Tennessee Solar Incentives: Lower Cost of Solar Panels in TN Tax Credits, Grants

Georgette Kilgore headshot, wearing 8 Billion Trees shirt with forest in the background.Written by Georgette Kilgore

Solar Panels | March 18, 2024

Man collecting cash from Tennessee solar incentives that reduce cost of solar panels in Tennessee with solar tax credit, solar energy programs, solar panels for home, and solar Tennessee programs.

Thanks to a variety of Tennessee solar incentives, residents and businesses in the state can reduce their cost of solar panels in Tennessee.

There are plenty of reasons why Tennesseans are opting out of grid electricity, and to enable cleaner options, federal solar investment tax credit options and various programs are available to help.

While the upfront cost of solar panels in Tennessee may seem steep, you can reduce those amounts.

This guide explains how Tennessee solar incentives can help homeowners install solar energy systems that reduce the increasing drains on the grid.

State of Solar Tennessee: Daily Peak Sun Hours

Apart from the wonders of national parks and the historical significance of major cities, Tennessee is also slowly growing when it comes to solar power. Honestly, not as fast as other states, but progress is being made every single day, and the Tennessee solar incentives are a testament.

In comparison to other regions, Tennessee comes in at number 34 in matters of conversion to solar power.

This is understandable because Tennesseans pay very lower energy bills, and given that the main reason for the switch is the bid to offset the electricity costs, this becomes one of the hurdles that the solar market has to face.

Perhaps many are left wondering whether it is a worthy investment, considering the cost of solar panels in Tennessee. Another aspect challenging the adoption of solar in the state is the fact that there is no Renewable Portfolio Standard, the force that pushes utility companies to do whatever it takes to increase the amount of solar they generate.9

There is a ray of hope in this case, though. The state has a lot of potential to become a champion for solar power, and the market can easily grow.

Why? Two main reasons.

It is cheaper to buy panels there, and number two it is regarded as one of the sunniest states.

Map of the state of Tennessee with each county colored to show the daily peak sun hours in each Tennessee county ranging from 4.31 to 4.6 daily hours of sunlight.

Tennessee enjoys about 207 sunny days in a year. To put it more in perspective, remember that the national average is 205, making it a great place to set up panels.

Consider Memphis with 214 sunny days, Chattanooga with 210, and Nashville with 208; there is no doubt that the sun will not be a problem when you install your panels.

If the state’s energy profile is anything to go by,13 Tennessee has quite the potential to have a booming solar market.

Solar Farms in Tennessee

Tennessee has already installed more than 900 MW of solar power to date, and so far, more than 93 000 homes are fully running on solar panels.

The state has invested an incredible $1.2 billion in the industry, and the best part is that the cost of solar panels in Tennessee has dropped by about 54% over the last decade.

That’s not all; the solar market has led to the creation of around 4,100 jobs.

All this wouldn’t be possible without the solar farms in Tennessee, which have been of great help to the residents.

Map showing locations of solar plants in Tennessee using yellow markers and Tennessee solar panels with a US cut out showing the location of the state of Tennessee.

Getting down to the numbers, the Millington Solar Farm is one of the most notable establishments in the state with 70 MW, a product of the Silicon Ranch. It came to life in the year 2018, and interestingly, it is able to power over 7,200 homes in the state.

The Elora Solar completed in 2022 by NextEra in Elora blows Millington out of the water, all thanks to its 191 MW capacity. So astonishing is it that in its full potential, it can power almost 20,000 homes.

What about Meta, from Volkswagen, based in Chattanooga? This 10 MW plant is the most massive on-site corporate solar farm in Tennessee.

It is these plants that show just how much Tennessee is capable of when it comes to solar power.

Coupling this high capacity with the attractive Tennessee solar incentives, the solar market will only keep growing, no doubt.

How Much Are Solar Panels in Tennessee: Cost of Solar Panels in Tennessee

Are you a homeowner contemplating finally making the switch to solar power? Then you are at the right place because Tennessee has some of the best prices in the country.

