Is solar worth it in Tennessee?
For a typical Tennessee home in 2026, solar is not worth it: about a 24-year payback and $1,035 saved over 25 years after paying for the system. Check your own home, because roofs, usage and utilities vary a lot.
- Payback, typical home
- 24 yrs5.2 kW, paying cash
- Electricity price
- 13.6¢per kWh, U.S. 18.0¢
- Solar production
- 1,367kWh per kW per year
- Exports credited at
- ~20%No statewide net metering
The numbers for a typical Tennessee home
| Electricity use | 1,189 kWh a month (Tennessee average) |
|---|---|
| Best-value system | 5.2 kW, producing 7,108 kWh a year (50% of use) |
| Price | $19,620 at about $3.60/W |
| First-year savings | $768 |
| Payback | 24.0 years |
| 25-year net | $1,035 (0.4% a year return) |
| Rate increase assumed | 2.5% a year, from Tennessee's 2015–2025 history |
Paying cash, no federal credit, 5% discount rate, microinverters, $25 per kW a year for maintenance and repairs. Methodology.
Why it comes out this way
- Electricity is cheap: 13.6¢ per kWh, 25% below the U.S. average (18.0¢), so each solar kWh saves less.
- Exported solar is typically credited at about 20% of retail, so systems pay best when sized for what you use yourself.
- A typical system here produces about 1,367 kWh per kW per year (ranked #29 of 51).
- There is no federal tax credit for homeowners who buy in 2026, which adds several years to payback compared with 2025.
Net metering and export rules in Tennessee
No statewide net metering. Tennessee has no net metering law; almost all homes are served by TVA-supplied local power companies. Solar offsets your own usage, but exported power is typically bought at TVA's low wholesale avoided-cost rate (about 2.7 c/kWh in late 2026) or a local utility's own rate.
TVA Dispersed Power Production (DPP) program: excess purchased at TVA avoided cost (Sept 2026 standard 2.677 c/kWh; TOU option 2.29-3.21 c). Some local power companies run their own programs.
- Netting: instantaneous
- Unused credits: None - exports purchased at avoided cost.
- Fixed charges: Many LPCs charge grid access/facility fees or separate meter charges to solar customers; varies widely.
- Last major change: TVA ended Green Power Providers premium purchases in 2019; DPP rates revised at least annually (April 2026: 3.012 c; Sept 2026: 2.677 c).
- Pending: TVA draft program allowing LPC-hosted compensation for on-site solar <250 kW (status uncertain).
Read net metering explained to see why export rules can swing payback by years.
| Utility | Export credit | Notes |
|---|---|---|
| Nashville Electric Service | 2.7¢/kWh | Exports via TVA DPP at avoided cost. |
| Memphis Light, Gas & Water | 2.7¢/kWh | Exports via TVA DPP. |
| Knoxville Utilities Board | 2.7¢/kWh | Exports via TVA DPP. |
| EPB (Chattanooga) | 2.7¢/kWh | Exports via TVA DPP. |
| Middle Tennessee Electric | 2.7¢/kWh | Exports via TVA DPP; co-op may have additional fees. |
Solar incentives in Tennessee
The federal 30% Residential Clean Energy Credit ended for systems installed after December 31, 2025. What that means.
We didn't find active statewide solar incentives in Tennessee. Check with your utility for local rebates.
What solar costs in Tennessee
A fair cash price is around $3.60 per watt before incentives. For the 5.2 kW system that fits a typical home, expect roughly $15,900 to $22,500; smaller systems cost more per watt.
How many homes have solar
- Homes with net-metered solar (2025)
- 97
- Share of homes
- 0.0%
- Residential solar capacity
- 17 MW
- Growth over the past year
- -0.6%
Sources: EIA-861 (2025), EIA small-scale solar estimates, LBNL Tracking the Sun and state interconnection data.
