2024 Solar Incentives Guide for Nashville, TN - Tax Credits & Rebates
In this guide, we'll cover the latest solar incentives and rebates available in Nashville.
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 Nashville?
Green Energy Property Tax Assessment
Federal Residential Renewable Energy Tax Credit
Source: https://www.dsireusa.org/
Solar incentives are meant to encourage homeowners to switch to renewable energy by offering incentives meant to lower the financial burden of solar panel installation and use. Different types of incentives, such as cash back, discounts or credit towards your monthly utility bill, might be available to you. Certain incentives may be handled by the state of Tennessee, by your utility company or by county or municipality, while others are federal. You might qualify for any of the following types of solar incentives:
- Tax Credits: Different from tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the government.
- Tax Exemptions: Tax exemptions can come in one of two forms. The first is sales tax exemption, applied at the time you purchase your solar panels. The second is property tax exemption, which allows you to exclude the added value of your solar system when paying property tax on your home.
- Rebates: Solar rebates can be offered by your local utility company, or by your state or county. These rebates are essentially partial refunds that are applied after you purchase a solar system and before tax credits are calculated.
- Net Metering: Net metering becomes relevant once your solar system is up and running. If you've signed a net metering agreement with your Nashville utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you might receive a refund equivalent to a percentage of the value.
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Federal Solar Incentives
When someone says "solar incentives," you likely think of federal incentives first. You may have heard of the Federal Solar Investment Tax Credit, or ITC. The ITC is a tax credit that reduces your taxes by a predetermined percentage of the money you spend installing solar panels.
The ITC applies to 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 claim the credit. Originally, the ITC covered 30% of all costs (panels, equipment, accessories and labor), although the total 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.
Contacting your local Nashville solar panel installer is the best way to understand how the ITC could apply to you.
The Inflation Reduction Act, passed in August 2022, made some changes to the ITC (as well as retitling it the Clean Energy Credit). Under the new program, solar installation projects started after January 1, 2022, and completed by the end of 2032, can qualify for a 30% tax credit. This percentage will then see a slight annual decrease until the end of the current Clean Energy Credit in 2035. Starting in 2023, the expansion to the program will also make it easier to get credit for energy storage systems.
Click here to learn more about the new Inflation Reduction Act. Your local Nashville solar panel company is the best resource for answering your questions about the new Clean Energy Credit and how it will apply to you.
State & Local Solar Incentives
Rebates, tax credits and more can be claimed at multiple levels. In addition to federal solar incentives, there are often state and local ones as well. Certain incentives are offered for only a limited time, while others are ongoing. Local solar incentives might come from the Tennessee government, or from your specific county or municipality.
Next Steps for Installing Solar in Nashville
The variety of solar incentives available has enormously increased the nationwide adoption of solar energy over the past 15 years. You may receive solar incentives from your local utility company, the Tennessee government or the federal government. It is a good idea to talk to your local Nashville solar installation expert for more information about these incentives and to make sure that you're getting the most money possible for your solar panels.
EcoWatch's Nashville, TN Solar Incentives FAQs
What are the top solar panel installation companies near me?
To find the best solar panel installation companies near you, take a look at our article on the top solar companies in Nashville.
What are some of the environmental benefits of switching to solar?
Solar energy is a renewable energy source — by changing 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 100 pounds annually, or roughly 2,000 pounds in 20 years.
If I trade in my appliances for ones that can utilize solar energy, are there credits that I can claim?
The new Inflation Reduction Act includes provisions for multiple incentives that reward homeowners for making eco-friendly upgrades. Some of these incentives include rebates and tax credits for installing new electric appliances. You can find more details about these incentives here.
Can I claim incentives for adding solar panels to a vacation home, rental property or commercial property?
Many solar incentives apply to a property located within the United States that you own, and most secondary residences fall into this category. Other solar incentives may be available for commercial properties, depending on the details. We recommend talking to your local solar installer and/or tax professional to fully understand what incentives may apply to your specific situation.
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.