Does Texas Have Community Solar Laws?

When it comes to explicit, statewide legislation authorizing or mandating community solar, Texas does not currently have a comprehensive enabling law. The federal Environmental Protection Agency (EPA) notes that while 24 states have passed shared renewables or community solar–specific legislation, Texas is among those that “do not have specific legislation allowing community solar.”

However, Texas’s regulatory environment is relatively permissive, which has allowed utilities, cooperatives, municipally owned utilities, and retail providers to voluntarily develop community solar projects.

Below are relevant policy developments and utility-level or regional guidelines that support, or at least do not block, community solar in Texas:

• Texas Community Solar Guidelines: Developed by the North Central Texas Council of Governments (NCTCOG) and other stakeholders, these guidelines provide a “playbook” for how nonprofit utilities (e.g. electric cooperatives or municipal utilities) can launch a community solar project in Texas. They cover design, subscription models, technical and interconnection issues, and cost allocation
• Voluntary Utility Programs: Several utilities in Texas (such as CPS Energy, CoServ Electric, and Pedernales Electric Cooperative) have developed or are planning “shared-solar/community solar project” programs on a voluntary basis.
• HOA/Property Rights Protections: Although not specific to community solar, Texas has enacted laws to protect rooftop solar installations from being banned by homeowners associations. For example, House Bill 362 limits HOA restrictions on solar energy devices under Texas Property Code § 202.010
• Streamlined Permitting (SB 1202): A more recent law, effective September 2025, allows certified third parties to review permit applications for residential solar, potentially lowering soft costs for rooftop and small community solar projects

Low-Income Provisions

Because Texas lacks a dedicated, statewide community solar mandate, there is no uniform requirement that community solar programs include provisions for low-income households. However, some utility or cooperative-led community solar proposals may include low-to-moderate income carve-outs or discounted subscription rates, but these are voluntary and vary project by project (rather than required by state law).

In programs elsewhere in the U.S., it is common to reserve a portion of subscriptions for low-income households or offer lower subscription rates; Texas projects or guidelines may adopt such models, but they are not mandated at the state level.

Because these provisions depend heavily on the utility or developer’s design, any interested low-income household should review the specific terms of a community solar project to see whether discounted tiers or priority enrollment slots exist.

What is Community Solar?

Community solar (also called shared solar or solar gardens) is a model by which multiple participants, homeowners, renters, and businesses share the output (or financial value) of a single solar installation (a solar farm or centralized array). Rather than installing solar panels on one’s own roof, a subscriber pays to participate in a portion of a larger system and receives energy and financial returns proportional to their share.

A community solar project is a collective system, often located in a favorable site (ample sunlight, good interconnection) and sized to serve many subscribers. The developer or host builds and operates the array; subscribers purchase or lease a portion or pay a subscription. The output is credited to subscribers’ utility bills via billing credits or virtual net metering (or other equivalent mechanisms).

When Is Community Solar a Good Option?

Community solar tends to be most attractive under the following conditions:

• The prospective participant cannot install solar on their property (e.g. living in a shaded lot, roof in poor condition, or structural constraints)
• The person rents a home or lives in a condominium or apartment, thus cannot directly host solar panels
• Upfront capital investment or financing is difficult to obtain
• The local utility or cooperative offers favorable crediting rates or subscription terms
• The participant prefers a low-maintenance approach (the project operator handles maintenance and operation).

Advantages of Community Solar Over Residential Solar

Because of these benefits, community solar often complements, rather than competes with, traditional residential solar. In many markets, one might choose residential solar if site conditions are favorable and capital is available; others may prefer community solar for convenience and broader access.

Why Community Solar?

Choosing a community solar option can yield numerous benefits to different stakeholders, homeowners, renters, businesses, utilities, and the broader community.

