Updated On

May 1, 2024

Why You Can Trust Us

Today’s Homeowner exists to help you maintain or improve your home safely and effectively. We uphold strict editorial standards and carefully vet the advice and resources referenced in our articles. Click below to learn more about our review process and how we earn money.

Learn More

    Every state has different rebates and incentives to help promote clean energy technology. The energy programs in Tennessee are not quite as strong as we see in other states, but there are some solar incentives to help homeowners cut down on the total costs of a system installation. In our guide featuring the Tennessee solar incentives, tax credits, and rebates, we provide:

    • Why solar installations make sense
    • Rebates to help you save money on your solar energy system
    • Tax incentives that can help make a solar system possible

    Before investing in solar power systems for your home, take a look at these money-saving tips so that you don’t miss out on an opportunity.

    Highest Quality Panels

    4.4

    Available in all 50 states

    Ability to see what the system will look like

    Several panel options to choose from

    GET QUOTE
    Best Solar Financing
    blue raven logo

    4.3

    No payments needed for 18 months

    Provides in-house financing

    Offers top brands like LG and Trina

    GET QUOTE
    Most Comprehensive Service

    4.1

    Outstanding customer service

    Ethically-sourced products

    Roof leak coverage

    GET QUOTE
    Best Customer Service

    3.9

    Highly rated customer service

    Provides  24/7 panel monitoring

    Solid A+ rating with the BBB

    GET QUOTE

    The Best Solar Incentives, Tax Credits, & Rebates in Tennessee

    It’s important to look at all solar incentives before your installation. Once the solar panels are installed and in place, getting a tax credit, rebate, or incentive is considerably more involved. Homeowners will notice that the best way to get this done is to follow the guidelines for Photovoltaic (PV system) installation and requirements to ensure the best overall results and chance at saving money.

    IncentiveSummaryEnd Date
    Federal Solar Tax Credit (ITC)Tennessee residents can take advantage of the Federal Solar Tax Credit and get a discount of 30% applied to their tax returns. If you purchase $20,000 worth of solar panels, you can get a credit for $6,000 on your next tax return. Remember, this does require you to come out of pocket first. Read MoreDecember 31st, 2032
    Net MeteringNet metering allows homeowners that create excess energy to use it as a credit on their next electric bill. Not all energy providers need to offer this option to homeowners, so finding the right company that allows net metering can be hard.   None
    Tennessee Property Tax IncentiveProperty taxes will remain mostly unaffected by the installation of solar panels; this can apply to a new build or a retrofit. Expect costs to increase by 12.5% of the total solar panel installation cost. Read MoreNone

    Featured Video: What Should You Know About Recent Changes to the Solar Tax Credit?


    Federal Solar Investment Tax Credit (ITC)

    The Federal Solar Investment Tax credit is available in all 50 states. The solar ITC provides money back to homeowners in the form of a tax rebate The recent passage of the Inflation Reduction Act extended this 30% tax credit through the end of 2032. As a homeowner, you would pay for the full installation of your solar panels up-front and then receive a tax credit equal to 30% of your system’s value on that year’s tax return.

    Tennessee Solar Energy Tax Credit

    Unfortunately, Tennessee does not currently have a state solar energy tax credit. Alternative sources of energy like solar and biomass are a bit behind in the state of Tennessee. This could have to do with the overall fair pricing of electricity in Tennessee and the fact that homeowners and business owners are not as concerned about rising costs.

    Tennessee Solar Sales Tax Exemption

    Tennessee’s Sales Tax Credit for Clean Energy Technology is only for commercial customers. Keep checking back to see if things change over time, and the sales tax rate of 7% is yet another savings homeowners can look forward to.

    Tennessee Solar Property Tax Exemption

    When you install solar panels on your home, the value of your home can increase. The Green Energy Property Tax Assessment limits the assessment of the equipment installed on your home to 12.5% of the total system value. This means your property taxes will go up, but they will not be impacted nearly as much as they would have been without the sales property tax exemption.

    Tennessee Net Metering

    If your solar system creates more energy than your home needs, net metering allows you to supply some of that energy back to a utility company. Unfortunately, Tennessee does not currently require energy companies to offer net metering to its customers. The Tennessee Valley Authority (TVA) had offered net metering for some time, but their program is currently on hold.

    Commercial Tennessee Solar Incentives

    Some programs across the United States and in Tennessee will apply to only commercial settings. Sometimes government or large utility companies can do more for commercial investors as they have large up-front costs. Luckily, tax incentives and savings plans will help commercial customers in the state. Remember that these commercial incentives also typically apply to nonprofit organizations, small businesses and schools, and government buildings.

