What is left, and what is not
Tennessee solar incentives, and what is left in Memphis, TN
The federal residential credit has ended and Tennessee has no state credit to replace it. This page states what remains, names what we could not verify, and shows how the answer changes fifteen miles away.
The short answer
The federal residential credit is gone. The IRS states that
the credit is not available for any property placed in service after December 31,
2025
(IRS,
checked 2026-08-17), and MLGW states the same thing locally: Residential solar
incentives end for projects completed after 12/31/2025
(MLGW, checked 2026-08-17).
Most pages ranking for Memphis solar cost, including ones dated this year, still describe the price as offset by that credit. Check the date on anything that does.
Three states, one metro, three different answers
The Memphis metro crosses two state lines, and the deal a roof gets changes with the
utility rather than with the roof. Google itself treats this as one question: searches
about solar around Memphis return Is solar worth it in Mississippi?
and
Is solar worth it in Arkansas?
alongside the Tennessee ones.
| Where | Utility | What happens to exported power | Source and date |
|---|---|---|---|
| Memphis and Shelby County, TN | MLGW |
No net metering. Excess flows to the MLGW grid without financial benefit. A separate five-year TVA Dispersed Power Production contract pays avoided cost, which varies monthly. Self-generating homes pay a $14.40 monthly availability charge, subject to change | MLGW, checked 2026-08-17 |
| Arkansas side of the metro | Entergy Arkansas |
Net metering. Residential systems limited to the lesser of 25 kilowattsor the customer's highest residential usage in the previous twelve months. Remaining credits purchased at an estimated annual average avoided cost rate. Interconnections before 30 September 2024 may stay on the legacy schedule | Entergy Arkansas, checked 2026-08-17 |
| Mississippi side of the metro | Entergy Mississippi |
Net metering. Level 1 customers cannot install a system that offsets more than 110% of the customer's prior year annual energy (kWh) usage at that location. The rate paid for exports is not published here. It is set by the Mississippi Public Service Commission, the utility's own page states no figure, and we have not read it from the order | Entergy Mississippi, checked 2026-08-17 |
| All three | Federal |
Residential credit unavailable for property placed in service after December 31, 2025 | IRS, checked 2026-08-17 |
The empty cell in that table is deliberate and it is the most useful thing on the page. A number we have not read from its source does not go on a site whose entire argument is that it publishes the arithmetic honestly. The Mississippi export rate is knowable, from the Public Service Commission, and until somebody here has read it in the original it stays unstated.
What actually ended, and what it was worth
The residential clean energy credit was the largest single number in every solar proposal
written in this country for the past decade. It ended for property placed in service after
31 December 2025
(IRS,
checked 2026-08-17). MLGW carries the same fact in its own words and adds that
new rules are being developed for commercial installations
(MLGW, checked
2026-08-17).
Two consequences follow, and both change how you should read a quote.
The first is that a Memphis homeowner paying cash or financing gets nothing back from the federal government on a system placed in service now. The second is that a great many published pages have not caught up. Pages ranking for Memphis solar cost, including ones carrying this year's date, still frame the price as offset by a credit that no longer applies to a residential project. That is not a small editorial lapse. It is the single largest line in the model.
We publish no percentage for the commercial side either, and that is a decision rather than an omission: the provisions there have been in litigation and no figure was read from a primary source on the day this page shipped. What is verified locally for a business is on commercial solar installation in Memphis.
What Tennessee itself offers
No state residential solar credit was found for Tennessee when this page was written, and none is claimed here. That leaves a Memphis homeowner with the value of the electricity they do not buy, and nothing else, which makes the utility's own rules the whole story. Those rules are set out on MLGW net metering and solar interconnection in Memphis, and the short version is that MLGW does not offer net metering, so output the house does not use at the moment it is made earns nothing.
The one locally administered instrument this site has verified is commercial. C-PACER, run here by EDGE, funds clean energy and resiliency work against a property assessment. Memphis adopted it in September 2022, the first city in Tennessee to do so, and EDGE publishes two thresholds that decide eligibility before anything else: projects must exceed $1 million and at least 25% of spending must go to minority and women owned business enterprises (EDGE, checked 2026-08-17).