Benefits for Homeowners and Renters

• Access without rooftop installation: Renters or homeowners with unsuitable roofs can still participate in solar energy and receive energy credits
• Cost savings: Participants often see reductions in their electricity bills through credits proportional to their subscription share
• Reduced risk and maintenance burden: The project owner or developer handles operations, maintenance, repair, monitoring, and insurance
• Flexibility: Contracts often allow for subscription transfer, changes, or cancellations, making it adaptable for people who move
• Equity in clean energy: Community solar helps democratize access to solar by including those who might otherwise be excluded due to capital or property constraints

Benefits for Businesses and Nonresidential Hosts

These include the following:

• Marketing and reputation: Businesses that host community solar projects or partner in them may enhance their green credentials
• Demand response/load management synergy: Some commercial users may pair offtake agreements with the project
• Shared capital model: Businesses can invest in or sponsor subscriptions without committing to full system ownership

Broader Benefits (Grid/Community/Environment)

• Economies of scale: Centralized solar farms often have a cost advantage per watt over many small installations
• Grid resilience and distribution: Multiple, distributed community solar arrays can reduce transmission losses and improve localized reliability
• Local job creation: Deployment, operation, and maintenance support local economic activity
• Environmental benefits: Reduced greenhouse gas emissions, improved air quality, lower carbon footprint
• Energy justice/inclusion: Incorporating low-income households and renters into renewables helps achieve equitable access to clean energy

Because community solar reduces many barriers to adoption, it can accelerate the growth of solar penetration in a region more inclusively than rooftop-only programs.

Are there Community Solar Projects in Texas?

Yes, while Texas lacks mandatory enabling legislation, a number of community solar projects and utility-driven solar subscription programs are active or under development.

As of the most up-to-date available sources:

• CPS Energy (San Antonio): Operates a Roofless Solar subscription program allowing residents to subscribe to community solar arrays
• CoServ Electric: Runs CoServ Solar Station in parts of the Denton, Collin, Tarrant, and Dallas counties
• Pedernales Electric Cooperative: Constructing 15 separate 1-MW arrays intended for community solar subscriptions in its service territory (Hill Country region)
• El Paso Electric: Announced plans for a community solar program in the El Paso area
• TXU Energy/MP2 Energy: Retail energy providers offering “solar club” or subscription arrangements contiguous with community solar farms in Texas

Because there are more than five such initiatives or proposals, here are the largest or most prominent five:

• CPS Energy’s Roofless Solar (San Antonio)
• CoServ Solar Station (CoServ Electric territory)
• Pedernales Electric Cooperative’s 1-MW arrays project
• El Paso Electric’s community solar program
• TXU Energy Solar Club/MP2 Energy LocalSun subscription options

These projects differ in size, subscription terms, and eligibility. In many cases, any resident within a service territory (i.e. within the utility or cooperative’s service area) can join, provided they meet program eligibility (e.g. minimum subscription size, credit check, contract commitment). For example, in CPS Energy’s area, qualified customers can enroll in a portion of a community solar farm, receive credits, and reduce their utility bills.

If you live in Texas and are interested in joining a community solar farm, you should:

• Check whether your local utility, municipal utility, or cooperative offers a community solar program (many list offerings on their website or via the GoSolarTexas portal)
• Confirm your eligibility (residency, minimum subscription, creditworthiness)
• Select a subscription size or number of panels (or kW share)
• Sign a subscription agreement, which typically specifies billing credits and subscription terms
• Receive monthly credits on your electricity bill tied to your share of energy production

Because these programs remain relatively limited and still evolving, adoption and availability can vary by county or service area.

How Does Community Solar Work in Texas?

The basic mechanics of community solar are similar across jurisdictions, but local interconnection, billing, and incentive rules matter. Here’s how community solar typically works in Texas, with examples and caveats.

