Solar in Tennessee: market, TVA Green Flex and net billing reality

Market snapshot

Solar in Tennessee by the numbers

Installed capacity

820 MW

Homes powered

115K

Solar share of electricity

2%

Solar jobs in state

2,200

Typical cost per watt

$2.75

US ranking

#46

Tennessee's residential solar market has grown more slowly since 2019 when TVA's Green Power Providers programme (which paid retail-plus for residential solar) closed to new enrollments. Current Green Flex programme compensation is substantially lower. Nashville, Memphis, Knoxville and Chattanooga metros dominate residential. TVA distributor utilities each handle local interconnection.

Rates and net metering

Electric rates and how solar export is credited

Incentives

State and local solar incentives in Tennessee

Beyond the 30 percent federal Residential Clean Energy Credit, which applies in every US state through 2032, Tennessee has these state and local programmes.

TVA Green Flex programme

TVA Green Flex pays residential solar installations a per-kWh credit for 20 years at a rate currently approximately $0.03 to $0.05 per kWh (varies by local distributor). The credit is below retail and substantially lower than the pre-2019 Green Power Providers rate. Confirm current rate with the specific local distributor utility before quoting.

No state solar tax credit (no state income tax)

Tennessee has no state income tax, so a state income tax credit is not applicable. The 30 percent federal Residential Clean Energy Credit remains the only tax-based incentive.

No statewide property-tax exemption

Tennessee does not have a statewide property-tax exemption for residential solar. The added value may be included in assessment at the county level.

No state sales-tax exemption

Tennessee does not currently offer a sales-tax exemption for residential solar equipment. The standard 7 percent state sales tax plus local additions applies (around 9.25 percent total in most Tennessee cities).

Permits and interconnection

Permits and interconnection

Permit timelines in Tennessee vary by jurisdiction. Nashville, Memphis, Knoxville and Chattanooga commonly take 2 to 5 weeks for residential. SolarAPP+ is in pilot in Nashville but not broadly deployed. Local distributor utility interconnection post-install typically runs 4 to 8 weeks.

Running a solar company here

Running a solar company in Tennessee

Running a solar company in Tennessee means working under TVA's Green Flex programme, where exports earn only partial retail. The best Tennessee operators size systems to self-consumption, understand the 153 TVA local distributor utilities' interconnection variations, and sell on long-term rate protection rather than fast payback. Lead costs run $85 to $160 on Google search.

Cities we cover

Solar in Tennessee metros

• Solar in Nashville
• Solar in Memphis
• Solar in Knoxville
• Solar in Chattanooga

Questions people ask

Solar in Tennessee: FAQ

Does Tennessee have net metering?

Not retail-rate. TVA's Green Flex programme (which replaced Green Power Providers in 2019) credits residential solar generation at approximately $0.03 to $0.05 per kWh for 20 years, below the retail rate of about $0.11. Pre-2019 Green Power Providers customers are grandfathered on the earlier higher-rate structure.

What is TVA Green Flex?

TVA Green Flex is the current TVA programme for residential solar installations, replacing Green Power Providers in 2019. Green Flex pays a per-kWh credit for 20 years at approximately $0.03 to $0.05 per kWh depending on local distributor utility. The credit is substantially lower than pre-2019 Green Power Providers payments.

How much does solar cost in Tennessee?

Residential solar in Tennessee averages around $2.75 per watt installed, meaning a typical 7 kW system costs about $19,300 gross. After the 30 percent federal tax credit, net cost is approximately $13,500. Tennessee has no state solar tax credit (no state income tax).

Is solar worth it in Tennessee?

For Tennessee homes with high electricity use and south-facing roofs sized to self-consumption, yes but with longer payback than retail-NEM states: typically 11 to 15 years with the federal tax credit. The Green Flex compensation is substantially less favourable than pre-2019 Green Power Providers.