Tennessee : Renewable Energy Incentives for the USA

Renewable Energy Technology Incentives in Tennessee


Compared to other states in the south east of the country, Tennessee has made good moves towards a more sustainable future. It produces a high proportion of electricity from hydroelectric, a massive 9.6 million MWh annually. The state has also developed its wind capability with the biggest project at Buffalo Mountain, capable of producing 29 MW.

Tennessee is home to some 22 hydroelectric dams including Great Falls, Calderwood and Fort Loudon. The state benefits greatly from the Tennessee river which provides plenty of opportunity for developing large and small scale hydro. There is significant potential for the greater exploitation of wind power, particularly in the Eastern part of the state. The major part of electricity from this technology is currently imported from places like Kansas and Illinois.

Solar has lagged behind as it has for many south eastern states but is expected to increase over the next decade or so with incentives such as the Solar Opportunity Fund. There are currently 151 companies operating in the state, employing over 3,000 workers and the total capacity installed is 129 MW, which puts Tennessee way ahead of many of its close neighbors. The largest single solar farms are at Selmer and Mulberry, producing a combined capacity of 40 MW.

While the state is yet to embrace the possibility of biomass power production, they are developing a strong biofuels industry and have plenty of resources for the production of cellulosic ethanol.

Solar PV Incentives in Tennessee

With net metering and the Tennessee Valley Authority invested in promoting solar PV, there are plenty of incentives and a good return possible for those who decide to have panels installed. First of all, there is the Federal Tax Rebate of 30% to take advantage of but also the Solar Solutions Initiative which provides $0.04 per kWh for the first ten years of any array. There are also various corporate tax exemptions and low cost loans and grants available.

Solar PV Case Study in Tennessee

Tennessee is a cash purchase state and leasing is not currently available. The average cost of a 5 kW installation is $20,000 and if you apply to join the TVA scheme you can get $1,000 off straight away from the Green Power Providers program. There is also the 30% Federal Tax Rebate to take advantage of and the performance based incentive which pays for every kWh produced. This means that you should be looking to pay off any investment within 14 years and will see an average return and net profit in excess of $16,000 over 25 years. Estimates suggest that that sale value of your home will also increase by over $14,000.

Solar Thermal Incentives in Tennessee

Solar thermal presents an economical way of getting hot water for many residential and commercial premises and installers can benefit from the federal tax rebate. For those who don’t want the financial outlay of solar PV, solar water heating can be an excellent option to choose.

Small Hydro Incentives in Tennessee

There is potential for small hydro to develop in Tennessee particularly for remote communities and agricultural interests. The technology is eligible for the Federal Tax Rebate and performance based incentives from the Tennessee Valley Authority under the Green Power Program are also available. Much depends on how micro hydro how installations effect the flow of a particular river but the possibility of using irrigation channels offers good opportunities.

Geothermal Incentives in Tennessee

Geothermal in Tennessee is becoming more popular particularly residential and commercial ground source heat pumps that can provide low cost heating for the right kinds of property. There are a few tax exemptions as well as low cost financing including the Energy Right Heat Pump Program administered by the TVA.

Biomass Incentives in Tennessee

With large amounts of crop land, it’s no surprise that Tennessee is developing a strong biofuels industry but has the state has yet to embrace biomass power production. There are incentives in place for residential and commercial premises who want to swap to wood chip and biomass boilers that have higher efficiency levels, including the Federal Tax Rebate, various TVA awards and tax exemptions such as the Sales Tax Credit for Clean Energy Technology.

Wind Power Incentives in Tennessee

Wind power is on the increase in the state and there are great possibilities for remote and agricultural areas to engage with this technology and provide additional revenue. Wind benefits from the Federal Tax Rebate and the TVA Green Power Providers incentive, as well as various federal grants and low cost loans. While the cost of installing a wind turbine is generally higher than other renewable technologies, the return on investment is still pretty good.

Compared to other states in the south east of the US, Tennessee has engaged more fully with renewable technology, mainly through the influence of the TVA which has done a lot to provide the right incentives for solar and other green alternatives. With so much of their power provided by hydroelectric, the state doesn’t have to worry too much about setting targets but an increase in both wind and solar could add valuable resources to the energy mix.

You can find out more about renewable technology incentives for Tennessee on the DSIRE website

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