Solar panels in Tennessee: cost, payback and the rules that matter
Tennessee homes pay 13.9¢ per kWh for electricity, the 43rd highest of 51, up 4.9% in a year. A typical home needs 25 panels. With no federal tax credit they pay for themselves in about 15.8 yrs.
Four facts that decide solar in Tennessee
1. The sun. One kilowatt of panels makes about 1,342 kWh a year in the median Tennessee city, from 1,326 in Clarksville to 1,401 in Memphis.
2. The price of electricity. Every kWh your panels make is worth what you would otherwise pay: 13.9¢ in Tennessee today.
3. What your utility pays for exports. Most Tennessee utilities still credit exported solar close to the retail rate, but rules differ by utility and change often.
4. Incentives. The 30% federal Residential Clean Energy Credit (IRC §25D) ended for systems whose installation is completed after December 31, 2025 (One Big Beautiful Bill Act, P.L. We don't know of a statewide income-tax credit for home solar in Tennessee.
Tennessee's homes
2,824,277 households; 66.9% own their home. 1,713,085 owner-occupied single-family houses: the main market for rooftop solar. The median home was built in 1987; 63.7% heat with electricity.
ACS 2020–2024 5-year estimates, U.S. Census Bureau.
Plan a specific Tennessee home
Solar in every Tennessee city with 50,000+ people
| City | Sun hrs/day | kWh per kW | Best tilt | Typical kW | Payback (NM) | Payback (NB) | Solar ¢/kWh |
|---|---|---|---|---|---|---|---|
| Nashville | 4.8 | 1,340 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.6 |
| Memphis | 5.0 | 1,401 | 32° | 10.1 | 15.2 yrs | 24.5 yrs | 11.1 |
| Knoxville | 4.8 | 1,329 | 33° | 10.5 | 16.0 yrs | 25+ yrs | 11.7 |
| Chattanooga | 4.9 | 1,342 | 32° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Clarksville | 4.8 | 1,326 | 33° | 10.9 | 16.0 yrs | 25+ yrs | 11.7 |
| Murfreesboro | 4.8 | 1,346 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Franklin | 4.8 | 1,344 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Johnson City | 4.8 | 1,340 | 34° | 10.5 | 15.9 yrs | 25+ yrs | 11.6 |
| Jackson | 4.9 | 1,368 | 33° | 10.5 | 15.5 yrs | 25+ yrs | 11.3 |
| Hendersonville | 4.8 | 1,339 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.6 |
| Smyrna | 4.8 | 1,346 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Spring Hill | 4.8 | 1,347 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Kingsport | 4.8 | 1,326 | 33° | 10.9 | 16.0 yrs | 25+ yrs | 11.7 |
| Bartlett | 5.0 | 1,399 | 32° | 10.1 | 15.2 yrs | 24.6 yrs | 11.1 |
| Gallatin | 4.8 | 1,338 | 33° | 10.5 | 15.9 yrs | 25+ yrs | 11.6 |
| Lebanon | 4.8 | 1,338 | 33° | 10.5 | 15.9 yrs | 25+ yrs | 11.6 |
| Collierville | 5.0 | 1,396 | 32° | 10.1 | 15.2 yrs | 24.6 yrs | 11.1 |
| Cleveland | 4.9 | 1,342 | 33° | 10.5 | 15.8 yrs | 25+ yrs | 11.5 |
| Columbia | 4.9 | 1,349 | 33° | 10.5 | 15.7 yrs | 25+ yrs | 11.5 |
NM = exports credited at retail (net metering); NB = exports at ~30% of retail (net billing). Systems sized to the Tennessee average home. $3.00/W, cash, 25 years.
Rule changes that affect Tennessee
All changes and deadlines →- Federal: In-service deadline for the lease/PPA solar credit · Tax credits
- Federal: National data: solar prices fell to a median $3.60 per watt · Prices
- Federal: Construction-start deadline passed for the lease/PPA credit · Tax credits
- Federal: The 30% homeowner solar tax credit is gone · Tax credits
Questions about solar in Tennessee
How much do solar panels cost in Tennessee?
A 10.5 kW system, the size the average Tennessee home needs, costs about $26,250 to $39,375 before incentives in 2026.
Is solar worth it in Tennessee?
In the median Tennessee city, solar pays for itself in about 15.8 yrs if exported power earns the retail rate, or 25+ yrs if it earns about 30% of retail. Most utilities here still offer some form of net metering; check yours.
Is there a solar tax credit in Tennessee?
We know of no statewide income-tax credit for home solar in Tennessee; utilities and cities sometimes offer rebates. The 30% federal credit ended for homeowner systems installed after December 31, 2025.
How many solar panels does a Tennessee home need?
About 25 panels of 420 watts for the state-average 1,154 kWh a month. Sunnier cities need fewer: Memphis gets 1,401 kWh per kW a year, Clarksville 1,326.