Are Solar Panels Worth It in Tennessee?

5 factors to consider before getting solar panels in Tennessee

ConsumerAffairs has heard from thousands of solar customers who have already gone through the installation process, including dozens from Tennessee. Here’s what to consider before making the switch.

1. Solar panel installation costs
2. Your energy consumption
3. Tennessee solar incentives
4. How long you stay in your house
5. How you pay

1. Solar panel installation costs

Average solar panel costs in Tennessee are comparable to the national average. A typical residential solar panel system costs $20,435 in Tennessee. However, adding a solar storage battery can add $7,000 to $18,000 to your total system costs.

Most installers set the price according to the system's wattage, with a typical cost between $2.50 and $5 per watt. “Cost per watt” is a little like looking at the price per square foot when you buy a house. It helps you compare the value of solar energy systems in different sizes. In Tennessee, the average cost per watt is $3.05.

Solar panel costs by system size in Tennessee

2. Your current energy consumption

A typical Tennessee household needs a system with a capacity of 6.7 kW to offset its electricity needs with solar energy. You might need a larger or smaller system, depending on your current energy consumption.

If you have older electrical appliances, upgrade those before investing in solar panels. With a lower average electrical load, you can get an overall smaller (and cheaper) system.

Then, once you know your current energy consumption, you can calculate your potential savings and the time it should take for your solar installation to pay for itself.

3. Tennessee solar incentives

The 30% federal residential solar tax credit has expired, but Tennessee still offers some solar incentives. The main statewide benefit is a property tax break.

Here's how it works: Qualifying solar systems are taxed on only a small portion of their installed value. This can reduce how much your property taxes increase after adding solar. Your system must be certified by the state to qualify.

What to know about net metering in Tennessee

Tennessee doesn’t have a statewide net metering policy, so solar credit rates depend on your utility.

If your utility is a TVA partner, you may be able to sell extra solar power back to the grid at TVA’s avoided-cost rate. Appalachian Power customers can also take advantage of net metering in its Tennessee service area.

Because exported solar is often worth less than the electricity you buy, you’ll usually save more by using your solar power at home. A battery can help you do that, but it typically adds $7,000 to $18,000 to the cost.

» LEARN MORE: Solar incentives in Tennessee

4. How long you plan to stay in your house

It takes years for electric bill savings to make up for the initial cost — about 18.36 years on average in Tennessee. If you sell your house and move before then, you might not fully realize the financial benefits of your solar investment.

A Zillow study found that, on average, houses with solar panels sell for 4.1% more. Let’s say you spend $25,000 putting solar panels on a house that costs $400,000. It might sell for $16,400 more in a few years. But, you miss out on some of that $2,846 in total avoided utility costs over 25 years.

In other words, don't get solar panels just because you want to sell your house soon. Consider a home improvement project with a better return on investment, like remodeling the bathroom or kitchen, instead.

5. How you pay

It’s great if you can pay for the whole thing upfront. Of course, cash isn’t always an option. That’s when loans, leases and other agreements come into play.

• Solar loans work like any other type of home improvement loan. There’s an application and approval process. You pay it back over time (with interest) each month.

• Leasing solar panels lets you set up a system without the high upfront costs. Monthly payments usually range $150 to $250. Agreements last 20 to 25 years.

• PACE financing: Tennessee does not currently have active PACE programs for single-family homes. Most PACE opportunities are for commercial properties.

What Tennessee homeowners say about solar panels

Tennessee solar customers often report reliable equipment, lower electric bills and the peace of mind that comes with backup power.

“Whenever we have storms, it's nice to have a backup,” David in Knoxville said. “I wanted to have something that was sized to be able to run my refrigerator. If we ever did have a power outage, that's 500 bucks worth of food.”

Clyde in Sparta had a similar experience: “The system is lovely, and I save a little money with it. The convenience of having backup power is sort of self-fulfilling.”

Not everyone had a positive experience, though. Several customers said their systems didn’t perform as promised and reported trouble getting repairs or property damage resolved. One Tennessee customer said their $80,000 system rarely worked, produced less power than expected and caused damage to their roof and home.

Is my house a good candidate for solar panels?

Going solar ends up being worth it for many homeowners as long as their house is a good candidate to support the panel installation. Here’s what else to think about before you commit:

• How much sunlight do I get? Solar panels need regular exposure to sunlight to produce the most energy possible. Tennessee averages 3.5 to 4.5 peak sun hours each day. However, lots of shading — like trees or tall buildings above your roof — could make your solar system less efficient.

• What is the size and angle of my roof? Tennessee (and the rest of the United States) is in the Northern Hemisphere, so solar panels perform best on south-facing roofs. The worst place to install would be on north-facing roofs, especially if those roofs have a high pitch. For example, if the only place you can install is a north-facing roof with a 30-degree pitch, your costs will likely go up by 30% to 40%.

• What is the condition of my roof? If you have to replace your roof, do that before you install solar panels. Solar panels are designed to last up to 30 years, so you want your roof to last just as long. Otherwise, it could cost thousands to remove the panels, fix your roof and reinstall the panels.

One of the most common complaints is related to pushy sales reps who make promises that can’t be delivered. That’s why it’s so important to thoroughly research and verify claims made by sales teams before making a decision.

Pros and cons of solar panels in Tennessee

It’s a common misconception that solar panels will completely eliminate your monthly power bill — this is not always the case.

Find solar companies in Tennessee

A good solar company helps you navigate local incentives, permitting and net metering policies. Compare our picks for Tennessee’s top solar companies to learn more.

Tennessee solar FAQ

Bottom line: Is going solar in Tennessee worth it for you?

Solar panels are generally worth it if you like the idea of cheap, clean energy. The main drawback is the high upfront cost of purchasing and installing the equipment. On the bright side, once that’s paid for, solar panels can significantly reduce or even eliminate your electricity bills. For many Tennesseans, the long-term savings outweigh the upfront costs over time.

Solar costs vs. savings: Tennessee and nearby states