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

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

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Solar incentives are designed to encourage people to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Solar incentives may include cash back, upfront discounts or monthly credits towards your utility bill. Some incentives are handled by the federal government, some by the state of Tennessee and some by your utility company, county or municipality. Categories of solar incentives include:

• Rebates: Solar rebates may be offered by your local utility company, or by your state or county. These rebates work as cash back that is applied after you pay for a solar system and before tax credits are calculated.
• Tax Exemptions: These could come in the form of property tax exemptions, which can let you exclude the value of your solar system when paying property tax on your home. You could also look for exemptions on sales tax at the time of purchase.
• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. Tax credits are different from tax deductions.
• Net Metering: Net metering is an incentive you can get after your solar panels are up and running. If you've signed a net metering agreement with your Johnson City utility company, the company will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might receive a refund equivalent to a percentage of the value.

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Federal Solar Incentives

Federal solar incentives are probably the first thing that you think of when thinking about solar incentives. One of the incentives many people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive is a tax credit for a certain percentage of your solar system's cost.

The ITC applies to solar panels installed after January 1, 2006, on a primary or secondary residence that you own in the United States. Initially, the credit applied to 30% of the total cost – for panels, labor, accessories and equipment – although it may range from 26-30%, depending on the installation date of your solar system. There is no cap on the claim amount.

Wondering how the ITC applies to your specific situation? Get in touch with your local Johnson City solar panel installer to get more information.

In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. The Clean Energy Credit re-raises the credit up to 30% for solar installations undertaken between January 1, 2022, and December 31, 2032. After this, the credit percentage will decrease slightly each year until the end of the program in 2035. Starting in 2023, it will also be easier to claim credits for energy storage systems with the new act.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, talk to your local Johnson City solar installation company.

State & Local Solar Incentives

In addition to federal solar incentives, there are often also state ones. Tax credits, rebates and more may be available at a more local level. Certain incentives are ongoing, while others might only be available for a limited time. These incentives might be offered by your county or municipality, or by the Tennessee government.

Next Steps for Installing Solar in Johnson City

The large number of available solar incentives has enormously increased the nationwide adoption of solar energy over the past 15 years. You might qualify for solar incentives from the federal government, the Tennessee government or from your local utility company. Talking to your local Johnson City solar panel installer is the right first step towards making sure you get all the incentives you qualify for when you switch to solar energy.