2024 Solar Incentives Guide for Germantown, TN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Germantown.
You'll learn about:
- Local & State Solar Incentives
- Federal Tax Credits (Updated for 2024 and beyond)
- Ways to optimize your solar investment
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What Solar Tax Credits, Incentives, and Rebates are Available in Germantown?
Green Energy Property Tax Assessment
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives help mitigate the cost of installing a solar panel system on your home. Financial incentives like these are designed to encourage more people to make the switch to renewable energy. Incentives can include things like discounts, cash back or monthly utility bill credits. Some incentives are offered by the federal government, while others are handled by the Tennessee government or by your utility company, county or municipality. Some broad categories of solar incentives include:
- Net Metering: Net metering is an incentive you can get once your solar panels are up and running. If you have a net metering agreement with your Germantown utility company, it will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this credit is dollar-for-dollar, while in others you might make back a percentage of the value.
- Rebates: Some solar companies will help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. If you receive a rebate, that amount will usually be deducted from your total price before tax credits are calculated.
- Tax Exemptions: Your solar system may qualify for exemptions on both sales and property tax. Sales tax exemptions come into effect at the time of purchase. Property tax exemptions allow you to ignore the value that solar panels add when you are calculating property taxes on your home.
- Tax Credits: Tax credits are dollar-for-dollar reductions (not deductions) in how much in taxes you owe the government.
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that comes to mind when you think about solar incentives. You may have heard of the Federal Solar Investment Tax Credit, or ITC. This is a tax credit that reduces your taxes by a certain percentage of the money you spend on your solar system.
The ITC is applied to the total cost of solar system installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006, on a primary or secondary residence that you own, as long as it is located in the United States. From its original value of 30% of the total cost, the credit has fluctuated slightly between 26-30%, and you may qualify for varying percentages depending on when your project was completed. There is no maximum claim amount.
To more fully understand how the ITC will apply to you, get in touch with your local Germantown solar panel installation expert and ask for more information.
The ITC was renewed and increased in scope after the passage of the Inflation Reduction Act in August 2022. It's also now called the Clean Energy Credit. The new Clean Energy Credit is valid until 2035. American homeowners can now apply for a 30% credit for solar systems that began installation after January 1, 2022, and are completed by the end of 2032. This credit will then see a slight annual decrease until the date of expiration. The program expansion also makes it easier to get credit for energy storage systems, beginning in 2023.
Click here to learn more about the new Inflation Reduction Act. Your local Germantown 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
There are often state solar incentives available in addition to federal ones. Tax credits, rebates and more can be offered at a more local level. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives could come from the Tennessee government, or from your specific county or municipality.
Next Steps for Installing Solar in Germantown
Solar incentives can be provided by the Tennessee government, the federal government or your local utility company. The large number of available solar incentives has contributed to a large increase in solar energy use in the last 15 years. It is a good idea to talk to your local Germantown solar installation company for more information about these incentives and to ensure that you're getting all the money you can for your solar system.
EcoWatch's Germantown, TN Solar Incentives FAQs
How can I find out if I qualify for different solar incentives?
Generally, solar incentives apply to:
- a new solar panel system
- installed on a property that you own
- within the U.S.
- within the date range specified by a particular incentive.
Specific incentives, including those given out by the Tennessee government or by your county/municipality, may have additional qualifications. Speak with your local Germantown solar installer to learn more about what incentives your project will qualify for.
My home already has solar panels installed. Does my system qualify for any incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the newly increased 30% tax credit under the Inflation Reduction Act. If you had your system installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with the company that installed your solar system, or any local Germantown solar installer, can help you understand what incentives you can apply for.
When does the federal solar tax credit end?
The Clean Energy Credit (previously called the federal solar tax credit, or the ITC), currently ends on January 1, 2035. Currently set at 30%, the credit will drop to 26% in 2033 and to 22% in 2034.
Can I apply for incentives both towards the initial cost of solar panels, and later as reimbursement?
Yes, you can receive both tax credits and rebates towards the cost of solar panels. Depending on which incentives you are receiving, they may apply in a different order. Make sure that you speak with your solar installer or a local tax professional to verify that you are claiming incentives correctly and getting the most money possible.
Our goal is to reach as many people as we can with sensible solutions like solar energy. Our team of full-time local researchers collects solar price and installation data for every city in America then compiles it to create these digestible city guides. If you want to read our solar expert's opinion on the top solar companies featured here, follow this link.
Solar incentive research was conducted by Melissa Smith and Karsten Neumeister. Local data analysis was conducted by James Savino. See something we missed or could do better? Email the editor.