Tennessee solar panels: The complete guide in 2024

Data updated Jun 11, 2024

Written by: Emily Walker

Interested in going solar? You'll need to install a 11.07 kW solar panel system to cover the average electric bill in Tennessee, which will cost you about $26,118 after the federal tax credit.

Cost for an average system in Tennessee


Out of pocket cost, cash
$37,311
Federal tax credit (30%)
- $11,193
Price post tax credit
$26,118

20-year savings $12,415
Payback period 13 Years
Electricity offset 72%
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As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).

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Going solar in Tennessee

Looking to power your home with clean, sustainable energy that’ll boost your energy independence? Going solar in sunny Tennessee reduces your carbon footprint and your reliance on the utility electric grid. 

Factor in the federal solar tax credit, and Tennesseans can cut the cost of solar by thousands of dollars, speeding up your payback period and increasing the value of your investment. 

Here's our guide to going solar in the Volunteer State.

Cost

How much do solar panels cost in Tennessee?

Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Tennessee homeowner needs a 11.07 kW solar panel system to cover their electricity needs, which comes out to $37,311 before incentives. Prices range from $31,714 to $42,908, but after the federal tax credit, that drops by 30%. 

Over 3,400 Tennessee homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 13.29 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.

There are a few ways to finance your solar panel system so you don't have to provide all that money upfront. 

  • Cash purchase: You'll own the system and pay for it upfront. This provides the best long-term savings. 

  • Solar loan: Allows you to retain ownership of your system, while owing little to no money upfront. Solar loans aren't all created equal: If you have access to subsidized clean energy loans through local incentive programs, that's usually your best bet. A home equity loan or a personal loan are often your next best options – private solar loans typically come with higher interest rates or upfront fees.

  • Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). These generally provide the lowest savings and generate the most negative press about solar. If you choose this financing option, read the fine print: You can get trapped in them for longer than you'd like.

Solar panels on a house

Incentives

What are the best solar rebates and incentives in Tennessee?

Incentives help bring solar's price tag down considerably in Tennessee. Here are the major ones to know about:

Incentive
Average savings in Tennessee
Description

Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC)

$11,193

Lowers your solar panel system's cost by 30%

Green energy property tax exemption

-

If you add solar energy as a source of power to your home, you only have to pay property taxes on 12.5% of your total installation cost.

Is net metering available in Tennessee?

Tennessee doesn’t offer net metering, but Tennessee Valley Authority (TVA) utilities do offer the Dispersed Power Production Program to some customers—you’ll only earn a few cents per kWh sent to the grid, which isn’t great.

Your best bet is to install a solar battery alongside your solar panels, which can store excess solar energy for later use.

A house with rooftop solar panels connected to the grid

Equipment

Equipment quality

Each year, solar panels get more and more efficient—that is, they produce more power per square foot. As of 2024, the most popular solar panels can produce about 400 watts of electricity when they’re in full sunlight. If you want to make the most of your roof’s solar potential, get panels with at least that much power output.  

You should also make sure to select a solar inverter setup that makes sense for your roof’s layout. 

And if you want or need a solar battery, be sure to pick one that can integrate cleanly with that inverter. 

Premium equipment can come with a high price tag, but it will often save you more money in the long run. The best equipment tends to have the best warranty terms, often guaranteed to 25 years (sometimes even 40!), so you’re covered in case you need repairs or replacements. The highest-quality panels also degrade more slowly, so they’ll maintain more of their power output further into the future. 

See our list of the best solar panels

resources

Top solar resources for Tennessee

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