Texas Utility Commercial Efficiency Incentives (2026 Guide)

How Texas utility efficiency programs work

The Public Utility Regulatory Act (PURA) § 39.905 and the PUCT's energy efficiency rule, 16 TAC § 25.181, require each investor-owned electric utility to achieve minimum demand reduction goals through standard offer programs, market transformation programs, or self-delivered programs. The rule's goal starts at 30% of a utility's annual growth in residential and commercial demand and, once that reaches four-tenths of 1% of summer weather-adjusted peak demand, becomes 0.4% of peak demand each year. The 2026 plans filed by the utilities describe how each intends to meet that goal.

A few features of the framework matter to commercial customers:

• Two program types. A standard offer program (SOP) pays a published incentive to energy efficiency service providers (contractors, energy service companies, retail electric providers, and in some cases the customer itself) for verified savings. A market transformation program (MTP) is typically run by an implementer that provides technical assistance and incentives to a target market such as schools, cities or small businesses.
• Verification before payment. The rule requires every program to use an industry-accepted evaluation or measurement and verification protocol, and a service provider does not receive final compensation until the work is complete and verification shows the savings will be achieved.
• The Texas Technical Reference Manual (TRM). A statewide TRM, maintained by the PUCT's evaluation contractor, publishes deemed savings and M&V protocols. Version 13.0 applies to program year 2026.
• Industrial opt-out. Industrial customers served at distribution voltage can opt out of paying for the programs. If your account has opted out, expect to be ineligible for incentives and confirm with the utility.
• Who runs the program. In the competitive parts of the ERCOT market, the programs are run by the transmission and distribution utility that owns the wires (CenterPoint, Oncor, AEP Texas, TNMP), not by the retail electric provider that sends your bill.

Most programs pay a rate per kW of summer peak demand reduction and a rate per kWh of annual energy savings. For how to estimate both, see how to calculate HVAC energy savings; for how incentives change the investment math, see payback, ROI and NPV.

Summary table

CenterPoint Energy Houston Electric

CenterPoint's 2026 plan lists sixteen programs. For commercial customers, the main ones are the Commercial Standard Offer Program, which offers incentives for efficient measures in new or retrofit applications, including lighting, HVAC, chillers, motors, refrigeration, renewables "and other custom projects"; the Commercial MTP, with offerings for schools and cities, healthcare facilities and data centers; and the Retro-Commissioning MTP, which provides a no-cost engineering analysis comparable to an ASHRAE Level 2 audit to find low-cost and no-cost measures. Under the retro-commissioning program, owners must implement identified measures with a simple payback under 1.5 years or pay for the analysis.

The plan notes that CenterPoint removed the annual project submission deadline for the Commercial SOP late in 2025. CenterPoint's published 2025 fact sheet listed, for example, $374 per kW plus $0.11 per kWh for chillers, $317 per kW plus $0.11 per kWh for DX cooling units, $220 per kW plus $0.06 per kWh for refrigeration, and $200 per kW plus $0.07 per kWh for "other measures." The same sheet set eligibility for large commercial facilities at a peak demand of at least 100 kW at one site or 250 kW combined across sites, with a minimum project of 15 kW of summer peak reduction and/or 100,000 kWh. We could not confirm 2026 rates on a public page as of October 2026; ask the program for the current rate table and M&V requirements.

Oncor

Oncor's 2026 Commercial Standard Offer Program (CSOP) manual describes two routes. The deemed savings pathway pays service providers for measures with approved deemed savings in the Texas TRM, verified by inspection; the minimum deemed-path project incentive is $500. The M&V pathway may be allowed, at Oncor's sole discretion, for large commercial customer projects with a minimum project incentive of $10,000, and requires Oncor engineering review of the project scope and M&V plan before Oncor decides whether to accept the project. M&V projects add pre- and post-measurement data reviews.

Two eligibility points stand out. The host customer must be an Oncor commercial customer that contributes to the Energy Efficiency Cost Recovery Fund. And the manual lists as ineligible repair, maintenance and behavioral measures, as well as "measures that achieve savings through equipment maintenance, commissioning, operational changes or controls without equipment efficiency upgrade." Retrofit projects need pre- and post-inspections, and existing equipment must stay in place until the pre-inspection is approved. Incentives are paid to the participating service provider, so the customer's share should be agreed with that provider in writing.

AEP Texas

AEP Texas's 2026 plan describes a Commercial Solutions Program that supports commercial customers (non-governmental and non-educational) lacking in-house expertise with technical guidance, energy management assistance and incentives for cost-effective measures that produce verifiable demand and energy savings, with outreach to sectors such as manufacturing and cold storage. Its Commercial Standard Offer Program pays service providers, including contractors, retail electric providers and eligible commercial customers, based on verified demand and energy savings, serves customers of all sizes, and "allows broad measure flexibility consistent with current Texas TRM requirements, without prescribing specific technologies." Schools and local governments are served through SCORE/CitySmart, and smaller sites through Small Business Direct Install. We did not find 2026 incentive rates or a described M&V pathway in public materials as of October 2026; contact the program directly.