    USDA REAP Grant

    The United States Department of Agriculture offers a REAP grant or Rural Energy for America program that ensures loan financing and grant funding to agricultural producers. In addition, small rural businesses can also access these resources for installing or upgrading renewable energy systems. The USDA REAP Grant program is in place purely to help people save money; the ability to get financing is made considerably easier with the USDA REAP grant.

    Federal Solar Tax Credit for Businesses in Tennessee

    For a federal corporate income tax return, there is a 30% credit against the cost of any system that was placed into the building during that year. This 30% reduction in cost will come back in the form of a tax rebate in the following year. Some companies and organizations with large tax burdens have used this to save them thousands of dollars.

    The Federal Solar Tax Credit is still one of the best ways to save money on solar energy. With the passage of the Inflation Reduction Act, this tax credit has been extended through the end of 2032.

    Sales Tax Credit for Clean Energy Technology

    Commercial institutions in Tennessee are exempt from paying the 7% sales tax rate on their clean energy purchases. Of course, this program is something that you will need to apply for to receive financial help.

    If you have already purchased the system and found out about the sales tax credit, it is reasonable to fill out an application explaining this and see what you can do from a cost-saving standpoint. The sales tax paid can come back to you as a rebate.

    Pathway Energy Efficiency Loan Program

    Large solar installations can be challenging to afford. In addition to solar rebates, it’s also a good idea to look for solar loan programs. These loan programs can help ensure that schools, non-profits, and other businesses can afford to finance their green energy initiatives.

    The Pathway Energy Efficiency Loan Program allows for a maximum loan of $5 million, up to 100% of the costs of the solar system. The term of these loans is typically 5–10 years, and interest rates are between 2% and 5%. The key here is that there is no prepayment penalty, and the entire project can be funded through this one loan program.

    Why Go Solar in Tennessee?

    Tennessee is a bit behind when it comes to solar energy production. Certain cities like Nashville and Knoxville are finding very few people taking advantage of solar initiatives and incentive programs. This has helped to ensure that new incentives are put together on the DSIRE website to help homeowners and taxpayers save money.

    One of the issues seen with Tennessee solar power is the high costs from local installers and lower energy costs from the power company. This leaves homeowners with a long wait to recuperate the money they have invested into their solar system. However, the electric bills can be pretty high in Tennessee, thanks to cool winters and warm summers. Investing in solar is well worth it in the long run if you can get the incentives up-front.

    Highest Quality Panels

    4.4

    Available in all 50 states

    Ability to see what the system will look like

    Several panel options to choose from

    GET QUOTE
    Best Solar Financing
    blue raven logo

    4.3

    No payments needed for 18 months

    Provides in-house financing

    Offers top brands like LG and Trina

    GET QUOTE
    Most Comprehensive Service

    4.1

    Outstanding customer service

    Ethically-sourced products

    Roof leak coverage

    GET QUOTE
    Best Customer Service

    3.9

    Highly rated customer service

    Provides  24/7 panel monitoring

    Solid A+ rating with the BBB

    GET QUOTE

    Tennessee Solar Cost

    The cost of installing solar panels in Tennessee will range from around $15,000 to $30,000, depending on the size of your home. In addition, the Federal government’s financial incentives will help reduce costs. The installation cost for solar panels will change based on who does the installation; looking for incentives from the TVA (Tennessee Valley Authority) for net metering can also bring overall costs down.

    Some homeowners use solar power as one of their energy sources and take advantage of other things like hydropower and geothermal energy. How you power your home or electric vehicles does not have to be 100% solar to see a reduction in costs and an overall increase in green energy.

    How Much Can You Save on Solar in Tennessee?

    Unfortunately, the programs from Tennessee are a bit behind other providers in the country. The Solar Energy Industries Association (SEIA) and Green Power Providers Program are always looking to make sure that, in addition to the Federal Tax Credit, there are other options for homeowners and business owners to save money. The current federal tax credit, saving homeowners 26% on their purchase, could be the best option for Tennessee homeowners looking for a low budget solar system.

    Final Thoughts: Tennessee Solar Incentives

    Tennessee is a state with some work to do when it comes to solar initiatives. The best way for Tennessee homeowners to save money on a solar installation right now is to take advantage of the Federal tax rebate. This rebate is currently quite high at 26%, and while this is the case, it’s worth getting what you can from it. Pay close attention to the initiatives and rebates in Tennessee, as they will likely get better through the years to try and keep up with other states.

