2025 Solar Incentives Guide for Knoxville, TN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Knoxville.
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 Knoxville?
Green Energy Property Tax Assessment
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives mitigate the cost of installing a solar panel system on your home. This category of financial incentives is intended to encourage more Americans to convert their home partially or fully to renewable energy. Various types of incentives, such as cash back, discounts or monthly utility bill credits, might be available to you. Some incentives may be provided via the Tennessee government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you have a net metering agreement with your Knoxville utility company, they will subtract the value of the excess energy produced by your solar system from your utility bill each month. In some places, this credit is dollar-for-dollar, while in other areas you might make back a percentage of the value.
- Rebates: Solar companies may help you claim a rebate, or partial refund of your purchase, for your solar system. Counties or states will also sometimes offer limited-time rebates. The value of a rebate will usually come off the total price before tax credits are calculated.
- Tax Credits: Different from tax deductions, tax credits reduce, dollar-for-dollar, the amount of income tax that you owe the federal government.
- Tax Exemptions: These might come in the form of property tax exemptions, which would allow you to ignore the value added by your solar panels when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.
Federal Solar Incentives
Federal solar incentives are likely the first thing that comes to mind when thinking about solar incentives. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a predetermined percentage of your solar system's cost.
The ITC can be applied to solar systems installed after January 1, 2006, and allows you to deduct from your taxes a percentage of the total cost of solar panels, labor, equipment and accessories. This credit can apply towards a solar panel system installed on a primary or secondary residence in the United States that you own. Originally, you could claim 30% of the total cost, although depending on when the project was completed, your credit may range from 26-30%. There is no maximum amount you can claim.
To know exactly how much money the ITC could save you, speak with your local Knoxville solar panel installation expert.
The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Homeowners can now receive a credit of 30% of the total solar system installation costs for projects started after January 1, 2022, and completed before the end of 2032. The percentage will then begin to decrease yearly until the Clean Energy Credit ends in 2035. Starting in 2023, it will also be easier to get credits for energy storage systems under the new laws.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit will apply to you is to speak with your local Knoxville solar panel company directly.
State & Local Solar Incentives
There are more than just federal solar incentives; tax credits, rebates and more might also be offered at the state and local level. These incentives might be offered by your county or municipality, or by the Tennessee government. Some are ongoing, while others are available for a limited time.
Next Steps for Installing Solar in Knoxville
The variety of available solar incentives has enormously increased the adoption of solar energy nationwide over the past 15 years. You might qualify for solar incentives from the Tennessee government, the federal government or your local utility company. Call your local solar panel installation expert today to find out more information and to save as much money as possible on a solar system for your Knoxville home.
EcoWatch's Knoxville, TN Solar Incentives FAQs
How do I learn if I qualify for different solar incentives?
It's best to speak with your local Knoxville solar installer for a better understanding of which incentives your project will qualify for. Typically, solar incentives apply to new solar systems installed on a property you own (in the U.S.) within a specified date range. Some incentives, such as those provided at the level of the Tennessee government, may have additional requirements.
I already have solar panels. Do I qualify for any incentives?
If your solar system was installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If your system was installed between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Speaking with a representative from the company that installed your system, or any local Knoxville solar installer, can help you learn what incentives you qualify for.
What are some environmental benefits of installing solar panels on my house?
You can reduce your carbon footprint by 100 pounds of CO2 a year by switching to solar panels. This adds up to roughly 2,000 pounds in 20 years. In addition, solar power is a renewable energy source, meaning that switching your home over lessens the drain on our planet's resources.
If I switch my appliances out for ones that can utilize solar energy, are there benefits that I can claim?
The recently passed Inflation Reduction Act introduces several incentives that reward homeowners who make eco-friendly upgrades. Some of these incentives include tax credits and rebates for installing new electric appliances. You can find more details about these incentives here.
Can I use multiple types of renewable energy to power my home?
You can power your home with multiple types of renewable energy, or a combination of renewable and non-renewable energy. Be sure to discuss your ideas with your local Knoxville solar installer. They can help you with the plan for your project and educate you on the various incentives that you will or won't qualify for.
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.