Is Solar Worth It in Tennessee? An Honest 2026 Look

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Tennessee gets plenty of sun, so rooftop solar sounds like an easy win. But Tennessee is also a tricky state for solar, and 2026 brought some big changes. Here’s an honest look at the numbers so you can decide for yourself.

The short answer

For most Tennessee homeowners, rooftop solar is a long-term investment, not a quick money-saver. It can make sense if you plan to stay in your home a long time, use a lot of electricity, or want backup power. But payback is slow compared to many other states.

Why Tennessee is different

1. Electricity is already cheap

Tennessee’s electricity comes mostly from the Tennessee Valley Authority (TVA), sold through local power companies like EPB in Chattanooga and NES in Nashville. In 2026, the average Tennessee home pays roughly 13 to 15 cents per kWh, about 20 to 25% below the national average. Cheaper power means solar saves you less per panel.

2. No net metering

In many states, extra solar power you send to the grid earns a credit at full retail price. Tennessee doesn’t have net metering. Instead, most local power companies offer TVA’s Dispersed Power Production program, which buys your extra power at a much lower rate, often only about 2 to 5 cents per kWh. Some utilities also charge a monthly fee to take part.

That means solar in Tennessee works best when you use the power yourself instead of sending it back to the grid.

3. The federal tax credit ended

The 30% federal residential solar tax credit ended on December 31, 2025. If you buy and install solar in 2026, you no longer get that credit. This is the biggest change for buyers this year.

What still helps

• Property tax break: Tennessee limits how much a qualifying solar system can raise your home’s assessed value, so solar won’t push your property taxes up much.
• Leases and PPAs: With a lease or power purchase agreement, a solar company owns the panels and sells you the power. Companies can still claim some business tax credits, which can lower your cost. Read the contract carefully, and know what happens if you sell your home.
• Falling equipment prices: Panels are much cheaper than they were 10 years ago.

A rough example

In Tennessee, each kilowatt (kW) of solar panels makes about 1,200 to 1,400 kWh per year. A 7 kW system might make around 9,000 kWh per year.

If you used every bit of that power yourself at about 13 cents per kWh, you’d save roughly $1,100 to $1,200 per year. But in real life, some power goes back to the grid at the lower buyback rate, so actual savings are usually less.

With no federal credit, many Tennessee homeowners who pay cash should expect a payback period of 15 years or more. Panels usually last 25 years or longer, so you can still come out ahead, but slowly.

These are rough estimates. Your real numbers depend on your roof, shade, usage, and local power company. Always get quotes from several installers.

When solar makes sense in Tennessee

• You plan to stay in your home for 15+ years.
• Your roof faces south or west with little shade.
• You use a lot of electricity (big family, electric heat, or an electric car).
• You want backup power and plan to add a battery so you can use your own solar at night and during outages.

A smaller, cheaper way to start

Not ready for a full rooftop system? A portable power station with solar panels is a low-cost way to get backup power and try solar without any installation. It won’t cut your bill much, but it keeps your fridge, Wi-Fi, and phones running during outages.

Learn more in how many solar panels you need to charge a power station and solar generator vs gas generator.

The bottom line

Solar in Tennessee is possible but slow to pay off in 2026: cheap power, no net metering, and no federal tax credit all work against fast savings. If you’re staying long-term, use a lot of power, or want backup, it can still be a smart move. Get multiple quotes, and ask each installer to show savings based on your bill and your local power company’s rules.