It is one of the first questions to ask because your budget is everything right now, such that if you cannot afford it, it becomes way easier to find alternative funding because you will know how much more you need.

Solar panels on the roof diligently absorbing a limited amount of sunlight amidst cloudy conditions.

(Image: Infrogmation of New Orleans24)

Good news for you because the cost of solar panels in Tennessee right now stands at $2.49 for every watt. If you follow the solar market trends, you will know that the average rate at the national level is $2.66 for each watt.

It is plain to see that you will find the panels more affordable in Tennessee than in many other states.

To give you a clearer picture, you are likely to pay about $22,400, which is for a 9 kW system, and $29,800 for a 12 kW option if you have more energy needs.5

Since most homeowners go for 9-12 kW capacity versions, you can pay anything in between that range. Please remember that this is minus any tax credits or rebates: this is what you need when paying in cash.

Any expert will tell you that you can easily pay less for your solar panels, and many first-timers realize this.

When you get down to it and find cheaper (but still very effective products) and adjust the system’s capacity, you will actually end up paying less than you expected, and you can imagine how low that can go when coupled with Tennessee solar incentives.

How Does Solar Panel Cost Calculator Tennessee Work?

The above price range is a rough estimate, and as you are yet to see, there are several reasons why the price would reduce, or in special cases, increase. If you are looking for a closer estimate or a way to find out how much you should be spending on your particular installation, perhaps consider the solar calculator.

This is the closest you can come before getting quotations from companies.

Basically, the software works by obtaining specifics about your home and its energy needs, then making the necessary calculations to determine how much solar power you should be generating in the first place and how many solar panels will do that job for you.

Consecutively, it will give you a breakdown of how much the entire system will likely cost you.

When using this tool online, also note that it is purely based on estimates. It cannot be the exact figure that you will know when you get down to the project itself.

What it does is give you a basis for comparison, a range that you are supposed to work with, to give you a sense of how much money you should have in case of anything.

What Factors Affect the Cost of Solar Panels Tennessee

You and probably every other new solar system installer is asking one question, why are solar panels so expensive?

A graphic image illustrating the key factors influencing the cost of solar panel installation in Tennessee.

The price can be overwhelming, definitely, but given the solar market trends, you will understand that the current rates are great bargains, especially considering that the costs were way higher a decade ago, over 50% more.

A lot has changed in the industry, but the following factors remain the same when it comes to deciding how much your solar panels should cost.

The Equipment

One of the most obvious factors to consider is the type of equipment you go for. The particular equipment version matters a lot when it comes to the pricing because you have to buy them first before you can start thinking about the installation.

The good news, living in Tennessee means that you don’t really need the very efficient panels or the most expensive ones in the market.

Why? With 207 sunny days, there is no need for the panels to work extra hard to harness the sun’s rays.

But this is not to say that you go for low-quality equipment because you already know that Tennessee also has issues with extreme weather sometimes.

Therefore, you need very durable systems that can withstand anything. You will notice the more durable the brand, the more expensive it will be.

Your Financing Method

Not many are aware of this, but how you pay for your panels has a lot to do with how much you can save and how much you will actually pay for the system.

Take, for instance, cash payment. It is simple and straightforward, has no interest rate attached, and you can be able to make savings right from day one.

However, given the magnitude of the project, many homeowners are forced to seek alternative financing, like solar loans.

The most common ones that many go for are the Tennessee Department of Environment and Conservation (Clean Energy Financing) for residential installations and the Rural Energy for America Program (REAP) for businesses.14

Screenshot of Clean Energy Financing information provided by Department of Environment & Conservation website.

(Image: Department of Environment & Conservation25)

If you take a closer look, you will realize that solar loans have more long-term charges, meaning that your system will cost you more down the line and increase the time that it takes for it to pay for itself.