What replaces an incentive, when there is not one
With no credit and no export payment, the only lever left in Tennessee is the share of
output a property consumes itself. MLGW publishes the benchmark: the average home uses
about 60% of instantaneous solar output, while the average business uses about 80%
(MLGW, checked 2026-08-17).
Everything that moves the economics here moves that share. An array sized against what the house actually uses during daylight rather than against its annual total. A daytime load, which is why the strongest case in this city is a working building rather than an empty one. Storage, which holds the surplus until the evening instead of donating it, and which the utility's own page names as half the answer to sizing a system here. The full version of that argument is on solar battery installation in Memphis.
And it is worth being blunt about the ceiling. MLGW's published expectation for Shelby County
is that payback likely will take 25 years or longer, even with federal tax incentives
,
on the twin grounds of low electric rates and below average annual solar irradiance
for this area (MLGW, checked 2026-08-17). Nothing on this page repeals that sentence.
How to check any of this yourself
Every figure on this page came off a publisher's own page, checked 2026-08-17, and all of them are open to the public:
- IRS, Residential Clean Energy Credit
- MLGW, Green Power
- Entergy Arkansas, net metering
- Entergy Mississippi, net metering
- EDGE, C-PACER
If one of them has changed since this page was written, the page is wrong and the publisher is right. That is the correct order, and it is why the date sits beside every number rather than at the bottom of the page.
What people ask about solar incentives here
Is the 30% solar tax credit going away in 2026?
It has already gone: the IRS states that the credit is not available for any property placed in service after December 31, 2025
(IRS, checked 2026-08-17), and MLGW says the same locally: Residential solar incentives end for projects completed after 12/31/2025
(MLGW, checked 2026-08-17). Note the IRS page still carries older boilerplate about a phase-down later in the decade. The sentence that governs is the one quoted here, and it is worth reading yourself at irs.gov.
Is solar worth it in Mississippi?
The rules are better than Tennessee's and the detail is incomplete here on purpose. Entergy Mississippi runs a net metering tariff, so exported power is compensated rather than given away, and the utility publishes a sizing limit: Level 1 customers cannot install a system that offsets more than 110% of the customer's prior year annual energy (kWh) usage at that location
(Entergy Mississippi, checked 2026-08-17). The rate paid for exports is set by the Mississippi Public Service Commission and is not published on this page, because we could not read it from the order itself. Ask your utility for the current tariff rather than taking a number off a website.
Is solar worth it in Arkansas?
Arkansas has real net metering, which is the single largest difference from the Tennessee side of the metro. Entergy Arkansas limits a residential system to the lesser of 25 kilowatts or capacity representing the customer's highest residential usage in the previous twelve months
, and purchases remaining credits at its estimated annual average avoided cost rate
in the circumstances its tariff describes (Entergy Arkansas, checked 2026-08-17). Interconnections dated before 30 September 2024 may stay on the legacy schedule; later ones take the non-legacy one.
Does Tennessee have a state solar tax credit?
No state credit was found for residential solar in Tennessee when this page was written, and none is claimed here. The one local instrument this site has verified is commercial rather than residential: C-PACER financing through EDGE, which requires projects to exceed $1 million and to allocate at least 25% of spending to minority and women owned business enterprises (EDGE, checked 2026-08-17). That is covered on commercial solar installation in Memphis.
With no credit and no net metering, why would anyone in Memphis go solar?
For the output you use yourself, and for what it does to a bill you will be paying for the next twenty years either way. MLGW publishes both halves of that: the average home uses about 60% of instantaneous solar output and the average business about 80%, and its own payback expectation for Shelby County is 25 years or longer, even with federal tax incentives
(MLGW, checked 2026-08-17). A project that raises the share consumed on site, through honest sizing, a daytime load or storage, is working on the only lever this market gives you. If a proposal in front of you shows a short payback, ask which tariff it assumes. Start at solar installation in Memphis, TN.
Work out what solar does on your bill, not on a national average
Send the address and a recent MLGW bill. If the answer is that the numbers do not work on your roof, you will get that answer.