Solar Panels in Tennessee2026 Cost Guide & Incentives
Average cost, state incentives, payback estimates, and how to find certified installers in Tennessee.
$16,000–$27,000
Avg system cost
$11,200–$18,900
After 30% ITC
4.7 hrs/day
Peak sun hours
$0.113/kWh
Avg rate
Is Solar Worth It in Tennessee?
Based on a home with a $150/month electric bill in Tennessee
Est. system size
8.5 kW
Gross cost
$24,774
Federal tax credit
−$7,432
Net cost
$17,342
Year-1 savings
$1,800
20-year savings
$45,911
Estimated payback: 9.6 years — then 10 years of free electricity.
* Estimates assume $2.90/W installed, 92% solar offset, and 3% annual electricity rate inflation. Get an installer quote to confirm your actual savings.
Tennessee Solar Incentives & Policies
Federal
Investment Tax Credit (ITC)
30%
of total system cost — off your federal tax bill
Available through 2032
Tennessee State
State Incentive
TVA Generation Partners program for excess energy
Additional Tennessee Solar Policies
Net Metering: Limited — check with your local utility
Property Tax Exemption: No exemption — solar adds to assessed value
Sales Tax Exemption: Sales tax applies to solar equipment purchase
Solar Installation Cost in Tennessee by System Size
| System size | Gross cost | After 30% ITC | Year-1 savings |
|---|---|---|---|
| 5 kW | $12,272,800 | $8,590,960 | $891,717/yr |
| 7 kW | $17,181,920 | $12,027,344 | $1,248,404/yr |
| 9 kW | $22,091,040 | $15,463,728 | $1,605,090/yr |
| 12 kW | $29,454,720 | $20,618,304 | $2,140,121/yr |
* Costs based on $2.90/W national average. Tennessee installer pricing may vary ±15%.
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Frequently Asked Questions — Solar in Tennessee
How much do solar panels cost in Tennessee?
Solar installation in Tennessee typically costs $16,000–$27,000 before incentives. After the 30% federal tax credit, most homeowners pay $11,200–$18,900 net.
Is solar worth it in Tennessee?
Yes — Tennessee homeowners benefit from 4.7 average peak sun hours per day. The 30% federal ITC combined with tva generation partners program for excess energy make the financial case strong for most homeowners.
What state incentives are available for solar in Tennessee?
TVA Generation Partners program for excess energy. On top of state incentives, all Tennessee homeowners qualify for the federal 30% Investment Tax Credit (ITC).
How long is the payback period for solar in Tennessee?
Based on Tennessee's average electricity rate of $0.113/kWh and 4.7 peak sun hours, most homeowners see payback in 9.6–13 years. Systems then produce free electricity for 15–20+ more years.
Does Tennessee have net metering?
Tennessee's net metering policy is limited. Check with your local utility for current export compensation rates, as policies vary by provider.