The Size of the Installation

Another crucial factor to address is your energy needs, which go hand in hand with the size of the installation. If you are new to this, you should probably know that if you have high energy needs, you will have to go for a larger installation, say, 12 kW and up.

If you check your previous monthly bills and they are all high, the company will definitely recommend more panels and a generally bigger system that can comfortably handle all your energy needs.

Bad news. It will cost you more to go big.

Small households are in luck here because they can survive with smaller solar systems and pay less for them.

The Solar Company

Tennessee is one state whose solar market is on the rise, and it shows by the presence of so many solar companies. Every supplier has a set price for the equipment and the installation services, and it is up to you to find out which one.

Two individuals engaged in the installation of solar panels on a rooftop.

(Image: brian kusler26)

Doing this will help you determine how to make more savings because some usually upcharge for their products, while some are fair.

No, it doesn’t mean going for the cheapest in the market. Not necessarily.

In a bid to reduce the cost, also remember that the system should also be of high quality, which means that the cost should also reflect that. Thorough research helps a lot here to know which company has the most efficient products and at the lowest costs.

What To Consider Before Installing Solar Panels for Home in Tennessee

One thing you should know about solar installation is that everything depends on the site.

You will find out that some homes are more suitable for the system than others, and there are several ways to know whether you are making the right decision or not.

Before you kick-off the journey to becoming a solar power owner, you might want to take a few pointers first.

The Condition of Your Roof

Traditionally, solar panels go on the roofs of houses. Not only is it the most convenient way to go, but it is also the cheapest, with no need for extra equipment for ground mounting and the like.

Solar panels installed on a roof, actively absorbing sunlight.

(Image: Solar Trade Association27)

So why does it matter anyway? It is everything.

If you have had your house for a long time and it shows on the roof, it may call for renovations first before any installation.2

Aged and damaged sheets will just not do because they will otherwise crumble under the sheer weight of the panels. To be on the safe side, and the contractors will tell you this, you will have to factor in roof replacement costs.15

Your House Location

Did you know that where you live also has a role to play when it comes to deciding whether to go solar or not? You have to consider the weather first and foremost.

You are lucky if you live in Tennessee because it has more sunny days than the average of all USA, at 207. It also boasts about 4.1-4.5 sunlight hours every day which is not bad for the panels.

You can also check that your house isn’t shaded by neighboring trees or massive buildings that would shadow your panels and reduce their performance. If that is the case, you will have to do away with roof racking and instead go for ground mounting, which is more expensive.

Your Insurance

Another crucial factor that you should look into is your homeowner’s insurance. Since you are contemplating one of the most crucial house renovation projects, you may want to check whether it is covered by your insurance.

Anything can happen, and it is important to know that your expensive panels are safe. If your insurance doesn’t cover it, perhaps it may be the right time to add the panels to the policy.

The Payback Period of the Panels

Like any other investment, you want to look at the ROI of your panels. It is not worth the hassle if you feel that it will only lead to losses or won’t save you as much money.

Thankfully, this is almost never the case with solar panels. It is a sound investment no matter where you live in the US because the truth is that the energy costs are only going up, and you better have a safety net for when the rates become excessively high.

On average, a Tennessean will have the money back in less than 13 years, which is right on the national payback average time frame of 12 years.

Benefits of Going Solar in Tennessee

The low ranking of Tennessee when it comes to solar power adoption may make you wonder, what are the pros and cons of solar energy in the state, and is it even worth it?

Truth be told, Tennessee may not have the best solar market out there, but remember that it is better than more than 10 other states.

Solar panels installed on the rooftop of an apartment building, basking in the abundant sunlight against a backdrop of a clear blue sky.

(Image: mjmonty28)

Besides, this doesn’t take away from the fact that there are several benefits of converting to solar in Tennessee.

It Is the Best Way To Reduce Energy Bills

Ask anyone why they opted for solar power, and they will start by saying that they wanted to get rid of high utility bills.

