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Tennessee has strong potential for solar energy, thanks to its abundant sunshine and a growing interest in renewable energy. However, several factors impact whether going solar in Tennessee is the right choice for residents and businesses. Let’s explore the advantages and challenges of solar energy in the state.
Solar Energy Potential in Tennessee
Tennessee receives ample sunlight throughout the year, making it a promising location for solar energy generation. The state averages around 205 sunny days per year, which is ideal for homeowners and businesses looking to harness the sun’s power. As a result, solar panels in Tennessee can generate a significant amount of electricity, reducing reliance on traditional grid power and lowering energy bills.
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Solar Incentives and Policies
While Tennessee offers solar potential, the state’s incentive structure for solar is less developed than in some other states. There are no state-mandated Renewable Portfolio Standards (RPS) that require utilities to generate a portion of their electricity from renewable sources, which limits the policy-driven demand for solar.
However, some programs do exist to encourage solar adoption:
Like residents in other states, Tennesseans can benefit from the federal tax credit that allows them to deduct 30% of the cost of installing a solar energy system from their federal taxes.
Net Metering (Limited Availability)
Tennessee does not have a traditional net metering policy, but the Tennessee Valley Authority (TVA) offers an alternative through its Dispersed Power Production Program. Here’s how it works:
- The TVA buys excess energy generated by home solar systems at an “avoided cost” rate, which is lower than the retail price consumers pay for grid electricity.
- The program also applies to other renewable energy systems like wind turbines and biomass generators.
Since the TVA’s payment for surplus energy is less than the full retail rate, homeowners can save more on electric bills by using as much of their solar-generated electricity as possible. When you use your own solar power, you avoid paying full retail price for electricity from the grid. However, under TVA’s program, any excess energy sent to the grid only earns partial credit.
Green Power Providers Program
TVA has a program that encourages residents to sell excess solar energy back to the grid. This can be an attractive option for those who generate more power than they use.
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Solar Financing Options
Tennessee has limited state-level solar financing options, but several general financing mechanisms are available, such as:
Solar Loans
Homeowners can take out loans to cover the cost of solar panel installation, spreading the payments over time.
Leasing Options
Some companies in Tennessee offer solar leasing, where residents pay for the energy the panels produce, rather than paying upfront for the installation.
PACE Financing
Property Assessed Clean Energy (PACE) financing is available in some areas, allowing residents to finance solar installations through property taxes.
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Solar Energy Costs in Tennessee
The cost of installing solar panels in Tennessee is relatively competitive compared to national averages. A typical 5 kW system can range from $12,000 to $18,000 before incentives, with costs varying depending on system size, equipment, and labor. Given the federal tax credit, Tennesseans can save significantly on their solar installation costs, making the long-term financial benefits of going solar more appealing.
Benefits of Solar Energy in Tennessee
Lower Energy Bills
Solar panel systems can offset a significant portion of electricity bills, especially for homes with high energy consumption.
Environmental Benefits
By switching to solar power, Tennessee residents can reduce their carbon footprint, contributing to a cleaner environment.
Energy Independence
Solar energy provides energy independence, especially in areas with rising utility rates. With battery storage systems, homeowners can also store excess power for use during peak times or outages.
Challenges for Solar in Tennessee
Lack of State-Level Incentives
Tennessee’s solar policies are not as robust as in some states, which may deter some residents from adopting solar.
No Statewide Net Metering Policy
While some utilities offer solar buyback programs, the absence of a consistent, statewide net metering policy means compensation for excess solar energy varies, and in some cases, the financial return may not be as attractive.
Utility Opposition
In certain regions, there has been resistance from utilities regarding the expansion of solar. This can result in policy uncertainty and may affect future growth.
Is Solar Worth It in Tennessee?
Tennessee holds strong potential for solar energy, particularly with its ample sunshine and growing interest in renewables. While the state lacks robust solar incentives compared to others, federal programs like the Clean Electricity Investment Credit (former ITC) and local utility programs help make solar more financially feasible. For homeowners and businesses looking to reduce their carbon footprint and achieve energy independence, going solar in Tennessee can be a smart long-term investment, especially as the cost of solar continues to fall and the benefits of renewable energy become more apparent.
Ultimately, Tennessee is a good state for solar energy, especially for those willing to navigate the current policy landscape and take advantage of available federal and local programs.
