For most Tennessee homes, solar does not pay back on a timeline that makes it a good money decision. Your power company cannot credit extra power at your full rate; TVA buys it instead at a low monthly price. Before incentives, a typical system takes 21.9 to 34.2 years to pay for itself, depending on your power company, close to or beyond the 25 years panels usually last.
Simple payback before incentives, by power company21.9 to 34.2 years
Memphis (MLGW), with or without a TVA contract23.0 or 34.2 years
Typical owned 9.11 kW Tennessee system at $28,970 cash (EcoGen Solar Cost Index, September 2026), from our per-utility payback figures of October 19, 2026. Each power company’s own 12-month price (EIA), 33.8% of output sent to the grid (the share sent to the grid as reported to EIA, not measured at the meter), and TVA’s October 2026 price of 3.112¢ for that power. These figures count no upkeep and no rise in power prices. See the math.
- Daytime use: the more solar power your home uses as it is made, the shorter the wait.
- Power company: NES, MLGW, a co-op or Kingsport Power. Each treats solar homes differently.
- Time in home: decades, not years. A move before payback leaves you behind.
2026 rules: new home systems get no 30% federal homeowner credit (IRS: not available for property installed after December 31, 2025). In TVA areas there is no net metering: extra power is sold to TVA at a price that changes every month.
How we checked this guide
Power company terms come from MLGW, NES and Kingsport Power documents, the TVA price from TVA’s October 2026 Dispersed Power Production Guidelines, tax rules from state agencies, and the electricity price from the U.S. Energy Information Administration. The example system is the EcoGen Solar Cost Index typical Tennessee home. Where we assumed a number, the page says so.
The writer and checker shown above are EcoGen staff. EcoGen is paid when homeowners request quotes, which is explained beside the quote form. Read our editorial standards.
The gap between what you pay and what TVA pays you
Tennessee has no state net metering law. Almost every home buys power from a local company, such as NES, MLGW or a co-op, supplied by the Tennessee Valley Authority (TVA), a federal power agency. Those companies do not credit your extra solar power at your full rate. TVA buys it instead, through its Dispersed Power Production program, at a price set in a letter each month.
In October 2026 TVA pays 3.112¢ per kWh (kilowatt-hour, the unit your bill counts), and the price resets every month. TVA pays it out monthly, so nothing is left over at year end. Tennessee homes paid an average of 13.56¢ per kWh from August 2025 to July 2026 (EIA). So a system pays back on the power you use yourself, and far more slowly on the power you sell.
Which Tennessee homes come closest to a fair payback?
It is a narrow yes for a few homes and a long wait for most. Read each row across.
Daytime use
Worth a closer look
Someone is home most days, with summer cooling or an EV charged in daylight.
Pause and check
The house is empty all day and most power is used after dark.
Check next: the share of solar power the quote assumes you use at home.
Your power company
Worth a closer look
Kingsport Power, where net metering lets extra power cancel your own use, for systems up to 10 kW.
Pause and check
MLGW, where a solar home pays $14.40 a month and extra power earns nothing on the bill.
Check next: the name on your bill and its written solar terms.
Export price
Worth a closer look
The quote uses this month’s TVA price letter, or the NES credit if you are in Nashville.
Pause and check
The quote credits exported power at your full rate, or uses an old TVA price.
Check next: the export price per kWh on the proposal, and the month it came from.
Price and size
Worth a closer look
A cash price near the Index’s $28,970 for 9.11 kW ($3.18 per watt), sized to what your home uses by day.
Pause and check
A large system sized to yearly use, so much of its power is sold cheaply.
Check next: the price per watt and the kWh you would export.
Reason to buy
Worth a closer look
You want backup power with a battery, or lower emissions, and accept a long wait.
Pause and check
You need the panels to pay back quickly.
Check next: the payback with and without a battery.
The Tennessee math, worked through
Simple payback is the years your savings take to cover what you paid: net cost divided by yearly savings. Here is the typical Tennessee home system, owned, in Memphis, selling the power it does not use to TVA.
- Cash price
- $28,970
- Confirmed incentives
- $0
- Year-one production
- 12,371 kWh
- Used at home / exported
- 66.2% / 33.8%
- MLGW price (EIA, 12 months)
- $0.13775/kWh
- Export credit (TVA, October 2026)
- $0.03112/kWh
- Upkeep counted
- $0/yr
- Used-at-home value
12,371 × 66.2% × $0.13775$1,128/yr - Export value
12,371 × 33.8% × $0.03112$130/yr - Yearly savings
$1,128 + $130$1,258/yr - Simple payback before incentives
$28,970 ÷ $1,258about 23.0 years
Inputs: the EcoGen Solar Cost Index typical Tennessee system (9.11 kW, $28,970 cash, September 2026; 1,358 kWh per kW a year, so about 12,371 kWh in year one). No rebate or credit to subtract. 33.8% is the share sent to the grid as reported to EIA, not measured at the meter; MLGW cites about 60% used at home for an average solar home. Home use is valued at MLGW’s 13.775¢ EIA 12-month price. Power sold to TVA earns 3.112¢, TVA’s October 2026 price, which resets every month. This case counts no MLGW monthly charge. These figures count no upkeep and no rise in power prices.
