Is Solar Worth It in Tennessee? 2026 Rates & Payback
Is solar worth it in Tennessee?
Less attractiveAt 13.7¢/kWh, payback in Tennessee takes about 16.2 years, so the financial case is weaker here.
Electricity here is 29% cheaper than the national average (~19.3¢/kWh).
Rates in Tennessee rose 22% from 2020 to 2025. If prices rise 3% a year, payback drops to about 13.4 years. Try other scenarios ↓
Get free quotes from local installersEstimates only. Actual results depend on your home, installer and local rules. Learn more: Is solar worth it in 2026? · What if electricity prices rise?
At 13.7¢/kWh, a home using 900 kWh a month pays about $123. A 6 kW rooftop system here produces roughly 8,100 kWh a year. At $3.00/W ($18,000, before incentives), the savings would pay off the system in about 16.2 years — slower than most, mainly due to low rates or less sun.
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Estimate based on average system size and current rates. Actual results vary.
What if electricity prices rise?
Many states have seen rates rise faster than 3% in recent years.
Do nothing: over 25 years you'd pay about $40,488 for the electricity a 6 kW system would otherwise produce — money that stays with the utility instead of paying off your panels.
Estimates only. Actual results depend on your home, installer and local rules.
Electricity rate trend
From 2020 to 2025, the average residential rate went from 10.8¢ to 13.2¢/kWh — +22% in 5 years.
If rates continue at a similar pace, solar payback shortens further.
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Electricity price trend
Electricity in Tennessee went up 28% since 2015 (about 2.5% per year).
Average residential price, ¢/kWh (EIA yearly data).
For a 6 kW system. Yearly price rise capped at 5% in this estimate. Future prices are not guaranteed.
Major utilities & net metering
- TVA via local utilities (e.g. NES, MLGW, EPB)
TVA does not offer net metering; export is usually paid at a low rate.
Net metering: Limited — no statewide net metering rule; export credit depends on your utility and is often low.
General guide — check your utility for current rates.
Solar installers in Tennessee
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Data based on EIA and NREL PVWatts (rates for 2026-07). Some figures are sample estimates because a data service was unavailable.