Ways to Save Money on Clean Energy
This program allows homeowners to claim up to 30% of their solar system costs as a tax credit. During tax time, this credit helps reduce your owed federal taxes. If owe little to no federal taxes, any remaining credits roll over to the next tax year.
The federal tax credit applies to the total cost of your solar project. As of 2023, this credit also applies to stand-alone solar batteries, allowing homeowners to upgrade their existing system with energy storage.
All Tennessee residents can apply for the federal tax credit, but you must own your solar system to qualify. Legal system ownership depends on your solar financing option. You’ll need to choose a solar loan or up-front payment to own your system; lease and power purchase agreement (PPA) customers don’t qualify.
Currently, Tennessee does not offer net metering and does not have standardized grid interconnection rules. The Tennessee Valley Authority (TVA) does offer dual-metering for people who participate in its Green Power Providers program. TVA services the majority of the state, and you may be eligible for their Dispersed Power Production Program dual-metering plan.
Each year, the U.S. Department of Agriculture provides loan financing and grant funding through REAP to agricultural producers and rural small businesses for renewable energy systems and energy efficiency improvements. Funds may be used for a variety of energy efficiency projects, including the acquisition and installation of renewable energy systems, including biomass, geothermal, hydropower, wind, and solar.
Tennessee has the Green Energy Property Tax Assessment, which limits the taxable amount of value that a solar system can add to your property. For solar, it states that the assessed value of your property may not exceed 12.5% of installed costs for solar.
Tennessee also has a sales tax credit for commercial and industrial customers who are installing solar. This lets you purchase all of the equipment and materials needed to install your solar system without sales tax.