High energy costs are a significant concern for Texas businesses, particularly in manufacturing, food service, agriculture, and other energy-intensive industries. Texas offers several programs that can help businesses reduce energy costs through equipment upgrades, efficiency improvements, and renewable energy installations.
USDA REAP Grants
Rural Texas businesses can apply for REAP grants covering up to 40% of costs for energy efficiency improvements and renewable energy systems. Solar panels, energy-efficient HVAC, LED lighting, insulation, and other improvements qualify. Grant amounts can reach $1 million. REAP guide.
Section 179D Energy Deduction
Building owners who make qualifying energy-efficient improvements to commercial buildings can claim the Section 179D deduction. Qualifying improvements include lighting, HVAC, and building envelope upgrades that meet energy reduction thresholds.
Federal Energy Tax Credits
The Investment Tax Credit covers a percentage of the cost of solar energy systems and other qualifying renewable energy installations. The Production Tax Credit applies to renewable energy generation. Both credits provide dollar-for-dollar reductions in federal tax liability.
TCEQ TERP Grants
Businesses replacing diesel-powered equipment with cleaner alternatives can access TERP grants. While primarily an emissions reduction program, replacing old equipment with modern, fuel-efficient alternatives often reduces energy costs as well. Texas energy incentives guide.
Competitive Electricity Market
Most Texas businesses in deregulated areas can shop for competitive electricity rates. Switching providers or negotiating contracts can reduce energy costs significantly. The Texas Public Utility Commission maintains a comparison tool for residential and small commercial customers.
CPS Energy and Municipal Programs
Businesses in San Antonio (CPS Energy), Austin (Austin Energy), and other municipal utility areas may access utility-sponsored rebates and incentive programs for energy-efficient equipment, demand response participation, and energy audits.
SBA Financing for Upgrades
SBA 7(a) and 504 loans can finance energy-efficient equipment purchases and facility upgrades. Section 179 deductions let you immediately expense qualifying equipment purchases.
Find Programs That May Fit Your Business
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