Cost of solar panels in Tennessee

How much is it to go solar in 2024?

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The average cost to install solar panels is $29,880 in Tennessee before the federal solar investment tax credit (ITC). The price drops to $20,916 after the full ITC.

Going solar in the Big Bend State is about 25% more expensive than the national average. The out-of-pocket investment is higher compared with other states, and Tennessee only offers one local solar incentive to lower the cost. Still, there are other ways to save on the cost of your new solar system.


Key insights

  • The average cost per watt is $3.23 in Tennessee.
  • The average payback period is 13 years if you pay for your solar panel system upfront.
  • Tennessee residents with solar panels save an estimated $19,688 over 25 years.

How much do solar panels cost in Tennessee?

Installing residential solar panels can cost between $10,000 to $30,000 or more, though individual costs vary. On average, residents of Tennessee pay $29,880 before tax credits for their system. On the higher end, John in Smithville said his system was $50,000, and Billy in Brush Creek said they paid $80,000.

Your system's size can be a big factor in how much you pay overall. Systems with higher power output are typically more expensive. The average size of solar systems in Tennessee is 12 kW.

Average cost by system size in Tennessee

Source: EcoWatch

Are solar panels worth it in Tennessee?

We talked to several Tennessee residents who have gone solar. Many of them tell us it’s worth it for the significant savings they’re getting on electric bills since installing solar panels.

Tennessee receives an average of 3.5 to 4.5 peak sun hours a day.

For others, it’s worth it for energy independence. “Whenever we have storms, it's nice to have a backup,” David in Knoxville told us. “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.”

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

However, not everyone is happy with the decision. Some people tell us about design flaws and problems with their equipment.

AJ in Knoxville went solar years ago. His advice to other residents: “This is a major decision when purchasing these products. I would suggest studying the financial aspect and your budget to see if this is the right decision for you and your family.”

» STILL NOT SURE? Solar energy pros and cons

Cost factors of going solar in Tennessee

When investing in solar panels, the actual cost can vary widely depending on the equipment you choose, how you pay and other factors. Understanding these elements can help you determine the overall investment required for your solar energy setup.

Size of your system

You can easily determine what size system you need. First, find out the amount of electricity you used in the last year in kilowatt-hours (kWh). You’ll find this information through your electric bill’s online account dashboard. Then, divide your annual kWh by 1,200 to find the system size you need. For example, the typical Tennessee household uses 14,196 kWh per year. Using this formula, the typical household would need a 12-kW system.

» WATT’S THE DIFFERENCE? kW vs. kWh

Solar equipment costs

While some equipment, like solar batteries and monitoring systems, are optional, you still need panels and inverters. On average, solar panels are priced at around $2.49 per watt in Tennessee. Here are some average costs you can expect for other equipment:

Condition of your roof

Quality solar panels should last 25 to 30 years. Your roof should be in good shape before you install panels so they can have a long life span together. If your roof isn’t in good shape, the weight of the panels could damage your roof. To prevent additional costs, make sure to have your roof inspected beforehand.

» SHOULD YOU: Replace your roof before going solar?

How you pay

You can buy your solar energy system outright, but what if you don’t have the funds? Most people finance solar panels with a solar loan. It works much like any other type of loan since there’s an application and approval process. Solar loans cost more than paying upfront because you pay it back over time with interest.

You can also go with leasing solar equipment or entering a power purchase agreement (PPA). Both need little to no upfront cash.

» SOLAR PANELS: Lease vs. buy

Local permits and fees

Towns typically have specific regulations regarding the permits required for installing a solar system, and these permit fees can cost quite a bit. However, if your residence is outside the city boundaries, you might not need permits. It's always smart to confirm this before planning your installation.

Some solar companies handle the permit process for you. It's a good idea to inquire about this service before finalizing your contract.

» TIPS: How to get the best solar quotes

Solar incentives, tax credits and rebates in Tennessee

The average federal solar investment tax credit value in Tennessee is $8,964 in 2023.

The federal solar investment tax credit (ITC) is the biggest factor in reducing the cost of going solar in Tennessee. If you install a residential solar panel system by the end of 2032, you will receive a federal income tax credit equal to 30% of your system's total cost, including equipment, labor and permits. The credit drops to 26% in 2033 and 22% in 2034.

Tennessee also offers property tax abatements to homes that have installed solar.

» EXPLORE: Tennessee solar incentives

Compare solar installation companies in Tennessee

Compare popular solar companies available in Tennessee below. Read our guide to finding the best solar companies for more.

Do you own or rent?

FAQ

How are solar costs trending in Tennessee?

The cost to go solar in Tennessee has fallen 43% over the last 10 years, according to the Solar Energy Industries Association.

Can I get free solar panels in Tennessee?

You can lease or enter a PPA with little to no upfront costs. Still, neither is totally free. Solar leases generally require a flat monthly fee; PPAs make you pay per unit of electricity.

» FREE SOLAR PANELS: Are they really free?

How much can I save with solar panels?

When you pay upfront, the average 25-year savings with solar is $19,688 in Tennessee. It’s a common misconception that solar panels always completely eliminate your monthly power bill — this is not always the case.

The good news is people who still have a bill after going solar are paying significantly less than they were before. You can expect to offset your electricity bill by 52% to 70%, according to EnergySage.

» EXPLORE: Where solar savings go the furthest

How does net metering work in Tennessee?

When your solar system produces more energy than required to run your home, you can sell the extra energy to your local electric company. This process is called net metering.

In Tennessee, there are no specific net metering policies. This absence of state laws means electric companies aren't required to provide net metering options. However, this doesn't rule out the possibility of local electric companies offering net metering programs. A notable example is Appalachian Power, which has its own net metering program.

» COMPARE: Best solar monitoring systems

Is it cheaper to install solar panels myself?

It’s potentially cheaper to DIY the installation of your system, but also difficult and dangerous if you don’t know what you’re doing, especially for a large residential project. We recommend leaving installation to professionals unless you have experience with installing solar equipment.

» DIY solar panels: Pros and cons

Bottom line

Even though solar is more expensive in Tennessee than in several neighboring states, you can get a property tax abatement and the ITC to lower the costs. Plus, over an average of 25 years, you could save around $19,688.

» GUIDE: Solar panel installation 

Solar costs: Tennessee vs. nearby states

*Before the federal investment tax credit (ITC); **When you pay in full upfront

Article sources

ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:

  1. EcoWatch, “How Much Do Solar Panels Cost in Tennessee?” Accessed Nov. 10, 2023.
  2. Office of Energy Efficiency & Renewable Energy, “Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics.” Accessed Nov. 10, 2023.
  3. Solar Energy Industries Association, “Tennessee Solar.” Accessed Nov. 10, 2023.
  4. DSIRE, “Tennessee Solar Programs.” Accessed Nov. 10, 2023.
  5. EnergySage, “Tennessee solar panels: local pricing and installation data.” Accessed Nov. 10, 2023.
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