TNMP (Texas-New Mexico Power)

TNMP's 2026 Commercial Market Transformation Program, implemented by Frontier, is open to non-residential customers in TNMP's Texas service areas and has a 2026 incentive budget of $1,284,874. Incentives are based on TRM savings methods at $400 per kW or $0.105 per kWh, whichever is greater; custom projects can qualify but may receive a different incentive value. The manual states that all custom measure calculations are reviewed by the statewide evaluator for pre-approval, and that the implementer will develop project-specific M&V plans with pre- and post-installation data collection where custom or M&V approaches fit. Sites with peak demand under 100 kW can use the separate Commercial Direct Install program.

Entergy Texas

Entergy Texas's 2026 plan describes a single Commercial Solutions MTP with several components: a commercial component for small, medium and large for-profit customers; SCORE for schools and higher education; City Smart for government and nonprofit customers; "prescriptive and custom measures"; a midstream lighting and HVAC component through distributors; Strategic Energy Management for large energy users; and a commercial CoolSaver HVAC tune-up component. Savings are determined using the PUCT's EM&V protocols and TRM 13.0. We could not confirm 2026 incentive rates publicly as of October 2026.

El Paso Electric

El Paso Electric's 2026 plan describes two commercial programs for its Texas customers. The Small Commercial Solutions MTP serves customers under 100 kW at one facility (or under 250 kW across facilities) and pays up to $400 per kW reduced. The Large Commercial Plus Solutions MTP serves large commercial and industrial customers, schools, higher education and government with demand of 100 kW or more (or 250 kW aggregate) and pays up to $240 per kW reduced; its implementer "provides measurement and verification for projects, as necessary," and the program page lists custom M&V projects among the eligible project types.

Austin Energy (city-owned)

Austin Energy is owned by the City of Austin and runs its own rebate programs. Its Custom Technologies rebate covers projects not eligible for other Austin Energy rebates: $550 per kW for equipment projects or $310 per kW for process projects, up to $300,000 per customer site per fiscal year (October through September), and generally no more than 50% of job cost. Austin Energy sets the baseline from its initial inspection and states that it will not base rebates on power measurements; savings are estimated from field observations and documented operating conditions. Applications must be approved at least 30 days before work starts, rebates of $50,000 or more require a Texas professional engineer's seal, retroactive rebates are not paid, and equipment that has failed or passed half its life expectancy cannot be used to set a baseline.

CPS Energy (city-owned)

CPS Energy, owned by the City of San Antonio, runs a Commercial Solutions program for commercial and industrial customers. Its program site lists incentive rates by measure type, including $525 per kW plus $0.05 per kWh for chillers, $350 per kW plus $0.05 per kWh for DX and controls, $200 per kW plus $0.03 per kWh for refrigeration, and $200 per kW plus $0.05 per kWh for custom and other measures, with incentives for non-lighting measures capped at up to 75% of project cost. The rate table viewed in October 2026 did not state a program year, so confirm that it is current.

Will a program accept a refrigerant-system treatment?

This must be confirmed with each program before the project starts. Programs are built around measures with deemed savings in the TRM or around custom measures whose savings can be measured and verified. Some programs exclude measures they classify as maintenance; Oncor's 2026 CSOP manual, for example, excludes measures that achieve savings through equipment maintenance without an equipment efficiency upgrade. Others, such as TNMP's custom path and Austin Energy's Custom Technologies rebate, consider measures without deemed values case by case. Ask the program three questions: is this measure type eligible, which pathway applies, and what pre- and post-installation data will be required. A written answer before work begins protects the project's economics. For how custom applications are built, see custom utility rebates and M&V and IPMVP options explained.

CryogenX4, based in Houston, describes its product as a one-time treatment for existing HVAC-R systems and reports energy savings of up to 30%, with results varying by equipment condition. Whether any utility program counts that savings depends on the program's rules and on verified measurements, not on the company's figures.

Checklist before you apply

1. Identify your wires utility from your bill (in ERCOT competitive areas, this is not your retail provider).
2. Confirm the program year is open and budget remains; many programs are first-come, first-served.
3. Confirm your account is eligible (rate class, demand thresholds, opt-out status).
4. Ask whether your measure is eligible and which pathway applies; get the answer in writing.
5. For a custom or M&V path, agree on the M&V plan, baseline period and metering before installation.
6. Do not remove or alter existing equipment until any pre-inspection is complete.
7. Agree in writing with the service provider how the incentive will be shared.
8. Model the incentive as arriving after verification, not at installation.

Next step

Pull your account number and the last twelve months of bills, then call or email the commercial program for your utility with a short project description. If you want help preparing the measurement plan that most custom paths require, contact CryogenX4.