Buying solar panels, and in cash for that matter, means that you can start saving from the get-go because you will no longer pay for energy bills from the grid ever again.

For a better perspective, look at it this way, if you spend about $125 on utility bills, going for solar power and buying batteries as a backup means that you may end up saving more than $1,500 every single year.

Not only will this offset your total installation cost by the end of it all, but it could also mean saving more than $20,000 all through the service of your panels.

Your Home’s Value Increases

Another bit of great news for Tennesseans is that installing solar power helps increase their home value, and the numbers can be anything upwards of 4.1%.

This is welcome news because you are sure to get more for your house, in case you want to resell any time later on.

Solar panels installed on the roof effectively capturing direct sunlight.

(Image: U.S. Dept. of Housing and Urban Development (HUD)29)

If you were wondering does solar increase home value, the real estate market trends will clearly show it, which explains why solar-powered homes are generally more expensive.

The rate can even go higher if you are living in high-cost cities like Memphis, Nashville, and Knoxville.

It Is Your Best Shot at Cleaner Energy

Any eco-conscious Tennessean will know that the energy source is the highest contributor to the rate of carbon footprint in any household. If you want the cleanest and most eco-friendly way to power your home, think solar panels.11

The carbon footprint of solar panels is way lower than that of fossil fuels and is the best way to reduce the rate of pollution.

What about the old panels, you ask? Aren’t they toxic wastes?

You don’t have to worry about what happens to your old panels because there are several recycling drop-off spots in your city where your solar panel recycling takes place in the safest way possible to reduce their impact on the environment.

Tennessee Solar Incentives for Residents

Tennessee may have a lot of room for improvement when it comes to solar incentives for its residents, but still, there are quite a number of programs that are aimed at improving the rate of conversion to solar power.

When you look at the price tag of solar panels, you will understand why and how every penny counts if it means that you will save something at the end of the day.

All Tennesseans should know that the following solar incentives are at their disposal.

The Federal Solar Tax Credit

Although this is not exclusively a Tennessee solar incentive, people who have installed solar power will attest that it is one of the most lucrative programs that you can go for.

It is present in all 50 states, and anyone in the country can apply for it as long as they are a tax-paying citizen. It is one of the most famous incentives that you may have heard of and has been long-running in the country, but the question is, how does it work?

Nothing too complicated about it, but basically, it helps you offset up to 30% of the total cost of your solar panel installation.

Thanks to the Inflation Reduction Act that saw it extended all the way to 2032,16 you can now get a massive discount on your panels, which explains why it is one of the most highly sought-after incentives in Tennessee, no, in the entire country.

If you pay taxes, you have a certain amount that you owe the government every year. This is how the system works.

When you calculate 30% of the total amount it costs you to buy the panels, the figure knocks off the amount that you are supposed to pay in the form of taxes.

If you pay, say, $29,000 for the system’s installation, the federal solar tax credit could see you save more than $8,000, which is a pretty huge number.

Green Energy Property Tax Assessment

You must be familiar with the property taxes; you pay them every year to your state. You must also know that it is usually dependent on your property’s value, such that the more valuable your home is, the more property taxes you are expected to pay.

Therefore, it goes without saying that if you carry out any renovation that increases your property’s value, you should expect to pay more in terms of taxes.

Well, solar panel installation is a form of home improvement as you saw earlier. A kind of renovation that sees your property value rise by as much as 4.1% or more.

Ideally, installing the panels should mean that the property taxes will increase significantly, but that is not the case in Tennessee. All thanks to the Green Energy Property Tax Assessment, the system is seen to add only 12.5% of the initial amount you used in installation.4

Using numbers will give you a clearer picture. For example, if you spent $20,000 for the project, Tennessee will consider it as a $2,500 value addition on your property, not the actual $20,000.

As a result, the increase in your property taxes will only factor in the $2,500 extra instead of $20,000, which is quite a lot of money saved if you think about it.

