Solar Photovoltaics (PV) Incentives

Install Rooftop or Ground-Mount Solar at Your Business

Save money by installing a solar photovoltaic (PV) system for your business. Austin Energy offers commercial customers a Performance-Based Incentive (PBI) for solar PV systems.

Find a participating contractor to get started.

Austin Energy’s Commercial Solar Performance-Based Incentive (PBI) earns your business an extra credit on your monthly electric bill for the power your solar PV system generates for 10 years. In addition to the PBI, the solar energy that you generate will reduce your bill by decreasing the energy you purchase from the grid.

Solar PV systems are reliable, durable, and require little maintenance. Solar PV uses the sun’s natural, renewable energy to generate electricity, which offsets the need to use power from traditional sources and helps protect the environment. These systems are easy to maintain because they have very few moving parts.

Your business will remain connected to the grid. While you generate a portion of your own electricity when the sun is shining, Austin Energy seamlessly takes over and continues to supply your electricity at night and during the day when your PV system is not producing enough electricity for your building’s needs.

Participating Contractor Required

You must work with a participating contractor to qualify for the PBI. 

We recommend soliciting multiple quotes from our participating contractors. The cost of a solar power installation varies depending on the size and specific details. The participating contractor can estimate the cost and the amount of electricity you can expect from your system.

Once you have selected a contractor, they will submit the incentive application on your behalf.

Restrictions

  • PBI’s are limited to system sizes under 1 MW-ac.
  • Third-party solar Power Purchase Agreements (PPAs) are not allowed in Austin Energy's service territory.

PACE Financing Available

Austin Energy provides various opportunities for our customers to purchase energy-efficient technologies. Many of these reduce energy consumption, enhance comfort and indoor air quality for your customers. PACE is an effective financing approach. Travis and Williamson County PACE programs enable owners of non-profit, commercial, and industrial properties to obtain low-cost, long-term financing for water and energy efficiency improvements and solar generation retrofits.  

Private sector lenders finance qualified improvements and property owners voluntarily agree to contractual assessments imposed on the property. PACE improvements generate positive cash flow with no out-of-pocket cost to the property owner. If the property is sold before the full amount is repaid, the repayment obligation automatically transfers to the next owner. PACE assessments complement Austin Energy incentive programs. 

Leasing Pilot

Austin Energy is now offering Performance Based Incentives (PBIs) for commercial customers who wish to use an operational lease to go solar. Operational leases may offer additional benefits to commercial customers:

  • Reduces up-front capital cost.
  • Lease payments qualify as operating expenses, which reduces taxable profit.
  • The lessor monetizes Federal tax credits and depreciation on behalf of customers. This allows customers to leverage the Federal tax credits without tax liability.

If you are a commercial customer who installs a qualifying solar PV system, our Performance-Based Incentive (PBI) appears as a credit on your monthly bill. These credits are based on your monthly generation in kWh as measured by the solar photovoltaic (PV) meter, regardless of whether the energy you generate directly powers your business or was sent to the grid.

We calculate this credit by multiplying the monthly kilowatts per hour (kWh) your solar PV system produces by your approved PBI rate. We will confirm your rate in a letter of intent (LOI). Your PBI rate is locked in for a 10-year term. We use a three-tiered incentive structure to determine your rate: small commercial (includes most nonprofit installations), medium commercial, and large commercial. 

Your tier is based on project size and the aggregated capacity of previously-installed commercial projects incentivized by Austin Energy (including pending applications or projects committed by LOI). All commercial PBI offerings will be reduced over time to reflect installed cost reductions and the growing solar market, enabling more project participants in the program, and helping Austin Energy meet solar goals at a lower cost. A description of the tiers is provided below. The maximum incentive per customer shall not exceed the amount indicated on the LOI.

If your PBI credits exceed your monthly bill, the excess will be credited to the next month's bill. Any remaining credits at the end of the calendar year will roll over to the next calendar year.  

