2025 Solar Incentives Guide for Athens, TN - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Athens?

Source: https://www.dsireusa.org/

The phrase "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Different kinds of incentives, including cash back, discounts or monthly utility bill credits, may be available to you. Certain incentives may be provided via the Tennessee government, by your utility company or by county or municipality, while others are federal. Some broad categories of solar incentives include:

• Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government. (A tax credit is different from a tax deduction.)
• Tax Exemptions: Tax exemptions may come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when paying property tax on your house.
• Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar panels. Counties or states will also sometimes offer limited-time rebates. Any rebates you receive will usually come off your total price before any tax credits are calculated.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement in place with your Athens utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you might receive a refund equivalent to a percentage of the value.

Federal Solar Incentives

Federal incentives are the kind of incentives that you are most likely to have heard of. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specific percentage of your solar system's cost.

The ITC can be applied to solar systems installed after January 1, 2006, and lets you deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. The original claim amount was 30% of the total cost, although the amount you can claim may range between 26-30%. There is no maximum amount you can claim.

To best understand how the ITC will apply to your situation, speak to your local Athens solar panel installer and request more information.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as renaming it to the Clean Energy Credit). Homeowners are now eligible for a credit equal to 30% of the total costs of solar system installation for projects started after January 1, 2022, and completed before the end of 2032. The credit percentage will then begin to decrease annually until the Clean Energy Credit expires in 2035. Starting in 2023, the expansion will also make credits for energy storage systems even easier to claim.

More information about the new Inflation Reduction Act can be found here. Your local Athens solar panel installation experts can answer any questions you have and explain how the new Clean Energy Credit applies to you.

State & Local Solar Incentives

Some solar incentives are often also provided by state and local governments. Like with federal incentives, these may include tax credits, rebates and more. These incentives may be provided by the Tennessee government, or by your county or municipality. Certain incentives are ongoing, while others are available for a limited time.

Next Steps for Installing Solar in Athens

The nationwide use of solar energy has gone up tremendously in the last 15 years, in part thanks to the proliferation of solar incentives. You might receive these incentives from the Tennessee government, the federal government or your local utility company. Getting in touch with your local Athens solar panel installer is an excellent first step towards getting the most money possible when you switch to solar energy.