Net Metering

Those living in other states will attest to how net metering is an excellent way for you to save on energy costs.

If you are coming across it for the first time, NEM (Net Energy Metering) refers to a policy by the state government that allows you to provide the extra electricity from your panels to your local grid and, in turn, receive credits that you can use to offset your utility bills.

There is no need to let the excess power go to waste when you can “sell” them to a utility company. NEM has a special way of reducing how long the panels take to pay themselves off and increasing the amount of energy that you save in the long run.

On to some bad news, the TCU (Tennessee Public Utilities Commission) doesn’t obligate utility companies to offer net metering.

Only the TVA (Tennessee Valley Authority) offers a sort of NEM to its customers through the Green Power Providers Program.17 Here, you are able to “sell” your excess power at a smaller cost and, while at it, save more than $10 000, although it could be more based on the size of the system you have got and what you usually spend on utility bills.

Local Tennessee Solar Incentives

For the lucky residents living in certain cities and who are customers of particular utility companies, you can be able to make use of a few local incentives available.

You can always ask your solar company about such programs and do thorough research to see whether it is possible to save given your particular city.

  1. Knoxville EV Charging Station Rebates: If you are a loyal customer of the utility company, you can take advantage of its $400 rebates program which is a reward after installing a level-2 Electric Vehicle charger in your household.
  2. EMC Heat Pump Loan: If you are a customer of the Middle Tennessee Electric Membership Corporation, you will appreciate the fact that the company provides solar financing if you want to install heat pumps. It is quite an affordable loan that has the interest capped at only 10% and gives you as much as $2,000 to $15,000, and you are allowed to pay up for as long as ten years.8
  3. BTES Energy Savings Loan: The Bristol Tennessee Electric Service utility company offers its customers pretty affordable loans that go up to $10,000. You are able to use this incentive for anything solar power, including buying heat pumps and energy-efficient doors and windows.
  4. Chattanooga’s Energy Efficient Program for New Homes: This rebate facility is available for all those construction energy-efficient homes in Chattanooga and its environs. These rebates can go to $3,000, which is also a way to save on your solar installation costs.

Is There a Tennessee Solar Tax Credit

Tennessee has made a lot of progress in matters of the adoption of solar power, but there is still more that can be done. One thing that hinders the improvement of the solar market is the lack of state-wide solar incentives.

The only such thing available is the Federal ITC which gives new panel owners a 30% discount on their total installation cost.

Tennessee as a state is yet to follow suit like other regions have. Imagine how much you could be able to save by combining federal and state solar incentives.

Much has not been said about any plans to implement it in the near future, so, for now, residents will have to make do with the ITC, property tax exemption, and the local rebate programs.

How Tennessee Solar Program Help Reduce the Cost of Solar Panels in Tennessee

If you have seen the cost of panels in Tennessee, or in fact in any other place, you will appreciate how much incentives give you as a homeowner a massive boost.18

The aim is to save as much as you can.

Solar panels installed on the ground, tilted towards the sun, efficiently absorbing direct sunlight.

(Image: DOE photo Lynn Freeny30)

That is why you should apply for as many rebate programs as possible because combining more than one saves you more money.

States know that the prospect of reduced costs is instrumental in getting more and more people on board with the idea, which explains why most of them have very favorable policies.

The truth is that Tennessee has not done all that it takes to convince more of its residents to make the shift, and the lack of RPS only makes it worse.

The only silver lining is that the cost of the panels in the state is lower than that in other regions, and there are no issues with insufficient sunny days.

But still, the 30% from ITC is quite attractive, and you can also use local solar loans and rebates to reduce the total cost.1

Is Net Metering Among the Tennessee Solar Incentives

Net metering is supposed to be one of the most appealing solar incentives that any state has to offer. You can imagine how much it would allow you to save in terms of reduced utility bills.

RPS exists for a reason in several states, and utilities have no choice but to comply, and the best way to increase the amount of power they generate is by buying it from their customers.

