Tennessee’s Key Solar Incentives: A Breakdown

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With an average of 207 sunny days each year, Tennessee is an ideal location for solar panel installations. Adopting solar energy can lead to significant long-term savings on your energy bills and a reduction in your carbon footprint. However, the initial investment for solar panel installations can be substantial. Fortunately, Tennessee offers various incentives, including tax credits, to help make solar energy more affordable. This article will provide you with detailed information on the different solar incentives available to Tennessee residents, helping you navigate the financial aspects of going solar.

Residential Clean Energy Credit

The Residential Clean Energy Credit, formerly known as the federal investment tax credit (ITC), offers a 30% reduction in the cost of your solar panel system. This incentive covers the entire system, including equipment, labor, permitting, and sales tax.

To claim this credit on your federal income taxes, you must purchase the system with cash or a solar loan—leasing the system makes you ineligible for the ITC.

Additionally, you must have a sufficiently high tax liability, though any unused credit can be carried over from year to year until the ITC expires at the end of 2034. The only exception is for tax-exempt entities, such as nonprofit organizations, which may be eligible for a direct payment instead of a tax credit.

Tennessee C-PACER Financing

Property-Assessed Clean Energy (PACE) financing enables property owners to borrow money for energy improvements, repaid via a special assessment on the property. Tennessee’s H.B. 667 established the C-PACER program, allowing jurisdictions to finance energy efficiency and resiliency improvements for agricultural, commercial, industrial, and multifamily residential properties. Eligible projects must reduce energy or water consumption, support renewable energy, or increase water resilience. The program excludes residential properties with four or fewer units. The assessment period cannot exceed the weighted average useful life of the project.

Solar for All

• The Community Power Coalition (CPC)’s SFA program, “Powering America Together,” will collaborate with and enhance the impact of the US Department of Energy’s National Community Solar Partnership and Community Power Accelerator program. Led by Inclusive Prosperity Capital, Inc., CPC comprises seasoned community solar experts who have contributed to the Community Power Accelerator as developers, lenders, trainers, and technical assistance providers. The program aims to support the development of low-income community solar projects, reduce carbon emissions, lower energy costs, and promote quality jobs, community wealth-building, energy resilience, and equitable workforce development. 
• Tennessee’s Solar for All (SFA) Program aims to expedite the deployment of solar infrastructure to support low-income households and disadvantaged communities while embracing the state’s diverse urban, suburban, and rural landscapes. Covering the entire state, the program will offer financial assistance for residential rooftop and community solar infrastructure, storage, and related upgrades, aligning with existing complementary initiatives. Additionally, it will provide technical assistance for project deployment, focusing on workforce development opportunities, as well as assistance with siting, permitting, and interconnection as required. Administrative support will ensure projects are executed effectively, efficiently, and promptly.
• The Clean Energy Fund of Texas (TxCEF), in collaboration with the Bullard Center for Environmental and Climate Justice at Texas Southern University (BCECJ), collectively known as CEFBC, is dedicated to deploying technical assistance, private capital, and grants to minority-serving institutions. Together, these organizations aim to facilitate the establishment of residential-serving community solar projects in low-income and disadvantaged communities that face significant challenges related to energy policy and grid vulnerability. These projects are anticipated to result in emissions reductions, savings on household utility bills, generation of shared revenues through community ownership, and the mobilization of private capital.

SELF Solar System Loans 

SELF (Solar Energy Loan Fund) offers unsecured personal loans for home improvement projects, including energy efficiency and renewable energy upgrades. Key features include:

• Loan Amounts: $3,000 to $25,000
• Interest Rates: 5% to 9.99% fixed
• Terms: 3 to 10 years
• Fees: Origination fee of 2.5%, with a 1.25% discount for military, plus a project management fee of 2.75-2.99%
• Eligibility: Open to homeowners in Florida, Alabama, Georgia, South Carolina, and Tennessee

Disclaimer

The information provided herein is for informational purposes only and is accurate as of the time of publication. Please be aware that the solar energy landscape, including technology, regulations, incentives, and market conditions, changes frequently. Therefore, it is essential to consult with qualified experts and professionals before making any decisions regarding solar energy installations or investments. This will ensure that you receive the most current and applicable advice tailored to your specific circumstances.