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Bill

HB 2303

Relating to electric market payments for and an exemption from sales and use taxes for customer-sited distributed generation.

89th Legislature (2025) Introduced by Cecil Bell

Texas bill exempts distributed solar/battery systems from sales tax and establishes grid payment mechanisms to incentivize rooftop renewable energy installations.

Referred to State Affairs
#comptrollerofpublicaccounts(v2608) #publicutilitycommission(v0023) #taxation--sales(i0800) #utilities--electric(i0831)
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Bill Summary · HB 2303

Legislative bill overview

HB 2303 would establish electric market payment mechanisms for customer-sited distributed generation (rooftop solar, battery storage, etc.) and exempt such systems from Texas sales and use taxes. The bill aims to create financial incentives for residential and small commercial renewable energy installations by reducing upfront costs and ensuring fair compensation for excess power fed back to the grid.

Why is this important

This bill directly affects the economics of solar adoption in Texas, the nation's leading solar growth state. By eliminating sales tax (roughly 8-10% of system cost) and establishing payment structures, the legislation could significantly accelerate distributed generation deployment, affecting utility revenue models, grid management, and state tax collections while advancing renewable energy goals.

Potential points of contention

  • Utility revenue impact: Electric utilities may oppose mechanisms that compensate distributed generation customers at rates they view as unfavorable to grid maintenance funding and other ratepayers
  • Tax revenue loss: The sales tax exemption reduces state and local tax revenue with unclear offsetting benefits; fiscal impact analysis would be critical
  • Market design complexity: Defining fair "electric market payments" requires technical specification—how rates are calculated, metering standards, and grid interconnection rules remain undefined in the bill title

Compiled from official sources — confirm details with the bill’s official record.

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