Federal solar credit ended Dec 31, 2025
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Solar costs · Tennessee

Solar Panel Cost in Tennessee

Fact-checked by Sorted & Saved data desk
Updated Data verified Nov 5, 2026

A typical Tennessee home uses 1,154 kWh a month[1] of electricity. Covering that with solar takes a system of about 10.3 kW est.[1,2], which costs roughly $31,500 to $42,500 est.[1,2,3] before incentives at the state's median installed price. With Tennessee's average residential price of 13.80¢ per kWh[4], our model puts payback at more than 25 years est.[1,2,3,4,5]. Your quote, roof and utility plan will move these numbers, so treat them as a starting point.

On this page [ 7 ]

Tennessee solar at a glance

Average electricity price13.80¢/kWh[4]Jan–Aug 2026 average (preliminary)
Average home use1,154 kWh/mo[1]2024 average
Solar output per kW1,339 kWh/yr[2]PVWatts estimate for Nashville
Median installed price$3.60/W[3]Estimate, before incentives
Typical system10.3 kWSized to cover 100% of use
Typical price$37,100Estimate, before incentives
Year-1 savings$1,160Estimate
Payback>25 yrsEstimate, cash purchase

Estimates use the inputs above and the assumptions in our methodology: TVA credits exports from new solar customers at about 3.07¢ per kWh; we use it for Tennessee. Other utilities differ. Prices rise 2.5% a year; panels lose 0.5% a year.

Solar cost in Tennessee by system size

Same assumptions as the typical home above; only the system size changes. Prices are the state median before incentives and include the incentives our calculator applies by default in Tennessee.

SystemPrice before incentives[3]After incentiveskWh in year 1[2]Year-1 savings[4][5]Payback (years)
4 kW$14,400$14,4005,360$450>25
6 kW$21,600$21,6008,030$680>25
8 kW$28,800$28,80010,710$900>25
10 kW$36,000$36,00013,390$1,130>25
12 kW$43,200$43,20016,070$1,360>25

Incentives that lower the price in Tennessee

Federal · tax creditEnding soon

Business credit for leased and PPA systems (48E)

Claimed by the system owner, not the homeowner; solar must begin construction by July 4, 2026 or be in service by December 31, 2027[6]

If a company owns the panels on your roof (a lease or power purchase agreement), that company may claim the business clean electricity investment credit and can reflect it in your price. You cannot claim it yourself.

Who
Third-party-owned systems (leases and PPAs). Ask the provider whether the price assumes this credit.
Deadline
December 31, 2027
Checked
November 5, 2026

All Tennessee incentives, including utility and local programs →

How Tennessee utilities credit your solar

Tennessee has no statewide net metering rule; nearly all customers are served by TVA-powered local power companies. Under TVA's Dispersed Power Production (DPP) program, customers with qualifying facilities can use their own power and sell extra generation to TVA at TVA's avoided cost (well below retail), after signing an interconnection agreement with their local power company.[7]

We have not added every Tennessee utility yet, so the estimates on this page use the state-level rule: TVA credits exports from new solar customers at about 3.07¢ per kWh; we use it for Tennessee. Other utilities differ.[5]

Full Tennessee net metering and export-credit rules →

FAQ

Frequently asked questions

How much do solar panels cost in Tennessee?

At the state median installed price of $3.60 per watt est.[3], a 10.3 kW est.[1,2] system that covers a typical home's use costs about $37,100 est.[1,2,3] before incentives. Quotes vary with roof, equipment and installer.

How long does solar take to pay for itself in Tennessee?

For a cash purchase at the state's average electricity price of 13.80¢ per kWh[4], our model estimates more than 25 years est.[1,2,3,4,5]. Your utility's export credit and rate plan matter a lot; see the export-credit table above.

Is there still a federal solar tax credit?

Not for homeowners who buy. The Federal Residential Clean Energy Credit (25D)[8] does not apply to systems whose installation is completed after December 31, 2025. Leased and PPA systems are different: the company that owns the system may still claim a business credit.

sources

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Every number on this page links to one of these sources. Dates show when we last checked each one.

  1. EIA Electric Sales, Revenue, and Average Price 2024, Table 5A: Residential average monthly bill by stateeia.gov · checked Nov 5, 2026
  2. NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)pvwatts.nlr.gov · checked Nov 5, 2026
  3. U.S. Distributed Solar and Storage 2026 Data Update (Barbose, Darghouth, O'Shaughnessy, Forrester), Berkeley Labeta-publications.lbl.gov · checked Nov 5, 2026
  4. EIA Electric Power Monthly, Table 5.6.B: Average price of electricity by state, year-to-date (August 2026, preliminary)eia.gov · checked Nov 5, 2026
  5. TVA EnergyRight - July 2026 Dispersed Power Production (DPP) Guidelines, Attachment A price scheduleenergyright.com · checked Nov 5, 2026
  6. Public Law 119-21 - Sec. 70513(a) and (g)(5) (48E); Sec. 70512(a) and (l)(4) (45Y)govinfo.gov · checked Nov 5, 2026
  7. TVA Programs Overview (Jan 2024), TDEC Solar for All stakeholder meeting archivetn.gov · checked Nov 5, 2026
  8. IRS FS-2025-05: FAQs for modification of sections 25C, 25D, 25E, 30C, 30D, 45L, 45W, and 179D under Public Law 119-21 (OBBB)irs.gov · checked Nov 5, 2026

State data last re-checked November 5, 2026.

Change log

  1. Monthly output per kW in Nashville updated to [75.7, 84.4, 111.9, 122.9, 140.5, 132.3, 137.5, 132.7, 123.0, 109.0, 90.0, 78.7] kWh/kW/month (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).
  2. Average solar radiation on the panels in Nashville updated to 4.82 kWh/m2/day (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).
  3. Solar output per kW in Tennessee (PVWatts, Nashville) updated to 1338.5 kWh/kW/yr (NREL/NLR PVWatts v8 (1 kW-DC, fixed roof mount, 20° tilt, south-facing, 14% losses, TMY weather)).