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

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

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

Solar incentives are meant to encourage homeowners to make the switch to renewable energy by providing financial incentives meant to lower the burden of solar panel installation and use. You may be eligible for various types of incentives, such as cash back, discounts or monthly utility bill credits, depending on your situation. Some incentives come from your specific utility company, county or municipality, some from the state of Tennessee and others from the federal government. You might qualify for any of the following types of solar incentives:

• Tax Credits: Unlike tax deductions, tax credits are dollar-for-dollar reductions in the amount of income tax that you owe the federal government.
• Tax Exemptions: Sales tax exemptions are applied at the point of sale for your solar system. Property tax exemptions let you ignore the added value of your solar system when you calculate the amount of property tax you need to pay.
• Rebates: Rebates, or cash back after a purchase, are usually applied before any solar tax credits are calculated. Solar rebates can be offered by your local utility company, by your county or by your state.
• Net Metering: Net metering becomes relevant after your solar panels are up and running. If you have a net metering agreement with your Nashville utility company, the company will subtract the value of the excess energy your solar system produces from your monthly utility bill. In some areas, this is a dollar-for-dollar credit, while in other places you may be refunded a percentage of the value.

Federal Solar Incentives

When people think of solar incentives, federal incentives might be the first thing that comes to mind. The solar incentive that you're most likely to have heard of is the Federal Solar Investment Tax Credit (ITC), which gives you a credit on your taxes equal to a predetermined percentage of your solar system's cost.

The ITC applies to solar panels installed on your primary or secondary residence in the United States. The solar panels have to have been installed after January 1, 2006, on a property you own for you to be eligible for the credit. Initially, the ITC applied to 30% of all system installation costs (panels, equipment, accessories and labor), although the total amount has fluctuated slightly over the 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.

Curious how the ITC might apply to your specific situation? Get in touch with your local Nashville solar panel installation expert to get more information.

The Inflation Reduction Act, passed in August 2022, expanded and extended the ITC (as well as renaming it to the Clean Energy Credit). Under the new program, solar installation projects begun after January 1, 2022, and finished by December 31, 2032, can qualify for a 30% tax credit. This credit amount will then see a slight annual decrease until the current Clean Energy Credit expires in 2035. Starting in 2023, the program expansion 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 best way to learn more about how the new Clean Energy Credit applies to you is to speak with your local Nashville solar panel installers directly.

State & Local Solar Incentives

Not all solar incentives are federal; tax credits, rebates and more are often offered at the local or state level. Some incentives are ongoing, while others may only be available for a limited time. Solar incentives might be offered by the Tennessee government, or by your county or municipality.

Next Steps for Installing Solar in Nashville

There are many types of solar incentives: those given by local utility companies, those offered by the Tennessee government and those provided by the federal government, to name a few. The use of solar energy has increased tremendously in the last 15 years, partially thanks to these incentives. Reaching out to your local Nashville solar panel installer is the right first step towards getting all the incentives you qualify for when you switch to solar energy.