar Rebate and How Does It Work?

By Solar Incentives by State, Solar Rebates & Incentives No Comments

The benefits of home solar extend beyond the system owners. Rooftop solar provides clean energy with zero additional land use, and can be stored in residential batteries to strengthen the grid during high demand and outage events.

It makes sense, then, that a publicly-owned utility like Austin Energy would incentive rooftop solar adoption — and that’s exactly what they do with a rebate worth $2,500 for residential solar installations.

The Austin Energy solar rebate is among the highest-value incentives offered by a utility, but it takes a little legwork to claim. In this article, we’ll explain how this rebate works and exactly how to claim it.

How does the Austin Energy solar rebate work?

The Austin Energy solar rebate is a $2,500 residential solar incentive available to homeowners that install qualifying solar systems on their homes. In order to qualify for the rebate, the homeowner must:

  • Be a residential customer of Austin Energy
  • Complete an online solar education course
  • Select an Austin Energy Participating Contractor to install your project
  • Meet size and shading requirements
  • Apply for the rebate and receive confirmation from Austin Energy before install

It’s worth noting this rebate only applies to new, purchased solar systems. It can’t be applied retroactively to existing systems or claimed for solar leases or power purchase agreements (PPAs).

That may seem like a lot of hoops to jump through — but it’s really quite simple and worth every penny of the $2,500 to claim this rebate. Let’s take a closer look at each step.

steps to claim the austin energy solar rebate

Screenshot from Austin Energy solar education course.

Austin Energy solar education course

The first step to qualify for the Austin Energy solar rebate is completing a brief online education course, known as Austin Solar Energy 101, and passing a 10-question quiz.

The education is short slideshow that covers the basics of home solar including:

  • Industry terms
  • Sizing your system
  • Value of Solar billing (this is important to understand!)
  • Financing
  • Tips for claiming your rebate

Requiring an education course in order to claim solar incentives is pretty rare, but it’s actually a great idea. Installing solar panels isn’t something most people do every day, and it’s important to have a good understanding of this investment.

Plus, there’s a 10-question quiz on the rebate program application, which is quite easy if you take a few minutes to read through the education course. Once you complete the quiz, you’ll receive a Solar Education Confirmation Number. Keep this number handy!

Selecting an Austin Energy Participating Contractor

The next crucial step toward claiming the $2,500 rebate is selecting an eligible solar installer. Austin Energy provides a list of around 65 contractors that adhere to their code of conduct and have been trained on their incentive program.

Austin Energy recommends gathering and comparing quotes from at least three installers — and so do we. Comparing multiple quotes gives you a better sense of the pricing, equipment, and warranties available in the marketplace, and weeds out scammers. An eligible installer will help you determine if your roof meets the size and shading requirements for the rebate, and help you size the solar system for maximum savings.

Austin Energy provides phone numbers for the eligible solar rebate program installers, but you can also easily compare quotes from eligible installers online right on solar.com.

Applying for the solar rebate

Once you’ve selected an eligible installer, provide them with your Solar Education Confirmation Number. Your installer will apply for the solar rebate on your behalf along with a Customer Agreement Form (CAF) signed by you.

If the application is approved, you will receive a confirmation letter and you can proceed with the installation knowing you qualify for the rebate.

Once the installation is complete, Austin Energy will inspect the system, install a new meter, and your solar company will turn the system on. After all of that is complete, you will receive your $2,500 rebate!

 

 

What are the other incentives for solar panels in Austin, Texas?

Perhaps the best part about the Austin Energy solar rebate is that it’s the second-best solar incentive available in Austin. The best incentive, in terms of dollar value, is the federal solar tax credit worth 30% of what you pay for a solar system. Better yet, these two incentives can be combined to substantially reduce the cost of a solar system and, by extension, your energy costs.

Here’s an example of how combining the Austin Energy solar rebate and the solar tax credit would work for a 5 kW system with a gross price of $25,000.

Cost Price per watt
Gross cost $25,000 $5 per watt
Austin Energy solar rebate -$2,500
Price paid $22,500 $4.5 per watt
Solar tax credit -$6,750
Net cost $15,750 $3.15 per watt

It’s worth mentioning that the 30% solar tax credit applies to the cost of the system after the rebate is applied, since that is technically what you would pay for the system even if the rebate arrives after installation.

Texas solar property tax exemption

In addition to the incentives mentioned above, Texas has a property tax exemption that applies to 100% of the home value increase as a result of installing solar and other clean energy equipment.

So, installing a solar system will likely increase your property value, but you don’t have to pay property tax on that added value. This is an often overlooked and underappreciated solar incentive that really pays off when it’s time to sell your home.

In order to claim the property tax exemption, you must fill out Form 50-123 and file it with your country appraisal office.

Additional Austin Energy rebates

In addition to the Residential Solar Rebate program, Austin Energy also offers incentives for energy efficient appliances, home improvements, and — as of January 1, 2023 — electric bikes, scooters, mopeds, and motorcycles.

The bottom line

The Austin Energy solar rebate is among the highest value incentives offered by a utility provider. When combined with the 30% solar tax credit, it can substantially reduce the cost of a home solar system and lead to major energy cost savings.

There are a few hoops to jump through in order to qualify, but they are well worth every penny of the $2,500 incentive. In order to claim this incentive, it’s necessary — and helpful — to work with an Austin Energy Participating Contractor.

