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

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

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

Solar incentives are intended to make renewable energy usage more affordable through financial incentives for those who install solar panels on their homes. These incentives can include upfront discounts, cash back or credit towards your monthly utility bill. Some incentives are given by the federal government, some by the state of Tennessee and some by your specific utility company, county or municipality. Types of solar incentives might include:

• Tax Credits: These credits are dollar-for-dollar reductions (not deductions) in how much income tax you owe the federal government.
• Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your McMinnville utility company, it will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some places, this is a dollar-for-dollar credit, while in other places you might make back a percentage of the value.
• Tax Exemptions: Your solar system might qualify for both sales tax and property tax exemptions. 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 calculating property taxes on your home.
• Rebates: A rebate is a partial refund given after you've purchased your solar panels. These could be offered by your local utility company, your state or your county. The cash back that you get from the rebates is normally applied before tax credits are calculated.

Federal Solar Incentives

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

The ITC can be credited towards the value of a solar system installed on your primary or secondary residence in the United States. The solar system has to have been installed on a property you own after January 1, 2006, for you to be eligible for the credit. Originally, the ITC covered 30% of all costs (panels, labor, accessories and equipment), although the covered amount has fluctuated slightly over the years between 26-30%. The installation date of your solar system will determine what percentage you are eligible for. There is no cap on the claim amount.

Reaching out to your local McMinnville solar panel installer is the best way to understand how the ITC could apply to you.

The Inflation Reduction Act, passed in August 2022, added more provisions to the ITC (as well as retitling it the Clean Energy Credit). For solar systems installed between January 1, 2022, and December 31, 2032, homeowners can apply for a credit equal to 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The program expansion also makes credits for energy storage systems even easier to claim, starting in 2023.

More information about the new Inflation Reduction Act can be found here. Your local McMinnville solar panel installers are the best people to answer your questions regarding the new Clean Energy Credit and how it applies to you.

State & Local Solar Incentives

Some solar incentives may be provided by state and local governments. Similar to federal incentives, these might include tax credits, rebates and more. Incentives might be handled by your county or municipality, or by the state of Tennessee. Some incentives may be available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in McMinnville

You can apply for solar incentives from the federal government and the Tennessee government, as well as from your local utility company. The growing availability of solar initiatives in the past 15 years has helped increase nationwide solar energy use enormously. We recommend talking to your local McMinnville solar installation company to learn more about these incentives and to be sure that you're getting all the money you can for your solar system.