Basic Mechanism & Grid Connection

• Project Development and Interconnection
  • A developer or utility builds a solar installation (community solar farm) at a site with good solar exposure, suitable land, and proximity to grid connection infrastructure
  • The system interconnects to the local utility grid, sending power into the same distribution network that serves local customers (net metering or billing credits are established through the existing grid)
  • The host utility or cooperative administers the program, or a third-party developer may arrange agreements with the utility
• Subscription / Ownership Shares
  • Participants subscribe to a portion of the project (e.g. a certain number of panels, or kilowatts). Some models allow participants to purchase shares (capital investment), others operate on subscription (lease or pay-as-you-go)
  • Based on the share they hold, their portion of the solar farm’s electricity production is allocated to them
• Billing Credits & Virtual Net Metering / Credit Allocation
  • The electricity produced by the collective solar system is accounted for in aggregate. Each subscriber’s share is translated into billing credits (in kWh or monetary credits) which offset their regular utility bills
  • In some programs, the credits may appear as “virtual net metering” credits. Because Texas’s market and utility structures vary, exact billing arrangements (credit rate, rollover, subscription cost) differ by program
• Benefit to Participant
  • The credits are subtracted from the customer’s electricity bill, reducing the net cost
  • If the power produced exceeds the subscriber’s usage, depending on policy, excess credits might roll over, or some compensation might apply
• Maintenance & Operations
  • The project operator or utility maintains the system, monitors performance, handles repairs, operations, insurance, and administrative functions such as billing and accounting

In Texas, subscribers to community solar receive electricity bill credits for their share of the solar output.

Utility examples:

• CPS Energy Roofless Solar: Subscribers can get credits from the project that reduce their electric bills in San Antonio
• CoServ Solar Station: CoServ’s offering lets customers subscribe to solar and receive credit from the shared array

Incentives & Eligibility

Community solar projects in Texas can often take advantage of federal incentives, especially the Federal Investment Tax Credit (ITC), which currently allows a 30% tax credit for many solar systems (including larger shared solar systems). That incentive helps lower the effective system cost.

At the state level, because there is no uniform community solar enabling law, incentives are more indirect, via local rebates, utility cost-sharing, or favorable crediting structures. Some programs may also leverage local grants, bond financing, or municipal incentives.

One caveat: if a community solar project sells its Renewable Energy Certificates (RECs) or net metering credits to the utility as part of the agreement, the subscribers might not retain environmental claims associated with the RECs. Whether participants receive RECs can vary by project design.

Because Texas’s energy market is deregulated in many areas, how crediting and billing are handled may differ from region to region, and some utilities may be more flexible than others.

How Much Does Community Solar Cost in Texas?

Estimating community solar cost in Texas involves examining typical subscription rates, minimum subscription thresholds, and how much those subscriptions cover. Because each project sets its own pricing, there is no single statewide figure, but we can sketch reasonable ranges based on similar U.S. programs and public sources.

What Subscription Costs Cover

A subscription cost typically covers:

• The allocated share of capital cost (hardware, installation, and permitting)
• Ongoing operation and maintenance (O&M)
• Insurance, monitoring, and administration costs
• Billing agent/utility crediting
• A developer margin or cost of capital (if third-party owned)

Participants essentially pay a per-kWh rate or fixed $/kW subscription that is often designed to be less than the retail electricity rate so that participants save net.

Estimated Subscription Cost Ranges

In practice, community solar subscription costs in U.S. markets typically range between $0.02 and $0.10 per kilowatt-hour (kWh) above or below standard utility rates (depending on program structure), or subscriptions are offered at a percentage discount to retail energy prices. Some programs use a fixed rate per kilowatt of subscribed capacity (e.g. $20 to $40 per kW per year) plus operation costs.

To convert that into a rough Texas estimate:

• Suppose a household subscribes to 2 kW of capacity (rough average for a modest share)
• If the subscription is priced at $30 per kW per month (just as a hypothetical benchmark), that is $60/month (for 2 kW)
• In better programs, subscriptions might reflect discounted rates, so monthly costs could range from $20 to $80 depending on size, location, and tariff structure

In practice, most community solar projects aim for a net credit so that participants see bill savings (i.e. the credit value is greater than or equal to their subscription fee). A typical target is 5% to 15% annual bill savings.

Because Texas projects are still relatively new and pilot or voluntary, documented subscription cost ranges specific to Texas are scarce in public sources. But you can expect that subscription costs will be calibrated to deliver positive net benefit for participants, as the developer must price it low enough so that the credit outweighs the subscription cost over time.