Compare multiple quotes from eligible solar installers today.

 

Apr 26 2023
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roll solar panels into mortgage

How To Wrap The Cost of Solar Panels Into Your Mortgage

By Solar Loans: Financing Rates, Loan Terms, and More, Solar Financing No Comments

Most first-time homebuyers would love to find a home with solar panels already installed. They would switch them on to save themselves energy costs while doing the Earth a solid.

But the reality is, it’s hard to find a home with solar. In fact, only 3.7% of homes in the U.S. were solar-equipped as of 2020.

But what if you could finance the solar panels along with your home purchase – even your first home purchase? Certain mortgage programs let you do just that.

Compare multiple solar quotes from vetted local installers.

FHA Solar and Wind Technologies Mortgage

An FHA loan is a favorite among first-time buyers because it lets them put just 3.5% down and is lenient on credit scores and income levels.

But another benefit is that you can wrap the cost of an owned (not leased) solar panel system into your mortgage for whatever home you choose. No more wishing that you could find a home with solar panels in your price range. Find the home you want, then add a system.

Under FHA’s Solar and Wind Technologies option, you can finance a system costing up to 20% of the property’s value. You would pay just 3.5% down on the entire loan.

Here’s an example:

   
Home price $350,000
Solar panel system $25,000
Total FHA loan $375,000
Down payment $13,125

The home and the solar panels would be covered with one mortgage loan. You would have just one mortgage payment each month based on market rates when you purchase the home.

A bonus is that FHA allows you to qualify for a bigger home via its EEH Policy when you upgrade a home with energy-efficient upgrades. While you’re at it, you can finance other upgrades like kitchen and bath remodels via the FHA 203k loan.

To see if you qualify, get a pre-approval from an FHA lender specializing in energy-efficient loan options, then start shopping for homes in your price range.

Fannie Mae HomeStyle Energy Mortgage

Like FHA, Fannie Mae allows you to finance energy-efficient improvements at the time of home purchase.

Fannie Mae isn’t a lender; it’s a government agency that standardizes mortgage rules nationwide. Lenders that approve loans by Fannie Mae standards may offer the agency’s green mortgage.

With the HomeStyle Energy Mortgage, you can finance up to an additional 15% of the home’s purchase price for energy-efficient upgrades like solar.

For example, you could finance a system costing up to $30,000 on a $200,000 home.

In this case, you would end up with a $230,000 mortgage that covered your home purchase plus the solar panels that power it. But if the solar installation is less, you only have to add that much to your loan amount.

What’s even better is that Fannie Mae has plenty of homebuying programs requiring only 3% down. In the above scenario, you would pay just $6,900 down for the home and installed solar panel system.

Freddie Mac GreenChoice Mortgage

Freddie Mac, Fannie Mae’s smaller counterpart, also offers a green mortgage.

Its GreenChoice program is similar to others already mentioned: it allows you to buy a home and add up to 15% to the mortgage loan amount to cover energy-efficient upgrades such as solar panels. 

You can combine it with Freddie Mac first-time buyer programs such as HomeOne®, which requires just 3% down.

Is it cost-effective to roll solar panel costs into a mortgage?

On a monthly basis, your solar panel purchase is very likely to “pencil out.” That’s because your solar panels are financed at a low mortgage rate over 30 years.

For example, financing a $20,000 system at 6.5% over 30 years would increase your mortgage payment by about $126 per month. That gives you a predictable monthly electricity cost that happens to be close to the same amount as the average U.S. electric bill of $121 in 2021, according to the U.S. Energy Information Administration.

Of course, some areas like California and New York have much higher energy costs. And unlike utility electricity prices, which rose over 15% in 2022 alone, the solar payments built into your mortgage won’t increase over time.

In short, if you could reduce your bill by $126 in the example above, you get a system that costs you $0 per month. If your energy cost savings are more, you save money monthly. And even if you don’t break even on Day 1, there are many additional benefits to solar panels.

Compare multiple quotes from trusted installers to see how much a solar panel system would cost. Ask a lender how much it would add to your mortgage payment. Then, see if you can save at least that much monthly with solar panels. 

Also important: Make sure the home you’re buying is a good candidate for solar.

Does the home seller have to agree to add solar panels?

You might be wondering, when exactly do you add the solar panels? After all, not many home sellers are going to agree to add solar panels before the sale is a done deal.

The beauty of all three above programs is that the solar panels are installed after you close on the house.

The lender closes the loan and sets aside funds equal to the solar bid amount. You have a few months to get your solar contractor to install the system. The lender pays the solar contractor after the loan closes.

This helps you finance the cost of the solar panel system upfront, then use those funds to get everything installed after you officially own the house. 

Pro tip: It’s worth asking the seller to look at recent copies of their electricity bills to accurately size and price the solar system.

Where to find a lender

Not every lender will offer these “green mortgages” even if they offer standard FHA, Fannie Mae, and Freddie Mac loans.

However, an online search should reveal lenders who specialize in the energy-efficient loan process and can handle your request.

Ask your chosen lender which program is right for your income and credit level. Also ask how many of these loans they have done in the last six to 12 months. That will reveal if they are truly experienced with the programs.

Are solar panels in your future?

If you’ve been frustrated because you can’t find a home with solar panels – and you won’t be able to afford to add them after buying a house – you have a secret weapon as a homebuyer.

Thanks to generous mortgage programs now available, you could buy any home you want, then add solar panels.