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Add State and Local Incentives to the 30% Federal Tax Credit
Learn about solar incentives and solar rebates. Find out what is available to you through federal, state and local programs, as well as local utilities.
State and Local Solar Panel Rebates
Combining the Federal tax credit with state incentives you qualify for may significantly reduce the cost of your solar PV system.

Read more good news about these programs and important tips on qualifying below.
Federal Solar Tax Credit
30% of the cost of your Solar Electric System and installation can be deducted from your federal tax bill.

Read more about this credit and what qualifies.





Solar Incentives by State… Click on your state to see what is available.    
Solar States


— You may be able to afford a larger solar PV system than you originally thought!
— You may be able to add the battery backup system you were planning to buy in a year or two



The Good News About Solar System Incentives, Qualifications and Tips
Some solar incentive programs pay you back over time, based on the energy you generate. Other solar incentives are one-time payments of rebates or credits. Incentive requirements and definitions may vary between states.

Incentive types can be specifically for residential, schools, business, or industrial; or inclusive of all of them. Solar incentives are mainly for grid tied systems and are sometimes available for off grid systems.

The incentives may be only for solar photovoltaic (electric), for electricity generated by wind, or for solar thermal (hot water generation). Other types of incentives may incorporate multiple solar technologies.

Programs with yearly or periodic application dates have credits or rebate rates that may be stepped down over time.

To qualify for incentives, your solar system may have to be installed by a licensed Photovoltaic System Installer, and/or connected to the grid by a licensed Electrician. This may be particularly true for Grid-Tie (Grid-Intertied) systems.
Plan ahead and act quickly. Many incentive programs are time sensitive. First-come-first-served programs, such as lotteries, can be spoken for in minutes after the opening of their application date.

Be careful including incentives in your PV system's budget due to requirements and possible deadlines to meet before qualifying.

Always consult a tax professional in regards to your eligibility for tax incentives.





Solar Incentive Glossary
Battery Backup Systems
Battery backup systems can store electricity from the grid or a fuel-powered generator to provide emergency power when the grid goes down. It can also store energy created PV system to power appliances and lights at night after the sun goes down.

Feed in Tariffs,
a Performance Based Incentive, or PBI

(Available for Grid Tied Systems.)
Feed-in Tariffs are typically long term contracts with your local utility for performance-based compensation.

The contracts are typically a 15-25 year purchase agreement at a guaranteed rate. The rate may decrease over time as specified in the agreement. Feed-in Tariffs may ultimately pay for your PV system or even exceed your initial investment depending on the specifics in the contract.

Originally started in Germany in 1990 and restructured in 2000 to include the right to interconnect to the utility grid. It was designed as an incentive to promote cost-effective renewable energy use and advancements in technologies. Due to its success, the current German policy is the cornerstone for the creation of many feed-in tariff programs around the globe.

Green Building Programs
(May be available for Off-grid and/or Grid-tied Systems.)
Green Building Programs are generally for new construction and remodeling, or just adding a solar electric system. The most common incentives are reductions or waivers of building permit fees. Some state or local organizations offer coupons that reduce construction and/or installation costs to homeowners. The home or business owner usually gives the coupon to their program-authorized installer/contractor. Once the system is installed the installer/contractor can be reimbursed for the amount of the coupon by the program's organization.

Grid-Tied PV Systems
Grid tied systems are inter-connected to send energy back to the grid when your solar electric system creates more than you're using; and you can receive energy from the grid when you're using more electricity than your system is generating at the moment. Learn more about grid-tied solar systems.

Loans
(May be available for Off-grid and/or Grid-tied Systems.)
State or local governments may offer low or zero interest loans for renewable energy projects. Terms are typically 10 years or less. If you are going to purchase or remodel a home that you are going to add a solar system to you may also want to see the Energy Star website for information on Energy Improvement Mortgages (EIMs).

Property-Assessed Clean Energy (PACE) financing may be offered by states that have been authorized to participate in this program. The amount of the loan is determined by a special assessment of your property and is typically repaid over a period of years.

