Tennessee solar rebates and tax credits calculator

Solar incentive

Federal ITC 26% (tax credit)

State tax credit: No

Net metering (by utility)

Calculate for your homes location

There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.

Summary of Tennessee solar incentives 2020

Tennessee is a good place to go solar, though not due to much effort from state legislators. The state gets a strong amount of sun throughout the year, and solar module prices continue to fall. 

Regardless, we still think Tennesseans demand that the state legislature and the TVA board reinstate solar net metering. That policy compels your utility company to rightfully credit you for the solar energy you feed back to them which you can’t use onsite. 

Read on to explore the entire savings, policy, and incentive picture for home solar panel installation in Tennessee.

On this page, you can:

  1. Learn what solar incentives are available to Tennessee homeowners

  2. See what Tennessee solar incentives you qualify for based on your utility company and city

  3. Find out how much these incentives and/or Tennessee solar tax credits will reduce your cost to go solar and add batteries

Federal solar investment tax credit

The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in Tennessee

This perk is commonly known as the ITC, short for “Investment Tax Credit”. If you install your photovoltaic system in 2020, the federal tax credit is 26% of the cost of your solar panel system. This is 26% off the entire cost of the system including equipment, labor and permitting.

Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 26% = $5,200.

The federal tax credit falls to 22% in 2021. Unless new legislation is introduced in Washington D.C., this program will be gone in 2022.

Net energy metering in Tennessee

With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.

Net Metering requires your utility to monitor how much energy your solar power system produces and how much energy you actually consume to make sure you get credit for the surplus.

Tennessee lacks any statewide program for net metering, and there hasn’t been so much of a peep out of the legislature on movement to create one. 

Fortunately, with the entire state in its service area, TVA has announced its new “Dispersed Power Program”. This is basically the same thing as net metering, however the credits you get for sending your electricity back to TVA when you’re not using it are set by TVA annually, and will probably not be near full retail rates. For clearer savings estimates, connect with an installer in Tennessee we trust.

Tennessee solar rebates

While Tennessee does not have a dedicated state rebate for solar panel installation, some manufacturers like LG offer their own solar rebates. These programs are usually time sensitive. For example, LG offers a $600 solar rebate on their equipment, which your installer can help you redeem over the next year.

Sales tax exemption

When you install a solar power system in Tennessee, the cost of that system is exempt from all sales tax. That saves you 6.25-8.25 % off the starting cost! You can choose to apply for the exemption up front (again, our installer partners will take care of all of this for you!) or to take the amount after the system is installed as a sales tax rebate. Hey! Tennessee does have a state tax credit … sorta. It’s not money back per se, but money not spent is still money saved!

Cost of solar panels in your part of Tennessee after all applicable solar incentives

Solar prices near you

Cost range of local prices

$17,226-$21,054

Payback period

10.6-12.9 years

Net profit (savings less system cost)

$27,645-$33,789

Average size system installed in TN in 2020

11.7kW

Solar panel cost calculator

Best 10 solar companies in Tennessee

8 solar companies in Tennessee provide pricing on SolarReviews. Here are the best rated companies near you.

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