2024 Solar Incentives Guide for Memphis, TN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Memphis.
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 Memphis?
Green Energy Property Tax Assessment
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are designed to make renewable energy usage more affordable via financial incentives to help people install solar panels on their homes. Incentives may include things like discounts, cash back or credit towards your monthly utility bill. Some incentives are offered by the federal government, while others are offered by the Tennessee government or your utility company, county or municipality. Some solar incentives you might qualify for are:
- Net Metering: Net metering becomes relevant after your solar system is up and running. If you've signed a net metering agreement with your Memphis utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in others you may make back a percentage of the value.
- Tax Exemptions: Sales tax exemptions are applied at the time of purchase for your solar system. Property tax exemptions let you exclude the value that your solar panels add when you calculate how much property tax you need to pay on your home.
- Rebates: Solar rebates may be offered by your local utility company, or by your county or state. These rebates are essentially cash back that is applied after your purchase of a solar system and before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions that lower the amount of income tax you owe the government. (A tax credit is different from a tax deduction.)
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Federal Solar Incentives
Federal solar incentives are likely to be the first thing that you think of when you think about solar incentives. One of the incentives that most people are probably familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive 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, accessories, equipment and labor. This credit can be claimed on solar panels installed on a primary or secondary residence that you own in the United States. 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 find out exactly how much the ITC could save you, get in touch with your local Memphis solar panel installer.
In August 2022, the ITC (now called the Clean Energy Credit) was bolstered by the passage of the Inflation Reduction Act. Under the new program, solar installation projects that are completed between 2022 and 2032, may be eligible for a 30% tax credit. This credit amount will then decrease slightly each year until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make credits for energy storage systems even easier to claim.
More information about the new Inflation Reduction Act can be found here. The easiest way to fully understand how the new Clean Energy Credit applies to you is to get in touch with your local Memphis solar panel installers.
State & Local Solar Incentives
Tax credits, rebates and more can be claimed at multiple levels. Along with federal solar incentives, there are often state and local ones, too. These incentives might be handled by the Tennessee government, or by your county or municipality. Some incentives may be available for a limited time, while others are ongoing.
Next Steps for Installing Solar in Memphis
You can apply for and receive solar incentives from the Tennessee government and the federal government, as well as from your local utility company. This increase in availability of solar initiatives over the last 15 years has helped increase solar adoption nationwide. It is a good idea to talk to your local Memphis solar installation company for more information about these incentives and to make sure that you're getting the largest number possible for your solar panels.
EcoWatch's Memphis, TN Solar Incentives FAQs
If I already have solar panels, can I still claim incentives?
If your solar panels were installed after January 1, 2022, you may qualify for the recently increased 30% tax credit under the Inflation Reduction Act. If you installed your system between 2006 and 2021, you might qualify for a tax credit between 26% and 30%, depending on the date of installation. Talking to the company that installed your system, or any local Memphis solar installer, can help you understand what incentives you qualify for.
Who installs solar panel systems near me?
To find the best solar panel installer in your area, check out our guide to Memphis' best solar panel companies.
What are some environmental benefits of installing solar panels on my house?
Solar energy is renewable — by switching where you get your energy, you help lessen the strain on our planet's resources. Solar panels can also lower your home's CO2 emissions by 50 pounds a year, or roughly 1,000 pounds over 20 years.
How long until the federal solar tax credit ends?
The federal solar tax credit, previously called the ITC and now called the Clean Energy Credit, is slated to end January 1, 2035. The current 30% credit will end in 2032, replaced by a 26% credit in 2033 and a 22% credit in 2034.
If I change out my appliances for ones that can utilize solar energy, are there benefits I can claim?
The new Inflation Reduction Act provides multiple 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.
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.