Unfortunately, lacking RPS goals means that the utilities in Tennessee are not legally required to provide NEM.

Otherwise, if they were mandated by the state to increase their renewable energy production, not meeting their quotas would mean hefty fines, something companies would rather avoid.

This is why Tennessee net metering is almost non-existent if not for a similar program offered by TVA.

NEM has always been a popular incentive for many homeowners, but unfortunately, it is not that attractive for Tennesseans. There are no competitive rates, and the numbers only keep dropping.

However, you may be in luck to find out that your local utility company offers NEM at a great price. You can always ask your provider whether the service is available and, if so, what are the rates.

How Does Federal Solar Tax Credit Tennessee Work?

The federal energy credits couldn’t have come at a better time than this when some states are not offering as many solar incentives.

The residents see the Federal Solar Tax Credit as the biggest boost in the process of their conversion to solar energy and apply for it first before considering any other program.19 It is like a dream for Tennesseans because there is neither a state solar tax credit nor Renewable Portfolio Standards to promote net metering and other more substantial incentives.

So, how does it all work?

You first have to complete the project, either in cash or with loan financing, and when done, calculate 30% of the total installation cost. This figure will be credited to the amount of money you owe in the form of taxes for the next tax season.

If you don’t owe the same amount in that year, the balance easily rolls over to the next year, and it can do the same for the next five years until the total cost is covered.

There are a few rules to adhere to when applying for the ITC.

For starters, you can only apply for it after you have already completed the project. And number two, if you are asking how does the solar tax credit work if I don’t owe taxes, the answer is that it doesn’t.

It is specifically for the taxpayers, targeting a reduction in their tax liability. Simply put, if you don’t have a tax liability or don’t owe the government any taxes, you cannot receive the federal solar tax credit, not even apply for it.12

What Are the Best Tennessee Solar Rebates

The goal when it comes to installing solar power is to reduce the cost as much as possible. It may be by comparing several solar companies to find the best equipment prices or applying for as many Tennessee solar incentives as possible, and both have proven to work effectively in lowering the ultimate cost of the project.

In this case, you want to know which incentives in the state will guarantee the most savings so that you can pay slightly more attention to them.

Based on what you discovered so far, no other program does as much as the federal solar tax credit does. You can never get an institution willing to slash 30% off your installation cost, and this is a five-figure amount in question.

It is one of the most lucrative in the state and even in the entire country. Applying for it is also just a matter of minutes and is readily available to all Tennesseeans as long as they are tax-paying citizens.

Another incentive that is quite hard to dismiss is the property tax exemption.

It may not seem as impactful at first, but when you think about it and do the math, you will realize that it saves you a lot of money in the long run.

You will avoid paying a fortune that you would have been paying had the panels increased your property value by the full amount instead of the 12.5%.

Impact of Government Solar Programs on Conversion To Renewable Energy

It is undeniable that the government, both national and at the state level, have a massive role to play when it comes to the solar market.

If you take a closer look at the top five ranked states with the highest conversion rates to renewable energy you will realize that they enjoy several solar rebates from the government,20 which explains why more residents are willing to invest in panels, regardless of how much they cost.

One of the most impactful and most crucial government policies is the Renewable Portfolio Standards. Any state with a strong RPS is always ahead of others in matters of solar power ranking and conversion rates.

Utility companies just have to comply or face a heavy penalty. As a result, net metering rates improve as more homeowners are willing to install panels to tap into that incentive.

The government’s tax credits, grants, and subsidies also go a very long way to reduce the cost of acquiring panels, which attracts more new buyers. Note that the same way that government intervention promotes solar power is the same way that it can deter it.

Say, for instance, if the sales tax on solar equipment increases, it will increase the purchasing cost of the panels and discourage prospective buyers.

Tennessee Renewable Portfolios Standards vs Tennessee Solar Incentives

Tennessee has been making massive strides to improve the rate of conversion to solar power, and it is easy to tell from the property tax exemption and solar loans and rebates at the local level.

