Is solar worth it in Tennessee?
A typical 7.7 kW home system in Tennessee takes about 20.7 years to pay for itself, so it is a long wait at today's prices, with no federal tax credit. That ranks 47 of 51 (1 is the fastest payback).
Payback in Tennessee under three net metering rules
| How exports are credited | Payback | Net gain over 25 years |
|---|---|---|
| Full net metering | 17.0 years | $15,570 |
| About half the rate | 20.7 years | $6,920 |
| A low rate | 23.2 years | $2,590 |
All three use the median installed price of $3.60 per watt, about $27,720 before any state or utility rebate. Paying cash at the median cash price of $3.00 per watt ($23,100) brings the partial-net-metering payback to 17.7 years. Ask your utility which export rule applies to new systems, because it moves the answer more than anything else.
What makes the difference
Two things decide payback: how much you pay for electricity and how much sun your roof gets. Tennessee power costs less than the US average, and each kW of panels here makes about 1,357 kWh a year. States with a similar electricity price: Oklahoma (19.1 years), Arkansas (20.2 years), Wyoming (18.9 years), Montana (20.4 years).
Before you sign
- Get at least two written quotes, and compare them per watt (total price divided by system size in watts).
- Ask whether the quote includes permits, monitoring and a production warranty, and who replaces the inverter.
- Check your roof: replacing it in a few years means paying to take the panels off and put them back.
- If you are also thinking about new windows, see the window cost calculator and is my window quote fair.
How we work it out
- Sunlight: NASA POWER all-sky solar irradiance climatology (2001-2025), calibrated to NREL PVWatts v8 (fixed roof array, 20 degree tilt, south-facing, 14% losses). Our estimate was within about 6% of PVWatts at eight test locations from Honolulu to Anchorage. Shade, a roof that faces east or west, or a steeper or flatter roof all change the real figure.
- Electricity price: EIA Electric Power Monthly, Table 5.6.B, residential, year to date through August 2026 (cents per kWh). We assume it rises 2% a year, and the panels lose 0.5% of their output a year.
- Installed price: median of $3.60 per watt before incentives for homeowner-owned systems ($3.00 for cash purchases, $4.50 for loan-financed), and a median system size of 7.7 kW. Source: Berkeley Lab, U.S. Distributed Solar and Storage, 2026 data update (2025 installs, host-owned, before incentives).
- Tax credit: none. The 30% federal credit for homeowners (Section 25D) ended for systems installed after December 31, 2025. Leases and power purchase agreements are priced differently and are not modeled here.
- Net metering: "Full" values every kWh at your retail rate. "Partial" assumes you use 60% of the power at home and the rest is credited at half the rate; "Low" credits exports at a quarter. Your utility's rules decide which is closest.
- Not included: batteries, financing costs, insurance, inverter replacement (often needed once in 25 years), local permits or state rebates. Get at least two written quotes before you decide.