Check with your local banks and credit unions as they may offer renewable energy loans for less than the prime rate. Also consider that mortgage loans and home equity loans can offer several advantages: longer terms, lower interest rates than conventional bank loans, and tax-deductible interest.
Net Metering
(Available for Grid Tied Systems.)
As of January 2012, only four states do not have net metering policies ‐ South Dakota, Mississippi, Alabama and Tennessee. These programs are for utility customers who generate their own electricity and feed excess energy back into the grid. Net-metered customers may use grid energy when their electrical demand exceeds their solar electric system's output. Solar electric credit rates are applied to the customer's total electric use and are shown on the utility bills.

The credit rates and rules vary from state to state. Unused solar electric system credits may expire in a specified time period or they may be carried over from year to year. The credits may only be applied to the utility bill or you may be allowed to get a refund check at the end of a designated period, usually the end of the year.

Off-Grid PV Systems
Off grid systems do not feed energy back to the grid. You may be completely independent from the grid or you may be receiving grid electricity to supplement your system (Grid-Assisted). Learn more about off-grid solar systems.

Solar PV System (Photovoltaics)
A solar PV system uses photovoltaic panels (or modules) to create electricity. This powers appliances, lights, and other electric equipment.

Solar Thermal System
A solar thermal system uses panels (or modules) to heat water. The hot water is typically used instead of a water heater for everyday water use, or in a radiant heating system to warm the air.

State and Local Tax Incentives
(May be available for Off-grid and/or Grid-tied Systems.)
  • Personal tax incentives include income tax credits (dollar-for-dollar reduction on what you owe) and income tax deductions (reduces your taxable income).
  • Property tax exemptions, exclusions and credit incentives generally exclude the added value of the system from your yearly property tax. Abatements may reduce a percentage of your yearly property tax over time.
  • State sales tax incentives can be an exemption from or a credit towards the applicable sales tax.
Utility Rate Discounts & Rebates
(Available for Grid Tied Systems.)
Some utilities and state or local programs may offer temporarily reduced rates on utility bills, or one time rebates on the installation of solar systems and purchases of energy efficient appliances and/or HVAC systems.


Updated: 12/03/2016
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Tennessee Solar Incentives
Updated: 12/03/2016
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INCENTIVE NAME: Solar Easements
CATEGORY: Regulatory Policy
TYPE: Solar/Wind Access Policy
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: TN01R
LAST UPDATE: 08/08/2014

INCENTIVE NAME: TVA - Green Power Providers
CATEGORY: Financial Incentive
TYPE: Performance-Based Incentive
SECTOR: Utility
TECHNOLOGY: Solar Photovoltaics,
CODE: TN02F
DETAILS:
Incentive Amount - $1,000 upon installation
Years 1-10: retail electric rate + premium payment
Years 11-20: retail electric rate

