Solar in Tennessee: cost, payback & incentives

Tennessee ranks #31 of 51 with a composite solar score of 25/100 (Limited). The score blends inputs from NREL and EIA: average irradiance of 4.9 kWh/m²/day, residential electricity at 11.5¢/kWh, a turnkey 6 kW installed cost of $16,500 ($2.75/W), and 2 tracked state and utility incentive programs.

On those inputs, a 6 kW array here is modeled to generate roughly 8,585 kWh/year and offset about $987 in annual utility spending at the state's average rate, an estimated 16.7-year simple payback (#40 of 51 for speed to break-even) and a projected +$8,175 net position over a 25-year horizon before utility-rate escalation. This figure values all production at the full retail rate; because Tennessee's net-metering policy is partial, exported (not self-consumed) generation is typically credited at a lower rate in practice, so the real payback for a grid-heavy export profile here will usually run longer than this estimate.

Policy matters as much as physics. Tennessee's net-metering framework is classified as partial, which governs how exported generation is credited, and its renewable portfolio standard is: None. The 2 active programs tracked in DSIRE include tax exemption and performance incentive types, each can stack to compress payback. Note that the 30% federal residential solar tax credit (§25D) ended for systems placed in service after December 31, 2025, so state and utility incentives now carry more of the economics, confirm current federal rules with the IRS and your tax advisor.