2024 Solar Incentives Guide for Chattanooga, TN - Tax Credits & Rebates

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

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

Solar incentives are designed to make renewable energy usage more affordable via financial incentives for individuals who install solar panels on their homes. Incentives could include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered by the federal government, while others are handled by the state of Tennessee or by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Exemptions: Tax exemptions may come in two forms. First, there is sales tax exemption, applied when you purchase solar panels. The second is property tax exemption. This allows you to ignore the value added by your solar system when calculating property tax for your house.
• Rebates: Your solar installer might help you claim a rebate, or partial refund of your purchase, for your solar panels. Counties or states will also offer limited-time rebates at various times. Any rebates you receive will usually come off your total price before tax credits are calculated.
• 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.)
• Net Metering: Be sure to speak with your Chattanooga utility company about signing a net metering contract. This allows you to receive credit towards your monthly utility bill for the value of excess energy your solar panels generate. You might receive either a dollar-for-dollar credit or a percentage of the value.

Federal Solar Incentives

Federal solar incentives are likely to be the first thing that comes to mind when thinking about solar incentives. An incentive many people are likely familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a specified percentage of the cost of your solar system.

The ITC initially applied to 30% of the cost of installing a solar system, although that number has fluctuated slightly over the last few years between 26-30%. The installation date of your solar system will determine what percentage you qualify for. The total installation cost includes the panels themselves as well as the cost of accessories, equipment and labor. There is no maximum claim amount. The ITC applies to solar systems installed after January 1, 2006, on your primary or secondary residence. The residence must be owned by you and in the United States.

To know exactly how much the ITC could save you, contact your local Chattanooga solar panel installer.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Now, solar installation projects that are completed between 2022 and 2032, can qualify for a 30% tax credit. This percentage will then decrease slightly each year until the current Clean Energy Credit expires in 2035. Starting in 2023, it will also be easier to qualify for credits for energy storage systems under the new laws.

More information about the new Inflation Reduction Act can be found here. Your local Chattanooga solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it may apply to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Like with federal incentives, these could include rebates, tax credits and more. These solar incentives — which might be given by your county or municipality, or by the state of Tennessee — may be offered for only a limited time, or on an ongoing basis.

Next Steps for Installing Solar in Chattanooga

Solar incentives can come from your local utility company, the Tennessee government or the federal government. The large number of available incentives has facilitated the nationwide growth of solar energy use in the last 15 years. When you're prepared to make the change to solar energy, reaching out to your local Chattanooga solar panel installation expert is an excellent place to start.