Third-party solar Power Purchase Agreements (PPAs) are not allowed in Austin Energy's service territory. 

Visualization of Solar Ramp-Down Chart Data (see charts below).

Small Commercial and Non-Profit PBI

Commercial projects up to 75 kW-ac, and owned by customers who have not installed more than 400kW-ac of Austin Energy incentivized projects on their properties (including pending applications or projects committed by LOI), are eligible for the Small Commercial PBI.

Most nonprofits that are not able to take advantage of federal investment tax credits and depreciation are eligible for the Small Commercial PBI for projects up to 400KW-ac. A project’s PBI within this tier is determined based on available capacity with each of the incentive steps.

As the allocated incentive capacity is depleted, projects will be incentivized based on the next incentive step.

View the current solar incentive levels and availability.

Medium Commercial PBI

Commercial projects greater than 75kW-ac and less than or equal to 400kW-ac, and owned by customers who have not installed more than 400kW-ac of Austin Energy incentivized projects on their properties (including pending applications or projects committed by LOI), are eligible for the Medium Commercial PBI. A project’s PBI within this tier is determined based on available capacity with each of the incentive steps.

As the allocated incentive capacity is depleted, projects will be incentivized based on the next incentive step.

View the current solar incentive levels and availability.

Large Commercial PBI

Commercial projects greater than 400 KW-ac and less than 1 MW-ac or projects initiated by customers who have installed more than 400 kW-ac of Austin Energy incentivized projects on their properties are eligible for the Large Commercial PBI. The large Commercial PBI tier is broken into three 4 MW-ac incentive steps.  A customer may not receive more than 800kW-ac of the 4 MW-ac capacity in an incentive step. If a project exceeds 800kW-ac or the remaining capacity in that step, the project would be considered at the next incentive step.  

View the current solar incentive levels and availability

Federal Investment Tax Credit and Modified Accelerated Cost Recovery System (MACRS) Depreciation

Your solar PV system may qualify for a 30% federal tax credit based on the installed cost of your solar PV system, including labor costs. Additionally, you may qualify for accelerated depreciation (MACRS).  ENERGY STAR® has more information about federal solar tax credits and other energy efficiency improvements.

Property Tax Exemption

Your installed solar system may qualify for a property tax exemption. The State Energy Conservation Office has additional information.

Prerequisites

  • You must have an Austin Energy commercial electric utility account at the service address where the solar PV system will be installed.
  • Solar PV systems must be connected to an electric service panel associated with an Austin Energy commercial electric utility account.
  • Third-party solar Power Purchase Agreements (PPAs) are not allowed in Austin Energy’s service territory.
  • You must use a participating contractor. Click Find a Contractor to get started.

See our commercial solar incentive guidelines for more detailed information (pdf).

Requirements

  • Your property deed must allow you to install solar energy systems.
  • Your roof must be in good condition.
  • Your participating contractor must design the system to minimize shading and ensure that the minimum performance of each string in the PV system is at least 1,000 kWh/kW-dc per year.
  • Austin Energy may deny incentives if a solar PV system is poorly placed or shaded.
  • All solar PV systems must be connected to Austin Energy’s electrical grid at your expense.
  • The solar PV system must remain in the Austin Energy service area.
  • The customer must assign all rights to environmental attributes and credits resulting from the solar production to Austin Energy. This includes renewable energy and carbon offset credits.
  • You must apply and receive a Letter of Intent (LOI) prior to system installation in order to be eligible for Austin Energy incentives.  

See our commercial solar incentive guidelines for more detailed information (pdf)

Equipment Requirements

  • The solar modules and inverter must be new and listed as eligible solar energy equipment on the California Energy Commission’s Go Solar website.
  • Licensed electrical contractors must perform all electrical work, including obtaining permits.
  • All work must meet all applicable federal, state, and local codes and regulations.
  • Installation must be done to manufacturer’s standards and City guidelines.
  • All solar PV systems must have a 10-year warranty from the installer.
  • All major solar energy system components eligible for incentives must have a minimum 10-year warranty to protect against all defects and undue degradation of electrical generation output.
  • You cannot increase your solar PV system’s size from the one in the original application without Austin Energy’s approval.

