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/
The phrase "solar incentives" includes a range of financial incentives implemented to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Incentives can include things like discounts, cash back or credit on your utility bill each month. Some incentives are offered federally, while others are handled by the state of Tennessee or your specific utility company, county or municipality. Categories of solar incentives include:
- Net Metering: Net metering factors in once your solar panels are up and running. If you have a net metering agreement with your Memphis utility company, the company will subtract the value of the excess energy your solar system produces from your utility bill each month. In some locations, this is a dollar-for-dollar credit, while in others you might get refunded a percentage of the value.
- Tax Exemptions: Sales tax exemptions go into effect at the time of purchase for your solar panels. Property tax exemptions allow you to exclude the added value of your solar system when calculating the amount of property tax you need to pay on your house.
- Rebates: Your solar installer might help you claim a rebate, or partial refund after purchase, for your solar system. States or counties will also sometimes offer limited-time rebates. The value of a rebate will usually come off your total price before tax credits are calculated.
- Tax Credits: Tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government. (This is different from a tax deduction.)
Best National Provider
SunPower
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- Expensive
- Customer service varies by local dealer
Best Technology
Tesla Energy
- Price-match guarantee
- Sleek, efficient, and durable solar panels
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- Some reported issues with customer service
- Customer service varies by local dealer
Federal Solar Incentives
When thinking about solar incentives, federal incentives may be the first thing that comes to mind. A federal incentive that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). This incentive 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 panels must have been installed after January 1, 2006, on a property owned by you for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, accessories, labor and equipment), although the amount has fluctuated slightly over the last few years between 26-30%. The amount you qualify for will depend on when your solar system was installed. There is no cap on the claim amount.
Wondering how the ITC applies to your specific situation? Contact your local Memphis solar panel installer to get more information.
In August 2022, the ITC (now called the Clean Energy Credit) was expanded and extended by the passing of the Inflation Reduction Act. For solar system installations that begin after January 1, 2022, and are completed by the end of 2032, homeowners can apply for a credit for 30% of the total cost. After 2033, the percentage will decrease annually until the Clean Energy Credit ends in 2035. The expansion to the program also makes credits for energy storage systems even easier to claim, beginning in 2023.
More information about the new Inflation Reduction Act can be found here. Your local Memphis solar panel company is the best resource for answering your questions regarding the new Clean Energy Credit and how it applies to you.
State & Local Solar Incentives
Some solar incentives may be offered at the local or state level. As with federal incentives, these may include tax credits, rebates and more. Certain incentives are ongoing, while others are offered for only a limited time. Your local incentives might come from your county or municipality, or from the Tennessee government.
Next Steps for Installing Solar in Memphis
Solar incentives can be provided by your local utility company, the Tennessee government or the federal government. The growing number of available solar incentives has helped nationwide use of solar energy increase greatly in the last 15 years. Call your local solar panel installation company today to learn more and to save the most money possible on a solar system for your Memphis home.
EcoWatch's Memphis, TN Solar Incentives FAQs
My home already has solar panels. Do I qualify for any incentives?
If your solar system was 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 may 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 solar system, or any local Memphis solar installer, can help you understand what incentives you might want to apply for.
What are the highest-rated solar panel installation companies near me?
To find the best solar panel installers near you, take a look at our article on Memphis' best solar panel companies.
What are some environmental benefits of adding solar panels to my home?
You can lower your carbon footprint by 50 pounds of CO2 a year by switching to solar panels. This adds up to roughly 1,000 pounds over 20 years. In addition, solar power is a renewable energy source, which means that switching your home over reduces the drain on our planet's resources.
When does the federal solar tax credit end?
The Clean Energy Credit (previously referred to as 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.
I want to trade in my old appliances for ones that are more energy-efficient. Are there any incentives I can get?
Under the new Inflation Reduction Act, there are a variety of new financial incentives to encourage you to make eco-friendly improvements to your home. More details on these incentives, including information about incentives for purchasing new appliances, can be found 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.