How Much Do Solar Panels Cost in Tennessee? (2024 Savings Guide)

How Do Tennessee’s Solar Prices Compare to the National Average?

Solar equipment is relatively expensive in Tennessee on a per-watt basis, with the in-state cost of $3.21 sitting around $0.12 per watt below the national average of $3.33. That makes Tennessee the sixth most affordable state in the country for solar equipment based on the per-watt price. As such, your money goes further than it would in most other states on a per-dollar basis.

However, Tennesseeans also use more electricity per month than residents of all but one state, and higher energy demands mean larger system sizes are required to offset utility bills. Residents need a 12 kW system, on average, to meet their energy needs, which is about 33% larger than most U.S. homeowners need — 9 kW.

The larger system size means all-in installation prices are higher. The typical total solar conversion cost in Tennessee is $9,630 higher than the national average before the federal credit and nearly $6,741 higher after the credit.

What Are the Main Factors of Solar System Costs in Tennessee?

System size is the biggest cost factor when estimating the cost of your solar system in Tennessee, and there are some related factors that dictate the size of the system you need and the quality of the panels. These include the following:

• The above-average energy demands in Tennessee
• The lack of a statewide net metering program in Tennessee
• The average amount of sunshine per year in the area

We’ll explain how these things play into your total system costs in the following sections.

The Above-Average Energy Demands in Tennessee

One of the most important factors to consider when sizing your solar array is the amount of energy your home consumes on a monthly basis. The higher your consumption, the larger your system will need to be to offset that usage. Higher consumption means larger systems, which, in turn, means higher installation totals.

According to the Energy Industries Association, Tennessee residents use an average of 1,168 kilowatt-hours (kWh) of electricity each month, putting it in second place in the country for the most energy used monthly. That translates to a typical system size of 12 kW, which is significantly larger than the national average of 9 kW.

Even though the per-watt price in Tennessee is relatively low, those additional three kilowatts of panels equate to around $9,000 more than Tennesseeans have to pay to go solar than residents in other states would, just because they use more power each month.

The Lack of Net Metering in Tennessee

Net metering is one of the most beneficial solar incentives available in the country, but it’s offered on a state-to-state basis. It allows solar customers to overproduce energy and “store” the excess power with their utility company. You basically earn credits for excess energy production and can then call on those credits to offset consumption and electricity rates during times of underproduction, like at night or on cloudy days.

Unfortunately, Tennessee does not offer a statewide net metering program, so many customers — including those serviced by the Tennessee Valley Authority (TVA) — won’t have access to the perk. Since energy consumption is so high in the area and net energy metering isn’t available, many customers opt to install solar batteries alongside their panels, which effectively gives them access to net metering.

Solar batteries are usually a great renewable energy investment in areas without net energy metering, and they frequently pay for themselves and more. However, they do cost around $10,000 each, so they will bump up your installation prices in Tennessee. We do still recommend opting for a solar battery if your electric company doesn’t offer net metering.

The Average Amount of Sunny Days in Tennessee

A big part of the solar array size required in any area is the availability of the sunlight. Larger systems might be required to make the most of the sunlight in low-sun areas, which would, of course, drive up your installation costs.

Thankfully, Tennessee sees around 207 sunny days per year, which is just above the national average of 205 days. Since sunlight is readily available in the area, systems usually don’t need to be upsized much unless you have excessive shading on your property.

We do still recommend having a professional solar installation company size your system for your home. This will lead to the best chances of being able to eliminate your electric bills and maximize your long-term savings.
Watch Below: What Should You Know Before Going Solar?

Additional Costs of Going Solar in Tennessee

Most solar customers only think about the cost of panels when estimating their solar conversion costs, but there are some other things you might need to consider that can drive up your total. We’ll discuss some of these other cost factors below.

• Building permits: All municipalities in Tennessee require building permits to be filed for and pulled before any solar equipment can be installed. Building permits range in price based on where you live, but you can typically expect to pay between $100 and $450 for your permits. The fee is usually paid by your installer but passed on to you as an additional line item on your solar quote and invoice.