Now take the same Memphis home without a TVA contract. Its extra power then earns nothing, and MLGW bills homes that make their own power $14.40 a month ($172.80 a year).
| Scenario | Used at home | Savings before MLGW charge | Yearly savings | Simple payback |
|---|---|---|---|---|
| With a TVA contract | 66.2% | $1,258 | $1,258 | about 23.0 years |
| MLGW only, no TVA contract | 66.2% | $1,019 | $846 | about 34.2 years |
The MLGW-only case values home use at 12.443¢, MLGW’s 12-month price less its $15.10 a month in fixed charges: 12,371 × 66.2% × $0.12443 = $1,019. Less the $172.80 charge, that is $846 a year, and $28,970 ÷ $846 = 34.2 years.
Other power companies, same system, simple payback before incentives (our per-utility figures, October 19, 2026):
| Power company | Extra power earns | Simple payback |
|---|---|---|
| Kingsport Power | Net metering, kWh for kWh | 21.9 years |
| Knoxville Utilities Board, with a TVA contract | 3.112¢ from TVA | 22.3 years |
| Middle Tennessee Electric, with a TVA contract | 3.112¢ from TVA | 24.9 years |
| Other TVA power companies we model, with a TVA contract | 3.112¢ from TVA | 22.2 to 26.1 years |
| Middle Tennessee Electric, no TVA contract | Nothing | 32.4 years |
Kingsport Power nets all 12,371 kWh at 10.717¢, its 12.030¢ price less the $16.43 monthly service charge: $1,326 a year. We do not print a Nashville (NES) figure yet, while we check its credit against the NESolar Savings rules.
What would shorten the wait: more daytime use, a cash price below $3.18 per watt, a higher TVA price, or a battery that turns sold power into evening use, at extra cost.
Run your own Tennessee numbers
The tool starts with the Memphis case above, with a TVA contract and no upkeep. Enter your quote’s numbers and the share you expect to use at home, then press Calculate. In Memphis without a TVA contract, set the export credit to 0 and add MLGW’s $172.80 a year charge to owner costs. Nothing you enter is sent anywhere.
Example result
about 23.0 years
simple payback before incentives
- Used-at-home value
- $1,128/yr
- Export value
- $130/yr
- Owner costs
- $0/yr
- Yearly savings
- $1,258/yr
- Net cost
- $28,970
Starts with the Memphis case above. Flat first-year values with no upkeep and no rise in power prices; TVA’s price changes every month.
Sold, not credited: where your extra power goes
The home share saves your full rate. The grid share earns only what TVA or your power company pays, and that depends on the name on your bill.
Used at home: 8,191 kWh. Each one replaces power you would have bought, so it saves the full variable rate ($0.13775 at MLGW here).
Sent to the grid: 4,180 kWh, the share sent to the grid as reported to EIA, not measured at the meter. These earn whatever is paid for exports ($0.03112 from TVA here). That can be far less.
- Most TVA power companies: a five-year contract with TVA, paid each month by direct deposit at that month’s price (3.112 cents per kWh in October 2026), so nothing is left over at year end.
- Nashville Electric Service (NES): NESolar Savings credits your bill 3.069 cents per kWh in summer and 3.197 cents to 3.244 cents in other months, plus a fuel amount, until its 10 megawatts limit fills.
- Memphis Light, Gas and Water (MLGW): no bill credit for extra power; only a TVA contract pays for it.
- Kingsport Power: net metering, where each kWh sent out cancels one bought, for home systems up to 10 kW.
MLGW says the average home uses about 60% of its solar power at the moment the panels make it. Your own hourly use data is the best guide. Ask for the current TVA letter too: one co-op page still says TVA pays “usually around 1.8 cents per kWh”.
Get quotes built on your own use
A Tennessee quote should show how much power you would use and how much you would sell, at this month’s TVA price. Ask for both numbers.
Solar providers that serve your area may contact you, and they pay EcoGen for the introduction. How we make money.
What to leave out of a Tennessee payback, and what to count
Leave out the federal credit. The 30% homeowner credit is not available for systems installed after December 31, 2025. A quote that still subtracts it is out of date.
Leave out TVA Green Connect. It links homeowners with TVA-approved installers and checks the finished system. It pays you nothing.
Count the sales tax exemption, if you claim it. Certified equipment that makes or stores power is exempt from 100% of Tennessee sales tax. The state rate alone is 7%, which is $700 on every $10,000 of equipment. It needs a state certificate (Form CN-1386), so ask who files it.
Ask about property tax. State law caps the first appraised value of certified solar property at 12.5% of its cost. Ask your county assessor if that applies to a home.
Six things a Tennessee proposal must spell out
If a quote cannot show these, its payback number is a guess.
- Use at home vs sold. The kWh the quote expects you to use and to export, and the share it assumes.