    Get a Solar Quote in 30 Seconds
    On average, homeowners save $5,000–$20,000 with solar panels

    FAQs about Tennessee Solar Incentives

    Is solar worth it in Tennessee?

    Because energy costs in Tennessee are relatively fair compared to other states, some homeowners hesitate about the high solar panel installation costs. However, a solar system will save you money in the long run if you can find ways to save money on the up-front costs.


    How much will my electricity bill go down with solar in Tennessee?

    If your solar panels are large enough, you can produce enough electricity for your entire home, bringing your electricity bill down to $0. However, many homeowners start with a few panels and increase through the years as they can afford more.


    How much does it cost for solar panels in Tennessee?

    Solar panels in Tennessee for a single-family home will typically range from around $15,000 to more than $30,000. If you have a large home, the solar panels needed to power it will be considerably more extensive, and the total costs will increase. Installation costs vary between providers, which will have a significant impact on whether or not the system is worth it. Get several quotes for solar panels before deciding on a company.


    How many homes in Tennessee have solar panels?

    Currently, just over 60,000 homes in Tennessee have solar panels. You will notice that states with better incentives for homeowners have more homes with solar panels. Hopefully, the number of homes will increase as the incentives in Tennessee improve.


    Do solar panels increase property taxes in Tennessee?

    Solar panels will increase property taxes and home value in Tennessee. A bill in place ensures these upgrades to your home will cost you a maximum of 12.5% of the total installation costs as an increase to your assessed property value. The impact will be minimal even though the installation costs are high.


    How much can you write off for solar panels on taxes in Tennessee?

    The 30% Federal Tax Rebate program is an option for Tennessee homeowners. There is currently no state program to help save additional money on your solar system.


    Read also: Everything About Federal Solar Tax Credit

    Today's Homeowner’s Solar Ranking and Review Methodology

    At Today's Homeowner, transparency and trust are our most important values for the reader. That’s why we took the time to create an objective rating system and score each solar energy company/service according to our methodology.

    Our research team dug deep into the fine print of contracts, combed through more than one hundred customer reviews, and thoroughly investigated each solar energy company’s services, costs, and products. We’ve done the homework for you by researching nearly all the solar energy companies on the market so you can have the information you need to make the best choice for your home.

    We developed a formula to objectively determine the best solar energy companies and give each a score out of 100 based on the following criteria:

    • Plan Options (30): Do they provide various plan options? We looked at the number of plans each solar energy company offered and the flexibility of adjusting the plan.
    • Services (20): How many services are offered in each plan? We looked at whether the company manufactures its solar panels, whether it contracts out installation, and what additional products each company offers.
    • Trust (10): What do customers say after installing solar panels? Does this company offer a guarantee? We considered how satisfied customers are post-service if the company does what it says it will, BBB accreditation, and service guarantees.
    • Prices (10): How reasonable are the costs of the plan or service in comparison to the industry average? We compared the costs of each company to competitors that offer the same solar energy services.
    • Unique perks (10): Does the company offer discounts or special services such as financial incentives (you might want to explore our guide to obtaining clean energy with rebates), rebates, or a useful mobile app? We looked for extras each company offers that set them apart from the competition.
    • Customer Service (10): How is the customer experience when contacting the company? We considered the speed of response, weekend/holiday availability, and ease of communication through phone calls, email, and online chat functions.
    • Nationwide availability (10): How many states does the company offer its services? Companies that operate nationally and in all zip codes are favored over those with limited availability.

    Editorial Contributors
    avatar for Britt Olizarowicz

    Britt Olizarowicz

    Britt Olizarowicz is a former real estate agent and landscaping business owner. She has a wide range of experience across several industries and was also a professional golfer. With her experience in investing, renovating, and improving properties Britt loves to share in all of the latest and greatest technologies, systems, and strategies to keep your home and garden looking great.

    Learn More

    photo of Roxanne Downer

    Roxanne Downer

    Editor

    Roxanne Downer is a commerce editor at Today’s Homeowner, where she tackles everything from foundation repair to solar panel installation. She brings more than 15 years of writing and editing experience to bear in her meticulous approach to ensuring accurate, up-to-date, and engaging content. She’s previously edited for outlets including MSN, Architectural Digest, and Better Homes & Gardens. An alumna of the University of Pennsylvania, Roxanne is now an Oklahoma homeowner, DIY enthusiast, and the proud parent of a playful pug.

    Learn More

    Top Solar Pros in Tennessee Cities