• Interconnection fees: Interconnection is the term used to describe how your solar array gets connected to the electric grid, which gives you the ability to pull power from the grid or generate your own. Most systems in TN are grid-tied. Your power company will require an interconnection application to be filed before your system can be connected. The application fee usually ranges from $25 to $150 and is based on your utility provider.

• Product markup and administration fees: The installer you choose will play a pretty significant role in your system total, in part because each company can mark up equipment differently and charge different fees for things like filing for permits and tax incentives in your area. These charges can total several hundred dollars in some cases.

• Additional solar equipment: The biggest portion of your installation price will be the panel price and the cost of larger add-on products, like batteries and electric vehicle (EV) chargers. However, there are some other components you might need to consider the price of, including conduit to route wiring to your breaker, wiring, mounting racks, squirrel guards and inverters. These usually add a few hundred dollars to your total.

What Maintenance Costs Can Solar Owners Expect in Tennessee?

Installing solar in Tennessee is expensive, but thankfully, the large majority of the costs related to your system will be charged initially, and you shouldn’t be on the hook for any ongoing costs.

In some areas, solar customers pay for panel cleaning services one to two times a year. These services usually cost between $100 and $150 per visit, and they keep your panels free of debris so that their production capabilities remain close to their peak. In an area like Tennessee, where annual rainfall is nearly double the national average, the rain should keep your panels plenty clean, so these services aren’t usually necessary or recommended.

Provided you choose a reputable installer that offers robust warranty coverage, any other costs that might come up for system repair or replacement should be covered by your warranties.

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Which Solar Financing Options Will Help You Save the Most in Tennessee?

There are four primary payment options you can consider for your solar system, depending on the installer you hire. These include cash, a solar loan, a solar lease and a power purchase agreement (PPA). Keep in mind that not all options are available from all installers, as many only accept cash and loans.

Of the four options, paying in cash is going to mean the highest initial costs, as you’ll need to pay for the entire system at once. However, it’s the option we recommend the most because it leads to immediate system ownership. That means the shortest panel payback period, the greatest long-term savings and a boosted home value.

A solar loan is the next best option, in our opinion. You will pay interest on your loan, which will extend your panel payback period by around four years, and your total system price — including interest — will go up by around $5,000.

While a loan isn’t as beneficial as a cash purchase in terms of energy savings, it is a more accessible option. Provided you have the credit score to qualify for financing, you could have a down payment as low as $0, and you’ll be on the hook for low monthly payments as opposed to $38,000+ all at once. A loan will also usually not complicate the sale of your home, which can’t be said about leases or PPAs.

Solar leases are arrangements where you pay a monthly rental fee for your panels, and you get to use the energy they generate to accumulate savings on your electric bills. Leases can be decent options if you can’t make cash or a loan work, especially since they come with minimal initial costs and often no money out of pocket at all if they’re structured properly.

Power purchase agreements are where solar panels are installed on your home at no cost, and you buy the solar energy they generate at a discounted rate. Since the per-kWh rate is set below the retail rate for electricity, you are expected to save money over time.

These last two options save far less over time than cash purchases and loans, and they can make selling your home more complicated if the buyer doesn’t want to assume the contract. They don’t boost your property value, and they don’t let you take the federal solar tax credit, an average value of $11,556 in Tennessee you’ll miss out on.

If you’re not sure which option works best for you, we recommend using our solar calculator to see what your system will total. You can then choose the option that fits into your budget based on that price and the chart below.

If you want to keep your options open, you can consider going solar with SunPower or Shine Solar, both of which operate in your area and accept all four payment options.

What Are Other Ways You Can Save When Going Solar in Tennessee?

Choosing the right financing option for your solar array is one of the best ways to maximize your solar savings in the long run, but there are some other things you can do to keep your costs low. Some of the most beneficial money-saving tips when going solar in Tennessee include the following:

• Consider installing a solar battery
• Choose a high-efficiency panel brand
• Take advantage of Tennessee solar equipment incentives

We’ll explain how these tips can save you money on your solar array in the following sections.