- Export price and month. This month’s TVA price letter, or the NES credit, not your full rate.
- Your power company’s terms. Monthly charges, meters, fees and the order of applications.
- Sales tax. Sales tax as its own line, and who files Form CN-1386 for the exemption.
- Cash and financed prices. Both totals, with any dealer fee shown.
- No 30% federal credit. For panels you buy, the homeowner credit ended for systems installed after December 31, 2025.
Compare Tennessee solar quotes
Ask each installer to show what you would use, what you would sell to TVA, and the price assumed for each. Enter your ZIP code to request quotes from solar providers that serve your area.
How EcoGen is paid
EcoGen America does not sell or install solar. When you request quotes, we pass your request to solar providers serving your area, and they pay us for the introduction. Providers can include installers, solar marketplaces and lead exchanges, and more than one may contact you. You never pay us. This is not an application to TVA’s Dispersed Power Production program.
More Tennessee solar guides
- Tennessee solar guide: utilities, incentives and installers in one place
- Tennessee solar companies: compare local installers before you request quotes
- Tennessee solar incentives: what TVA pays and the sales tax exemption
- What solar costs in Tennessee
- Free solar panels in Tennessee: what zero-down offers really cost
- Are solar panels worth it? The national guide and payback calculator
All 51 state guides
Tennessee solar questions
Are solar panels worth it in Tennessee?
For most homes, not as a money decision. Before incentives, a typical owned system takes 21.9 to 34.2 years to pay back, depending on your power company: 21.9 years at Kingsport Power, 22.2 to 26.1 years with a TVA contract at the TVA power companies we model, and 32.4 to 34.2 years without one. Extra power sells to TVA at a low monthly price, so homes that use their own solar power do best.
Does Tennessee have net metering?
Not in most of the state. Net metering means each kWh you send out cancels one kWh you buy. Power companies supplied by TVA do not offer it; TVA buys extra power at a price it resets every month. Kingsport Power is the exception, with net metering for home systems up to 10 kW.
Why is rooftop solar a hard sell in Tennessee?
Three things stack up. There is no state rebate and no state income tax credit. The federal homeowner credit ended for systems installed after December 31, 2025. And power you do not use at home sells for a few cents per kWh, far below the 13.56¢ average Tennessee homes pay.
Does TVA Green Connect pay Tennessee homeowners?
No. Green Connect links homeowners with TVA-approved installers and checks that the system meets TVA standards. It is a quality program, not a payment, so it adds nothing to your payback. If a proposal counts it as savings, ask which dollar figure it adds. Selling extra power is a separate TVA contract.
Would a battery make solar worth it in Tennessee?
A battery can store midday power that would sell for a few cents and use it in the evening, when it saves your full rate. That helps more here than in net metering states. It also adds a lot of cost, so ask for the payback with and without the battery, built on your own use.
Does it matter whether I am in Memphis or Nashville?
Yes. MLGW charges solar homes $14.40 a month. A Memphis home without a TVA contract pays back in about 34.2 years in our figures, against 23.0 years with one. NES runs its own buyback, NESolar Savings, at 3.069 cents per kWh in summer plus a fuel amount, until its 10 megawatts limit fills. Ask your power company for its terms in writing.
Sources, method and corrections
The example uses the EcoGen Solar Cost Index typical Tennessee system (September 2026) and our per-utility payback figures of October 19, 2026: each power company’s EIA 12-month price, 33.8% of output sent to the grid (the share sent to the grid as reported to EIA, not measured at the meter), TVA’s October 2026 price of 3.112¢, and the power company’s own charges. These figures count no upkeep and no rise in power prices. Simple payback uses flat first-year values. The calculator runs in your browser and sends nothing.
Spotted an error? Tell us through our corrections and feedback process.
- TVA: Dispersed Power Production Guidelines, October 2026 (Attachment A: 3.112¢ per kWh, effective October 1, 2026; the price resets monthly)
- Memphis Light, Gas and Water: solar options (solar home charge, 60% average home use)
- Nashville Electric Service: NESolar Connect and NESolar Savings guidelines (buyback rates and limit)
- Kingsport Power: Tariff N.M.S., Tennessee Public Utility Commission Docket 21-00107 (net metering)
- Kingsport Power: Tennessee tariff book, compiled November 1, 2025 (Tariff N.M.S. and the $16.43 monthly service charge, read October 19, 2026)
- Tennessee Department of Revenue: Sales and Use Tax Manual, August 2026 (equipment exemption)
- Tennessee Department of Environment and Conservation: Form CN-1386 (certificate application)
- Tennessee Comptroller: 2026 solar property instructions (valuation limit)
- TVA Green Connect FAQs (posted by a local power company) (what Green Connect is)
- U.S. EIA: average residential electricity price by state (12-month average, August 2025 to July 2026)
- IRS: Residential Clean Energy Credit (ended after 2025)
- EcoGen Solar Cost Index, September 2026: what solar costs in Tennessee (typical system and price)