2015 Premium Rates:
Solar: $0.04/kWh
Wind, Biomass, and Hydro: $0.03/kWh
Maximum Incentive - None specified.
Terms - PBI payments continue for 20 years.
Eligible System Size - Minimum size: 0.5 kW
Maximum size: 50 kW
Equipment Requirements - The system must comply with environmental regulations and national standards, be certified by a licensed electrician, and comply with all applicable codes.
Installation Requirements - Solar and wind installations approved by TVA in Calendar Year 2013 must be installed by a renewable energy professional with entry-level NABCEP certification.
Ownership of Renewable Energy Credits - TVA
WEBSITE: http://www.tva.com/greenpowerswitch/providers
UTILITIES: City of Alcoa Utilities, Appalachian Electric Coop, Athens Utility Board, Benton County, Blue Ridge Mountain E M C, Bolivar Energy Authority, Bristol Virginia Utilities, Caney Fork Electric Coop, Inc, Carroll County, Chattanooga City of, Clarksville City of, Cleveland City of, Clinton City of, Columbia Power System, Cookeville City of, City of Covington, Cumberland Elec Member Corp, City of Dayton, City of Dickson, Duck River Elec Member Corp, City of Dyersburg, City of Elizabethton, Erwin Town of, City of Etowah, City of Fayetteville, Fort Loudoun Electric Coop, Gibson Electric Members Corp, Greeneville City of, City of Harriman, Holston Electric Coop, Inc, City of Humboldt, City of Jackson, City of Jellico, Johnson City City of, Knoxville Utilities Board, City of LaFollette, City of Lawrenceburg, Lenoir City of, City of Lexington, Maryville Utilities, McMinnville Electric System, Memphis City of, Meriwether Lewis Electric Coop, Middle Tennessee E M C, City of Milan, City of Morristown, Mountain Electric Coop, Inc, City of Murfreesboro, Nashville Electric Service, City of Newport, City of Oak Ridge, City of Paris, Pickwick Electric Coop, Powell Valley Electric Coop, City of Pulaski, City of Rockwood, Sequachee Valley Electric Coop, Sevier County Electric System, City of Shelbyville, Southwest Tennessee E M C, City of Sparta, City of Sweetwater, Tennessee Valley Electric Coop, Tri-State Electric Member Corp, Tri-County Elec Member Corp, Upper Cumberland E M C, Volunteer Electric Coop, Weakley County Mun Elec Sys, City of Winchester, City of Ripley, Chickasaw Electric Coop, Inc, Forked Deer Electric Coop, Inc,
LAST UPDATE: 06/02/2015

INCENTIVE NAME: TVA - Mid-Sized Renewable Standard Offer Program
CATEGORY: Financial Incentive
TYPE: Performance-Based Incentive
SECTOR: Utility
TECHNOLOGY: Solar Photovoltaics,
CODE: TN67F
DETAILS:
Incentive Amount - Seasonal and time-of-day prices are set at the date of execution of the contract agreement.
Typical pricing for 2015: Varying between $0.029/kWh-$0.051/kWh, with average price around $0.036/kWh
Terms - Up to 20 year contract with a 5% increase in base rates per year
Eligible System Size - 50 kW-20 MW
Installation Requirements - Must be interconnected with a power distributor's or TVA's electric system
Ownership of Renewable Energy Credits - All credits and attributes are transferred to TVA.
WEBSITE: http://www.tva.com/renewablestandardoffer/
LAST UPDATE: 06/18/2015

INCENTIVE NAME: Sales Tax Credit for Clean Energy Technology
CATEGORY: Financial Incentive
TYPE: Sales Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: TN71F
DETAILS:
Incentive Amount - 100% of sales and use tax
Equipment Requirements - Certified green energy production facility as defined in Tenn. Code Ann. Section 67-4-2004
WEBSITE: http://www.tn.gov/revenue/tntaxes/salesanduse.shtml
LAST UPDATE: 07/29/2015

INCENTIVE NAME: Green Energy Property Tax Assessment
CATEGORY: Financial Incentive
TYPE: Property Tax Incentive
SECTOR: State
TECHNOLOGY: Solar Photovoltaics,
CODE: TN72F
DETAILS:
Incentive Amount - Depends upon sector
Equipment Requirements - Must be certified green energy production facility
LAST UPDATE: 07/31/2015

INCENTIVE NAME: TVA - Solar Solutions Initiative
CATEGORY: Financial Incentive
TYPE: Performance-Based Incentive
SECTOR: Utility
TECHNOLOGY: Solar Photovoltaics,
CODE: TN74F
DETAILS:
Incentive Amount - $0.04/ kWh for 10 years in addition to the incentives offered by the Renewable Standard Offer program
Terms - Must be participating in the Renewable Standard Offer Program
Eligible System Size - 50 kW- 1 MW Total capacity of the program capped at 20MW
Installation Requirements - Installation and construction must be done by a NABCEP-certified contractor that works in the TVA region
Ownership of Renewable Energy Credits - Owned by TVA
WEBSITE: http://www.tva.com/renewablestandardoffer/ssi.htm
LAST UPDATE: 06/04/2015