It is certainly a great idea for the state to improve its policies to promote the conversion rate.

Pie chart showing Tennessee renewable energy consumption including Tennessee wind energy, biomass energy, geothermal energy, hydroelectric energy and solar energy in the state of Tennessee for 2022.

TVA, the leading utility provider in the region, certainly knows that and has played its part for over 80 years now.

It is not to blame when it comes to the issues that make Tennessee lag behind in the bottom 20 solar ranking list. It is the legislation that is to blame because the state is yet to implement the RPS, a policy that has proven successful for many regions.

This law would otherwise require utility companies to rely on renewable energy sources at a certain percentage, and failure to which could lead to dire consequences.10

The lack of RPS is probably the main reason why there are not as many lucrative Tennessee solar incentives apart from the federal solar tax credit.

Trust that if the rules were more strict, net metering in Tennessee would be more favorable, and more residents would find solar worth investing in.

Utility providers would also have to come up with more attractive programs to convince prospective panel buyers because where else would they outsource their solar power if not from their own customers?

What Are the Available Grants for Solar Panels in Tennessee?

In the general sense, there are no solar panel grants for residential setups in Tennessee, but there is one famous grant available for commercial purposes.

The only programs that you can access as a homeowner in Tennessee include the ITC, property tax exemption, rebates from local companies, and solar loans from state and national institutions.

On the positive side, if you are engaged in any agricultural business, or in other words, own a farm in a rural setting, you could qualify for REAP (Rural Energy for America Program),21 which is the brainchild of the United States Department of Agriculture.

This service targets growing rural businesses, helping them access solar power to conduct their day-to-day operations.

Not only does REAP help finance loans for solar installation, but it also offers grants for agricultural producers.6

It is a win-win for the government and the business owners because access to solar power improves the productivity of the agricultural sector, which benefits both parties.

How To Choose the Best Solar Panel Installation Company in Tennessee

When looking for solar panels, you will be fascinated by just how many solar companies have set bases in the state.

Regardless of all the challenges, the solar market in Tennessee is still very promising, and the best solar companies can see that. That is why it becomes quite a challenge when deciding which one to go for.

If you are a first-timer, you may want to bear the following tips in mind.

  • Assess the Customer Service: Installing solar panels is all about the service, and it is easy to choose if the reviews are glowing and the company has enticing offers like extended warranties. You want to be sure that you are going for a company that is tried and tested, and in the eventuality that something happens, at least you will get your money back.
  • Rely on Referrals: This is your first time doing business with a particular solar company, meaning that you don’t know them or what they are capable of. What better way to get a glimpse of their operations than by opting for companies that are referred to you by your friends and family

This way, you will have proof that they will do a great job and can rest easy knowing that the project will be a success.

  • Ask for Rebates and Financial Options: All this while, your goal is to save as much money as you can, and it will be a dream if the company you go for can help you achieve that.7
    Some offer solar loans, and others have lucrative rebate programs that can help your system pay off itself in no time; those are the companies that should be at the top of your shortlist.
  • Compare Quotes: Still, on the subject of reducing costs, you want a system that saves you the most money. The best and probably the only way to ensure this is by comparing the prices, which makes the selection way easier.

How To Pay for Solar Panels in Tennessee

Way back then, the only way that you could own solar panels was by paying cash upfront. Luckily, this system has changed, and there are now so many ways for you to become a proud owner with little or no cash in your pocket.

Cash is still a recommended way to go, although it is not practical for many Tennesseans. The upside of this is that you own the panels from the moment they are installed, meaning that paying for themselves becomes way easier.

Total ownership also guarantees eligibility for Tennessee solar incentives, particularly the federal solar tax credit. You don’t have all the $20,000 plus needed for the panels?

No problem; solar and personal, and HELOC loans are here to help with solar financing.22 There are various financial institutions willing and able to help you achieve your dreams in a few simple steps.

