Solar and Wind Energy Business Franchise Tax Exemption

July 16, 2021


Companies in Texas engaged solely in the business of manufacturing, selling, or installing solar or wind energy devices are exempt from the franchise tax. The franchise tax is Texas’s equivalent to a corporate tax. There is no ceiling on this exemption, so it can be a substantial incentive for solar and wind businesses.

For the purposes of this exemption, 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 listed as an eligible technology.

Texas also offers a franchise tax deduction for solar energy devices which also includes wind energy as an eligible technology.

Program Overview

Implementing Sector: State
Category: Financial Incentive
State: Texas
Incentive Type: Industry Recruitment/Support
Web Site:
Administrator: Comptroller of Public Accounts
Start Date: 1982
Eligible Renewable/Other Technologies:
  • Solar Water Heat
  • Solar Space Heat
  • Solar Thermal Electric
  • Solar Thermal Process Heat
  • Solar Photovoltaics
  • Wind (All)
Incentive Amount: All
Maximum Incentive: All
Terms: N/A


This program has 1 incentives
Technologies: Solar Photovoltaics, Wind (All)
Sectors: Commercial, Industrial
Parameters: The incentive is 100.00 %


Name: Texas Tax Code § 171.056
Date Enacted: 1981
Effective Date: 1982


Name: Comptroller of Public Accounts
Organization: Comptroller of Public Accounts
Address: Post Office Box 13528, Capitol Station
Austin TX 78711-3528
Phone: (800) 252-1381

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.