Tennessee does not set the rules for your rooftop solar. The Tennessee Valley Authority does, and the state’s regulator has no jurisdiction over it. That single fact explains everything unusual about solar economics here: there is no state net metering statute, no state commission to appeal to, and a federal corporation posts the price your surplus earns every month. In September 2025 that price was $36.35 per megawatt-hour, about 3.6¢ per kilowatt-hour, against a retail rate of 13.48¢. You buy at thirteen and a half and sell at three and a half.
A Federal Corporation Sets Your Export Price
There is no Tennessee net metering law, and the Public Utility Commission lacks authority over TVA, so the usual state-level machinery simply is not there. Tennessee and South Dakota are the only two states in the country without a net-metering-style program. What TVA offers instead is Dispersed Power Production, a PURPA-based arrangement running on five-year agreements and reached through your local power company rather than directly.
What TVA pays | Rate | Notes on using it |
|---|---|---|
Flat 7×24 price, first 100 MW tier | $36.35/MWh, about 3.6¢/kWh | September 2025 schedule. Prices post monthly, so this moves. |
Time-block pricing range | $32.31 to $42.73/MWh, about 3.2¢ to 4.3¢ | Depends when you generate. The spread is small either way. |
What you pay to buy power back | Your local power company’s retail rate (13.48¢ statewide average) | Roughly four times what an exported kilowatt-hour earns. |
Green Power Providers | Closed | No new enrollment since 2019. Still advertised by some sellers. |
Because prices post monthly rather than being fixed in a tariff, the figure above is a recent reading and not a guarantee. Ask for the current schedule before you sign anything, and be skeptical of any quote presenting a Tennessee export rate as a settled long-term number.
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Quote against the current TVA schedule
Your Local Power Company Is the Third Party in the Room
Tennessee is served overwhelmingly by municipal utilities and cooperatives that buy from TVA and resell to you: Nashville Electric Service covers about 13% of households, Memphis about 12%, Middle Tennessee Electric about 10%, Knoxville Utilities Board about 6%. None of them is a household name outside its own service area, and each administers the TVA arrangement locally.
That matters for two reasons. Your agreement runs through your local power company, so their process, their timelines and their interconnection requirements govern how quickly you get switched on. And some local companies apply their own distributed generation fees or riders, authorized by TVA, which do not appear in any statewide summary. Two houses either side of a service boundary can face genuinely different economics.
The Biggest Systems and the Biggest Bills
Tennessee households are among the heaviest power users in the country, 1,154 kWh a month for an average bill of $155.56, so systems here are large. At $3.04 per watt (as of March 1, 2026), 37th cheapest, the typical install is 10.2 kW at about $31,008 gross, one of the largest typical systems in the country. Nashville-class sun gives a modest 1,358 kWh per kW, so that produces roughly 13,852 kWh a year.
The big-system market by size, gross at the benchmark; no federal residential credit applies to owner-purchased systems completed after 2025:
| System size | Gross cost at Tennessee’s $3.04/W |
|---|---|
| 6 kW | $18,240 |
| 8 kW | $24,320 |
| 10.2 kW, the typical Tennessee system | $31,008 |
| 12 kW | $36,480 |
| 14 kW | $42,560 |
Consumed as generated, that is worth about $1,867 a year at the 13.48¢ statewide average, a 16.6-year payback. Send a meaningful share to TVA at 3.6¢ instead and the figure deteriorates quickly, which is the whole design lesson here. Rates rise 2.7% a year, and the federal residential credit is $0 for owner-purchased systems whose installation is completed after December 31, 2025 under Public Law 119-21.
That model runs on the statewide average, which is ranking context. NES, MLGW, MTE, KUB and every other local power company charge their own residential rates, and two houses either side of a service boundary face genuinely different economics, so check your own bill before trusting any payback estimate.
Where This Stops Working in Tennessee
- Any quote mentioning net metering or Green Power Providers. Tennessee has no net metering, and Green Power Providers closed to new enrollment in 2019. Both are reliable signals that a seller is working from old material.
- Oversized arrays. At a four-to-one gap between what you pay and what you earn, every kilowatt-hour beyond your own use is close to a donation.
- Buyers who have not asked their local power company about DG fees. These are set locally, are not in any statewide table, and can change the arithmetic.
- Anyone treating the TVA rate as fixed. Prices post monthly. A five-year agreement signed against one month’s number carries real exposure.
Tennessee Solar Cost FAQs
No. There is no state net metering statute and the Public Utility Commission has no jurisdiction over the Tennessee Valley Authority, which sets the terms instead. Tennessee and South Dakota are the only two states in the country without a net-metering-style program.
Through the Dispersed Power Production program, the September 2025 schedule was $36.35 per megawatt-hour flat, about 3.6¢ per kilowatt-hour, with time-block pricing between $32.31 and $42.73 per megawatt-hour. Prices post monthly rather than being fixed in a tariff, so confirm the current figure before signing a five-year agreement.
About $3.04 per watt installed, 37th cheapest in the country as of March 1, 2026. Tennessee households are among the heaviest power users in the country at 1,154 kWh a month, so the typical system is large at 10.2 kW, roughly $31,008 before incentives.
About 16.6 years for a household consuming what it generates at the 13.48¢ retail rate. Exporting a meaningful share worsens that quickly, because TVA pays roughly a quarter of what you pay to buy power back. Self-consumption, not system size, is what moves the number here.
No. TVA closed the program to new enrollment after 2019, and any company still offering it is working from outdated material. The current route is Dispersed Power Production, arranged through your local power company on a five-year agreement.
The gap between buying and selling decides this one. Enter your ZIP code and we will size to what you actually use.
Size to what your house actually uses
Methodology: cost figures use the EcoGen Solar Cost Index for Tennessee, $3.04 per watt as of March 1, 2026, with payback modeled with no federal residential credit for owner-purchased systems, no net metering, rate escalation at the state 5-year average of 2.7%, 0.5% annual panel degradation, and a 25-year horizon. TVA Dispersed Power Production prices are quoted from the September 2025 schedule and post monthly, so they are a reading rather than a fixed rate.
References & Research Sources
EcoGen America reviewed TVA program materials, federal electricity price and utility datasets, Census home-value data, and federal tax guidance for this Tennessee solar cost guide. Sources were accessed between June 10 and August 17, 2026, unless another date is listed below.
- Tennessee Valley Authority (TVA). Dispersed Power Production Program. Export purchase arrangement and the September 2025 price schedule, with Green Power Providers closed to new enrollment after 2019. Accessed June 10, 2026.
- U.S. Energy Information Administration (EIA). Electric Power Monthly, Table 5.6.A. Average residential electricity prices by state, March 2026 edition. Accessed June 10, 2026.
- U.S. Energy Information Administration (EIA). Form EIA-861: Annual Electric Power Industry Report, 2024. Residential customer counts for Nashville Electric Service, Memphis Light Gas and Water, Middle Tennessee Electric, and Knoxville Utilities Board. Accessed June 10, 2026.
- U.S. Census Bureau. American Community Survey, 2024. Median home value data used for cost-to-value context. Accessed June 11, 2026.
- Internal Revenue Service (IRS). One, Big, Beautiful Bill Provisions. Guidance on Public Law 119-21, including termination of the Section 25D residential credit for systems whose installation is completed after December 31, 2025. Accessed August 15, 2026.
