Tennessee Solar
Incentives & Rebates

Updated March 7, 2021

Tennessee Valley Authority

The TVA, along with affiliated utility companies, grants a power generation incentive for homeowners and commercial businesses that utilize renewable energy systems. Qualifying systems: biomass, small hydropower, solar panel, and wind turbines. The incentive amount is dependent upon the type of system. For solar systems, customers will receive a premium rate of $0.12/kWh. (All other renewable energies are offered $0.03/kWh plus retail rates.)

New members in the program will receive a $1,000 bonus for joining, which can be put toward installation costs of a system. Reimbursement is represented in the form of credit on the participant’s monthly electric bill. For net excess generation produced, energy distribution companies will issue payment based on their company’s pre-established rates.

Systems must be larger than 500 watts but no larger than 999 kilowatts to participate.

Tennessee Rebates

Tennessee offers state rebates for going solar.

Tennessee Sales Tax Exemption

Pay no sales tax on an installed solar energy system in Tennessee! That’s a savings of 6.25% to 8.25%.

Tennessee Performance-Based Incentives (PBI)

Tennessee is one of many states that offer PBIs, which are incentives based on the actual, metered power your system generates. Tennessee calls them Solar Power Performance Payments. Payments are based on kilowatt-hours (kWh) or BTUs generated by your system, as measured by the meter. The electricity produced is credited as Solar Renewable Energy Credits (SRECs), the value of which fluctuates by the rule of supply and demand.

And in Tennessee the Federal Tax Credit Applies, of Course

On top of these nice Tennessee incentives, of course you also qualify for a hefty tax credit from the Federal government. The solar Investment Tax Credit (ITC) is currently worth 26 percent of the system cost, and gets deducted from your Federal income tax. The credit goes to those who buy their system by cash or loan. If you lease a system, all the incentives go to the third-party owner. A very good reason to buy or lease!