Sustainability is increasingly good business. Texas businesses that invest in energy efficiency, renewable energy, emissions reduction, and water conservation can access government programs that offset the cost of going green. Whether you are installing solar panels, upgrading to energy-efficient equipment, transitioning to electric vehicles, or reducing industrial emissions, there are programs that may help.
This guide covers the real green business programs available in Texas — from direct grants and tax credits to utility rebates and government-backed financing.
Emissions Reduction Grants
TCEQ Texas Emissions Reduction Plan (TERP)
TCEQ administers some of the largest emissions reduction grant programs in the country. TERP provides grants to Texas businesses that replace or retrofit older diesel-powered equipment with cleaner alternatives. Programs include:
- Diesel Emissions Reduction Incentive (DERI): Grants for replacing on-road and non-road diesel vehicles and equipment. Can cover up to 80% of incremental upgrade costs.
- Texas Natural Gas Vehicle Grant Program: Funding for replacing diesel vehicles with natural gas vehicles.
- Light-Duty Motor Vehicle Purchase or Lease Incentive: Incentives for purchasing or leasing new light-duty electric or alternative fuel vehicles.
EPA Programs
The federal EPA offers Diesel Emissions Reduction Act (DERA) grants and Greenhouse Gas Reduction Fund programs that may be available to Texas businesses directly or through state and nonprofit intermediaries.
Renewable Energy Programs
Federal Investment Tax Credit (ITC)
The ITC provides a significant tax credit for solar energy systems installed on commercial properties. Texas businesses installing rooftop or ground-mounted solar systems can claim the credit, which meaningfully reduces the net cost of solar installation. The credit is available for both purchased and directly owned systems.
USDA REAP
Rural Texas businesses may be eligible for USDA Rural Energy for America Program grants and loan guarantees for renewable energy systems and energy efficiency improvements. REAP grants can cover up to 40% of project costs for qualifying solar, wind, biomass, and geothermal systems. See our rural business grants guide.
Modified Accelerated Cost Recovery (MACRS)
Businesses that install qualifying renewable energy equipment can use accelerated depreciation schedules to recover the cost of the investment faster. Solar energy systems qualify for a 5-year MACRS depreciation schedule, which can be combined with the ITC for maximum tax benefit.
Energy Efficiency Programs
Utility Company Rebates
Texas electric utilities offer commercial rebates for energy- efficient improvements including:
- LED lighting retrofits
- High-efficiency HVAC systems
- Building insulation and envelope improvements
- Energy-efficient motors and variable frequency drives
- Commercial refrigeration upgrades
- Building automation and energy management systems
Check your utility's commercial rebate program — Oncor, CenterPoint, CPS Energy, Austin Energy, and other Texas utilities all maintain active rebate programs.
Federal Energy Efficiency Tax Credits
The federal Energy Efficient Commercial Buildings Deduction (Section 179D) provides deductions for energy-efficient improvements to commercial buildings. Qualifying improvements include HVAC, lighting, and building envelope upgrades that achieve specified energy savings compared to ASHRAE standards.
Electric Vehicle Programs
- Federal EV tax credits: Businesses purchasing qualifying electric vehicles may be eligible for federal clean vehicle credits.
- EV charging infrastructure credits: The Alternative Fuel Vehicle Refueling Property Credit covers a portion of the cost of installing EV charging stations at business locations.
- TCEQ light-duty vehicle incentives: TCEQ programs may provide incentives for businesses purchasing electric or alternative fuel light-duty vehicles.
Water Conservation Programs
Water is a critical resource in Texas, and several programs support business water conservation:
- Water utility rebates: Many Texas water utilities offer rebates for water-efficient commercial fixtures, irrigation systems, and cooling equipment.
- TWDB programs: The Texas Water Development Board funds water conservation programs through local entities.
- Rainwater harvesting incentives: Texas law provides property tax exemptions for commercial properties with rainwater harvesting systems.
How to Approach Green Business Funding
- Start with direct grants: TCEQ TERP and USDA REAP are the most accessible grant programs for green improvements.
- Claim federal tax credits: ITC for solar, 179D for building efficiency, and EV credits can significantly reduce project costs.
- Check utility rebates: These are often the simplest programs to access and can be applied to routine equipment upgrades.
- Layer programs: Many green projects qualify for multiple programs simultaneously — a solar installation can benefit from the ITC, MACRS depreciation, and utility interconnection credits.
Find Programs That May Fit Your Business
Texas businesses making green investments may be eligible for more programs than they realize — especially emissions grants, energy tax credits, utility rebates, and renewable energy financing.
Not sure which programs may fit your business? Our free screening report checks your business against 150+ verified programs — grants, tax credits, loans, and incentives — and shows you which ones may match. Start your free screening →