See our commercial solar incentive guidelines for more detailed information (pdf).

  1. Review information about our performance-based incentive (PBI) solar program (pdf).
     
  2. Call Austin Energy’s participating contractors to request bids. Click Find a Contractor to get started. We recommend you get at least three estimates from different companies and check references.
     
  3. The participating contractor you select submits an application to Austin Energy on your behalf.
     
  4. Austin Energy determines eligibility based on your application and aerial photographs of your property. If these photographs are not enough, an Austin Energy representative will perform an on-site visit.
     
  5. City Council approves incentives for projects where annual PBI payments could exceed the City Manager's administrative spending authority under the City Charter, which is $64,000 for fiscal year 2018. Please allow six to eight weeks for this approval.
     
  6. When the application is approved, Austin Energy issues a Letter of Intent (LOI) to you and the participating contractor. The LOI encumbers (reserves) PBI capacity for 120 days for existing structures or 180 days for new construction. Austin Energy makes no financial commitment to applicants before the LOI is issued. If the project is not completed before the LOI expires, the applicant will need to reapply at the prevailing PBI rate.
     
  7. The participating contractor will apply for necessary permits, and then install the solar PV system.
     
  8. The City of Austin will inspect the system to ensure it meets National Electric Code requirements. 
     
  9. Austin Energy conducts a final inspection to ensure proper installation and compliance with the incentive program guidelines. Once the system passes inspection, Austin Energy releases a PV meter, and your contractor can energize your system.
     
  10. Once the system is energized, you will see your PV production on your monthly electric bill, along with your PBI credits.
You must use a participating contractor to qualify for this offering. We recommend that you check references and get a least three estimates from the companies listed below.

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The selection of a participating contractor to perform work is the sole decision of the property owner and/or authorized lessee/occupant. Inclusion in this directory does not represent an endorsement by Austin Energy of any product, individual, or company. No work is guaranteed or warranty expressed or implied, and Austin Energy makes no guarantees as to the quality, cost, or effectiveness of the products provided and work performed by the contractor, employees, or subcontractors.

Funding is limited and available on a first-come, first-served basis. Offerings, program guidelines, and rebate levels are subject to change without prior notice. Rebate funds are encumbered (committed to be paid) during the fiscal year in which they are to be dispersed.

The Austin City Council must approve rebates of more than $64,000 per year. 

Austin Energy makes no financial commitment to applicants until a signed Letter of Intent (LOI) is issued.  

Austin Energy is not a manufacturer, supplier, or guarantor of the solar PV system or installers, and Austin Energy, whether by making available a list of registered installers (participating contractors) and equipment sources or otherwise, has not made and makes no representations or warranties of any nature, directly or indirectly, express or implied, as to performance of the installer or reliability, performance, durability, condition, or quality of the PV system selected and purchased.

Austin Energy’s obligations under this Agreement are payable from current electric operating and maintenance funds appropriated and available for this purpose. Austin Energy’s payment obligations hereunder are special limited obligations of the City of Austin (“City”), payable solely from the revenues of Austin Energy, and not from any tax revenues of the City of Austin. This Agreement does not constitute indebtedness or a loan of the credit of the State, the City, or any subdivision of the State within the meaning of any constitutional or statutory provisions. Neither the faith and credit nor the taxing power of the State, the City, or of any political or subdivision thereof is pledged to the payment obligations of the City and/or Austin Energy hereunder.

Payments made under the PBI program are special limited obligations of the City of Austin, payable solely from Austin Energy revenues, not City of Austin tax revenues.

 

 



Last Updated: 12/5/18

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