Texas Tax Abatement Aids in Solar Development

As a solar developer with a multitude of projects in Texas, ISS is thrilled to be a part of the massive increase of solar energy in the state. Every year Texas is installing progressively more solar farms in a bid to meet its growing population’s electrical needs. According to the Solar Energy Industries Association (SEIA), “Texas is poised to become a nationwide leader in solar energy, with more than 4 GW of capacity expected to be installed over the next 5 years, with appropriate state policy that removes market barriers and recognizes solar’s benefits.”

As part of a pro-solar state policy that is being executed in Texas, Gov. Greg Abbott signed law H.B.3143 this month. This piece of legislation will continue the Chapter 312 abatement program that was launched in 2001, extending it an additional 10 years. Originally the program was set to expire on September 1, 2019. This program incentivizes solar developers to look to Texas when scouting areas for new solar farms.

So how does the Chapter 312 program help developers? In a state that does not utilize a state income tax, property taxes can prove to be a major expense for developers. In the past, Texas has struggled to bring in large-scale developments due to this added expense. In an attempt to alleviate this expense and make itself more desirable for developers, Texas created Chapter 312 which “…exempts all or part of the increase in the value of the real property and/or tangible personal property from taxation for a period not to exceed 10 years. Chapter 312 of the Texas tax code created the ability for Texas jurisdictions to offer this incentive to developers.” This lowers the tax paid by developers considerably. As a matter of fact, “a 2018 Texas comptroller report found that the Chapter 312 abatement program will take off roughly $255 billion from the property tax rolls from 2016 to 2027.”

States like Texas are increasingly striving to incentivize developers in the renewable energy sector to build in their states. The construction of solar farms not only provides clean energy for entire cities and communities but also employs those in the surrounding area. As the need for renewable energy continues to grow along with the population, so will incentives like Chapter 312.

ISS is proud to be at the forefront of solar development in Texas. For more information about our utility-scale solar farm projects, please call 828-424-7884 or visit innovativesolarsystemsllc.com.