Texas EV Incentives & Rebates Explained

Texas has the third largest number (5.56%) of electric vehicles registered in America. As of December 31, 2021, there were 80,900 EVs in Texas. At that time, there were 8,088,058 registered automobiles in Texas, meaning 1% were EVs.

At A Glance:

1️⃣ The federal government provides a generous electric vehicle rebate and a rebate of 30% on solar system installation costs.

2️⃣ Texas will pay a $2,500 rebate in respect of an EV purchase up until July 1, 2023, or the fund is depleted.

3️⃣ Several utilities provide a rebate when clients install level 2 EV chargers and also incentivize the installation of solar systems.

Overview Of EV Incentives in Texas

There are five categories of incentives offered to EV and solar power buyers in Texas:

  • Federal Government EV Incentive
  • Texas’s EV Incentives
  • Texas utility incentives to install EV charging stations.
  • Federal Government Solar incentive
  • Texas solar incentive

Federal Government EV Incentive

The federal government provides an allowance for a $7,500 tax credit against new EVs and $3,750 for used EV buyers.

The following conditions have to be complied with:

  • The battery capacity must be at least 7 kWh.
  • The vehicle must weigh less than 14,000 pounds.
  • A qualifying company must manufacture the car (see list).
  • The final assembly is done in North America.
  • To qualify for the highest credit level, the vehicle must be new.
  • The car must cost less than $80,000 (this includes vans, SUVs, and pickups) and $55,000 for other vehicles.
  • The joint household income must be less than $300,000 ($150,000 for single filers).
  • The earning limits on used EVs are  $150,000 ($75,000 for single filers).

💡 Read Next:
How The EV Tax Credit Can Benefit You
Understanding The Federal EV Charger Tax Credit

Texas’s EV Incentives

The Texas Emissions Reduction Plan (TERP) offers rebates in addition to the amount available from the IRS. The scheme is open until July 1, 2023.

A $2,500 rebate is available for electric cars (or other alternative fuels) statewide to persons who purchase before the expiry date of the scheme.

The rules to qualify for the TERP rebate are listed below.

  • The vehicle must be new and not subject to a previous sale agreement.
  • The rebate can be applied retroactively for all vehicles leased or purchased after September 1, 2021.
  • The vehicle must be purchased from a licensed dealer within state lines.
  • The scheme does not apply to persons who purchase or lease a vehicle privately.

How To Take Advantage Of Texas’s EV Incentives

The Federal incentives are declared in that year’s IRS tax form and file Form 8936, and the credit will be passed.

The rebate under the Texas Emissions Reduction Plan (TERP) is available on the presentation of the following forms:

  • Reservation forms (at www.terpgrants.org).
  • The buyer’s written order.
  • The retail installment or lease contract.
  • Purchase of lease agreement.
  • Form 130-U (application for Texas title and registration.)

The deadline for this grant is July 1, 2023, or earlier if the grant fund is depleted.

Texas Utility Incentives To Install EV Charging Stations

UtilityDescription of rebate
Denton Municipal Electric (DME)Offers a $300 rebate to customers who purchase an EV and agree to charge the vehicle outside peak hours.
Southwestern Electric Power Company (SWEPCO)SWEPCO will grant a $250 rebate to clients who install a level 2 charger. 
EntergyEntergy customers receive several rebates for purchasing on or offroad EVs and installing level 2 chargers.
Austin EnergyAustin Energy will pay 50% (max $2,500) of installing a level 2 charger. Austin Energy offers commercial customers and multi-unit dwellings (MUD) up to $4,000 for installing level 1 or 2 chargers.
CPS EnergyCPS offers customers a fixed rebate of $96.00 per year for each EV that the customer owns.
United Cooperative Services (UCS)UCS provides a rebate to the value of 50% (max amount up to $500) of the cost of a level 2 charger.
🏷️ Rebate Eligible

Enel X JuiceBox Smart EV Home Charging Station

The JuiceBox is a level 2 charger available with a power output of up to 48 amps, a 25-foot cable, and a NEMA 14-50 plug. The JuiceBox charger is suitable for indoor and outdoor use. In addition, it's a smart charger that allows you to communicate with the charger via an app.

Buy The Hardwired JuiceBox Buy With NEMA 14-50 Plug
We earn a commission if you make a purchase, at no additional cost to you.

Federal Government Solar Incentive

If the client has sized a solar system correctly, it will have sufficient capacity to charge a level 2 EV charger. This is why solar installation rebate information is included in the article.

The federal government offers a 30% tax rebate on the cost of solar installations.

Texas Solar Incentive

The following incentives are available for Texas residents who install solar electric power systems in their homes:

  • Texas Solar Property Tax Exemption – the increase in value of a property caused by a solar installation will not be charged property taxes.
  • Net Metering Schemes – Under the Texas net metering scheme, the utilities will buy back all excess electricity generated by the solar system.
  • Property Assessed Clean Energy (PACE) – Allows residents to finance a solar system and repay the loan through a voluntary property tax assessment.

The Texas utilities offer the following solar rebates.

TXU Energy HomeCustomers can achieve a 100% credit for the buyback of electricity
American Electric PowerCustomers may receive up to $8,500 in rebates for installing solar systems in their homes.
CPS EnergyCustomers may receive up to $8,500 in rebates for installing solar systems in their homes.
Austin EnergyCustomers may receive up to $8,500 in rebates for installing solar systems in their homes.
OncorCustomers may receive up to $8,500 in rebates for installing solar systems in their homes.

The Benefits Of Texas’s EV Incentives

Each state that has offered substantial EV incentives has achieved a significantly larger conversion to EVs than states that have not.

The economic benefit of supporting EV growth has many impacts, ultimately leading to the following:

  • Lower healthcare costs.
  • Increased mortality.
  • Environmental benefits
  • Increase in job opportunities in new related industries.


Is There a Sales Tax On Tesla In Texas? 

Because Tesla does not have retail dealerships, the sales tax management is handled differently than other vehicles.

The amount paid to Tesla, either by the bank or a cash amount from the buyer, does not include sales tax.

The 6.25% sales tax (minus any trade-in allowance) is paid when the vehicle is registered. You need to be aware of this when financing the car to ensure that the finance company will pay the net amount to Tesla and make the sales tax component available to you directly.

Does Tesla Qualify For Texas EV Rebate? 

Because Tesla does not conform to the standard industry practice of employing retail dealerships, it does not qualify for a rebate in Texas.

This is even though Tesla has moved its head office to Texas.

Key Takeaways

Texas is one of the leading states in incentivizing EV adoption and switching to solar energy.

1️⃣ The federal government provides a generous electric vehicle rebate and a rebate of 30% on solar system installation costs.

2️⃣ Until July 1, 2023, or the funds are depleted, Texas will pay a flat $2,500 rebate to purchase an EV.

3️⃣ The state will exclude the value of a solar installation when calculating property tax.

4️⃣ Several utilities offer a rebate of up to $8,500 (size of installation depending) for solar system customers.

5️⃣ Each utility offers a variety of rebates to install level 2 chargers.

With such a good market for consumers in Texas available on home charging rebates, it’s highly advisable to get in on the action.

The articles below are filled with buying advice that will help make the decision much easier:

🎓 Recommended Buyers Guides:
The Best Level 2 Home Chargers
The Best Home Chargers for Tesla