Electric utilities in Tennessee
| Utility | Homes served | Price (2026 est.) | Typical use | Typical-home verdict |
|---|---|---|---|---|
| Nashville Electric Service | 424,808 | 14.4¢ | 1,040 kWh/mo | Not worth it |
| City of Memphis | 385,015 | 13.6¢ | 1,142 kWh/mo | Not worth it |
| Middle Tennessee E M C | 311,520 | 12.8¢ | 1,295 kWh/mo | Not worth it |
| Knoxville Utilities Board | 196,674 | 14.2¢ | 1,109 kWh/mo | Not worth it |
| City of Chattanooga | 164,914 | 13.3¢ | 1,123 kWh/mo | Not worth it |
| Volunteer Electric Cooperative | 105,248 | 13.4¢ | 1,210 kWh/mo | Not worth it |
| Cumberland Electric Member | 101,734 | 14.1¢ | 1,437 kWh/mo | Not worth it |
| City of Clarksville | 77,509 | 14.0¢ | 1,166 kWh/mo | Not worth it |
| Johnson City | 72,729 | 13.6¢ | 1,184 kWh/mo | Not worth it |
| Duck River Electric Member | 71,969 | 13.9¢ | 1,381 kWh/mo | Not worth it |
| City of Lenoir | 63,379 | 13.2¢ | 1,240 kWh/mo | Not worth it |
| Upper Cumberland E M C | 45,862 | 14.1¢ | 1,225 kWh/mo | Not worth it |
| Appalachian Electric Cooperative | 44,280 | 13.9¢ | 1,263 kWh/mo | Not worth it |
| Southwest Tennessee E M C | 43,847 | 14.1¢ | 1,322 kWh/mo | Not worth it |
| Kingsport Power | 43,364 | 12.6¢ | 1,290 kWh/mo | Not worth it |
| Sevier County Electric System | 36,001 | 12.4¢ | 1,174 kWh/mo | Not worth it |
| Sequachee Valley Electric Cooperative | 33,315 | 14.1¢ | 1,166 kWh/mo | Not worth it |
| City of Greeneville | 32,686 | 13.0¢ | 1,244 kWh/mo | Not worth it |
| City of Jackson | 32,264 | 12.9¢ | 1,089 kWh/mo | Not worth it |
| Columbia Power System | 32,032 | 13.1¢ | 1,110 kWh/mo | Not worth it |
| City of Dickson | 31,000 | 13.3¢ | 1,268 kWh/mo | Not worth it |
| Fort Loudoun Electric Cooperative | 30,743 | 13.2¢ | 1,368 kWh/mo | Not worth it |
| Meriwether Lewis Electric Cooperative | 30,485 | 14.6¢ | 1,211 kWh/mo | Not worth it |
| City of Bristol | 30,081 | 11.8¢ | 1,296 kWh/mo | Not worth it |
| Caney Fork Electric Cooperative | 29,863 | 14.0¢ | 1,194 kWh/mo | Not worth it |
Solar by city in Tennessee
- Nashville23.7-yr payback · Not worth it
- Memphis20.5-yr payback · Not worth it
- Knoxville23.6-yr payback · Not worth it
- ChattanoogaNo payback · Not worth it
- Clarksville23.7-yr payback · Not worth it
- MurfreesboroNo payback · Not worth it
- FranklinNo payback · Not worth it
- Johnson City24.4-yr payback · Not worth it
- JacksonNo payback · Not worth it
- Hendersonville23.4-yr payback · Not worth it
- Bartlett20.8-yr payback · Not worth it
- SmyrnaNo payback · Not worth it
- KingsportNo payback · Not worth it
- Spring Hill23.2-yr payback · Not worth it
- Collierville20.9-yr payback · Not worth it
- Cleveland24.5-yr payback · Not worth it
- Gallatin22.9-yr payback · Not worth it
- Brentwood23.3-yr payback · Not worth it
- ColumbiaNo payback · Not worth it
- LebanonNo payback · Not worth it
- Mount JulietNo payback · Not worth it
- Germantown20.8-yr payback · Not worth it
- La Vergne23.4-yr payback · Not worth it
- CookevilleNo payback · Not worth it
- Oak RidgeNo payback · Not worth it
- Maryville25-yr payback · Not worth it
- Morristown24.4-yr payback · Not worth it
- BristolNo payback · Not worth it
Protect yourself when buying
- Check the license. TN Board for Licensing Contractors license for projects >= $25,000 (electrical classification); licensed electrician / limited licensed electrician for smaller jobs; local permits. Look up an installer
- Cancellation rights. Federal law gives you 3 business days to cancel most door-to-door sales over $25. How to cancel
- HOA and solar access. Solar easements recognized; no statewide HOA protection.
- Community solar. Limited TVA/LPC programs only; no statewide program.
Questions about solar in Tennessee
Is solar worth it in Tennessee in 2026?
For a typical Tennessee home, solar is not worth it. A 5.2 kW system costing about $19,620 after state incentives saves about $768 in the first year and pays back in about 24 years. Your result depends on your roof, usage, utility and price, so run the calculator for your address.
How much do solar panels cost in Tennessee?
A reasonable cash price is around $3.60 per watt before incentives, or roughly $15,900 to $22,500 for a 5.2 kW system.
Does Tennessee have net metering?
Tennessee has no net metering law; almost all homes are served by TVA-supplied local power companies. Solar offsets your own usage, but exported power is typically bought at TVA's low wholesale avoided-cost rate (about 2.7 c/kWh in late 2026) or a local utility's own rate.
Is there a solar tax credit in Tennessee?
The 30% federal credit for homeowners ended for systems installed after 2025. Tennessee does not offer a state income tax credit for solar that we're aware of.
How do I check a solar installer's license in Tennessee?
TN Board for Licensing Contractors license for projects >= $25,000 (electrical classification); licensed electrician / limited licensed electrician for smaller jobs; local permits.. Look up any installer with the state's license search at https://verify.tn.gov/.
Policy research current as of October 2026; sources include stagingwpecs.energyright.com, energyright.com. Electricity data: EIA, through July 2026. Found something out of date? Tell us.