Is Solar Worth It in Tennessee in 2026?
Complete analysis of solar costs, incentives, net metering, and payback for Tennessee homeowners — without the federal ITC.
Cost Per Watt
$2.70
installed
Electricity Rate
$0.128
per kWh
Payback (No ITC)
15.3 yr
current reality
Payback (With 30% ITC)
10.7 yr
hypothetical
25-Year ROI
63%
return on investment
Incentive Breakdown — Tennessee
Available incentives for a typical 7kW residential solar system in Tennessee
Federal ITC (25D)
ExpiredThe federal solar Investment Tax Credit expired on January 1, 2026. No federal credit available for new installations.
State Tax Credit
NoneTennessee does not offer a state tax credit for solar installations.
SREC Market
Not AvailableTennessee does not have a traditional SREC market.
Property Tax Exemption
No statewide property tax exemption for solar
Sales Tax Exemption
No statewide sales tax exemption for solar
Key Incentives: Limited state-level solar incentives.
Solar Math — With vs Without Federal ITC
Cost breakdown for a typical 7kW residential system in Tennessee
2026 Reality (No Federal ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.70/W
- Gross Cost
- $18,900
- Federal ITC
- $0
- Net Cost
- $18,900
- Annual Savings
- $1,234/yr
- Payback Period
- 15.3 years
Hypothetical (With 30% ITC)
- System Size
- 7 kW
- Cost per Watt
- $2.70/W
- Gross Cost
- $18,900
- Federal ITC (30%)
- -$5,670
- Net Cost
- $13,230
- Annual Savings
- $1,234/yr
- Payback Period
- 10.7 years
Impact: Without the federal ITC, Tennessee homeowners face a 4.6-year longer payback period — paying $5,670 more out of pocket.
Net Metering Policy — Tennessee
How Tennessee compensates your excess solar production
No statewide net metering mandate. Export compensation varies by utility and is typically minimal.
Tennessee (TVA territory) does not have traditional net metering. TVA offers Green Power Providers or Dispersed Power Production programs.
Cost Per Watt Benchmark — Tennessee
Tennessee Average
$2.70/W
National Average
$3.05/W
Typical 7kW System
$18,900
Tennessee's average installed cost is below the national average of $3.05/W
Breakeven Timeline
Without the federal ITC, a typical 7kW system in Tennessee breaks even in 15.3 years. With the former 30% ITC, payback would drop to 10.7 years.
Without Federal ITC
15.3
years to break even
With Former 30% ITC
10.7
years to break even
Production Details
Ready to Go Solar in Tennessee?
Get free, no-obligation quotes from certified solar installers in Tennessee and see real pricing for your home.
Get Free Solar Quotes