Consider Installing a Solar Battery

Solar batteries are popular options for solar customers in areas like Tennessee, where net energy metering isn’t widely available. Choosing a solar battery will drive up your installation totals by around $10,000 per battery, but given the lack of a statewide net metering policy, it’s likely to pay for itself and provide additional savings beyond that point.

Solar batteries let you make the most of your solar energy by storing excess and offsetting consumption when you need it. They give you the opportunity to eliminate your utility bills rather than just reduce them.

We recommend checking with your utility company to see if net energy metering is available. If it is, then you’ll likely save more by avoiding batteries. If you don’t have access, then we suggest a battery to maximize your long-term savings.

Choose a High-Efficiency Panel Brand

Although Tennesseeans see around the average number of sunny days per year, we still recommend investing in high-efficiency solar panels. Brands with above-average energy efficiency ratings, like Maxeon panels, will cost more upfront, but they produce more power and offset more of your electric bills than lower-efficiency options.

Especially if you choose to install a battery in Tennessee, investing in high-efficiency solar panels will drastically increase your chances of eliminating your energy bills. Ultimately, your panels are likely to cost more upfront but should pay for themselves and save you more over time as well.

Take All of the Tennessee Solar Incentives You Can

One of the best ways to save on your solar conversion is to take advantage of as many solar incentive programs as you can. Solar benefit programs like tax credits and solar rebates are usually offered by federal and state governments, as well as individual municipalities and even utility companies.

All taxpayers in Tennessee have access to the federal solar tax credit, which can effectively bring down your installation prices by 30% and save an average of just over $11,500.

Tennessee as a state offers a sales tax exemption and a property tax exemption for solar equipment, which saves the average solar customer thousands. Many power companies and cities offer perks as well that can save you hundreds on your solar power system and add-on products. You can read our guide to solar incentives and rebates in Tennessee for more information on perks that might be available in your area.

What Are the Typical Costs of Tennessee’s Solar Installers?

The differences in pricing among the solar installers in Tennessee can swing your installation costs up or down by thousands of dollars in some cases. We’ll include some relative pricing and additional information about what we believe are the best solar companies in Tennessee in the chart below to help you decide which options might be right for your solar project.

How Are Solar Costs and Regulations Trending In Tennessee?

According to the Solar Energy Industries Association (SEIA), the cost of photovoltaic (PV) panels in Tennessee has dropped by 54% in the past decade alone. That means that the average solar energy system that costs $38,520 before incentives today would have totaled close to $75,000 ten years ago!

The drop in solar equipment pricing is largely due to advancements made in the manufacturing process, which have led to mass manufacturing capabilities and streamlined production. This is all thanks, in part, to the increase in popularity clean energy and solar, in particular, have seen over the past few years. We expect that manufacturing is going to continue getting more affordable and optimized, which means prices should continue to drop.

As far as incentives go, we don’t expect there to be any changes to policies in the near future. Tennessee currently does not have a renewable portfolio standard (RPS) goal, which is very often the impetus for new incentives to be established or existing ones to improve. Unless Tennessee sets an RPS goal, we think the incentives will stay stagnant.

With solar equipment prices lower than they’ve ever been and incentives not set to improve any time soon, there has never been a better time to go solar in Tennessee than right now. You can get started by getting some quotes from reputable installers in your area by using the tool below.

Read More About Going Solar

• Best Solar Installers in Tennessee
• How Much Can You Save With Solar Incentives in Tennessee?
• Is Tennessee Good for Solar Energy?

The cost information presented in this article is derived from a comprehensive analysis, incorporating data from multiple industry sources. The average cost per watt per state was calculated based on figures from Consumer Affairs, Energy Sage, and Berkeley Lab’s Electricity Markets & Policy Department. Additionally, monthly energy consumption and the average monthly cost of electricity were sourced from the U.S. Energy Information Administration, ensuring a well-rounded and accurate representation of the information presented.