What is the best part? The repayment terms are very friendly, and anyone can afford them.

Imagine how comfortable you will be with a 15-year repayment period and 10% interest.

The only challenge with this is that it doesn’t guarantee savings from the word go.

You will have to pay off the loan first before you can start making real and actual savings calculations. But still, at least you will have ownership rights to the panels, unlike in the case of leasing.

In this last payment method, you enter into an agreement with a solar company, letting it handle everything for you at little or zero cost on your part.

Since the ownership remains with the company in question, there is no way for you to take advantage of the solar tax credit and other rebate programs.

Should You Buy or Lease Solar Panels in Tennessee

To lease or not to lease is probably the biggest dilemma when it comes to solar panel ownership.

Solar panels installed on the roof diligently capturing sunlight even on cloudy days.

(Image: Nigel Crawley31)

On one hand, you are thinking of foregoing most of the installation costs: on the other hand, you want full ownership of the panels, but you certainly cannot have both, so what should you do?

Consider the upsides and downsides of each.

Starting with buying and retaining total ownership. It means that you can start counting your wins as early as day one, and the most incredible part is that nothing can stop you from applying for solar incentives, which will significantly help reduce the total cost that you incur and reduce the repayment period.

The problem? You need to have all the cash up front, whether you are using your own savings or using solar loans as top-ups.

On the contrary, leasing spares you the headache of thinking about the installation costs and the maintenance too.

It is obviously the best way to own panels if you cannot afford the money necessary for the installation and don’t want to pay off loans.

But there is one problem. You will never ever own the panels, and it is clearly indicated in the contract you sign.

Anything you cannot move to wherever you want and cannot take up any solar rebate programs to help reduce the costs. Considering the pros and cons, you should know which one works best for you, and it is entirely up to you to make that decision.

Do Free Solar Panels Tennessee Exist?

Have you ever gone online to search for how to get solar panels for free? You may have looked at the cost of solar panels in Tennessee, wondering whether there is any chance that you can get the panels for free and maybe later deal with other costs.

Unfortunately, there are no free solar panels in Tennessee or virtually anywhere else unless you are talking about grants and other special instances.

It may seem confusing if you have previously heard people advertising free solar panels in your neighborhood. If the deal is too good, maybe there is a catch to it.

In this case, what the salespeople are enticing you into is solar panel leasing,23 a totally different concept from free solar panels. Well, one thing that is true is that you need very little to zero money down.

The company will promise to install the system up and running and will actually follow through with it. The catch?

You will have to pay a certain amount to use the equipment. It could either be a fixed charge or a varying rate according to exactly how much you have used all through the month.3

Then what is the difference with traditional utility bills?

Well, it may seem like the solar company now transforms into your utility provider of some sort, but the best part is that at least the rate will be significantly lower than the regular grid power. It may be the best option for you if you live in a rental or don’t know how else you can finance your solar panels.

How Favorable Are Tennessee Solar Incentives?

It is quite unfortunate that Tennessee doesn’t have Renewable Portfolio Standards, which has a lot to do with the few solar incentives available.

Solar panels installed on a grassy plain, tilted for optimal positioning, with a lush backdrop of numerous trees in the background.

(Image: DOE photo by Lynn Freeny32)

The only programs that you can take advantage of to help reduce the cost of solar panels include the federal solar tax credit, property tax exemptions, and local rebates from the local utility companies.

The incentives are not as favorable as those in other states, but still, solar panel installation is a sound investment.

What Are the Factors That Affect the Cost of Solar Panels in Tennessee?

The solar panel cost in Tennessee is not a one-size-for-all kind of thing. You will pay a certain cost depending on several factors, some that you can control and some that you have no option but to comply with.

For example, there is nothing you can do when your household has high energy needs, which means an increase in the system’s cost.

Luckily, you have a say when it comes to the type of panels and the solar company that you go for because they usually determine the price point. Also, if you want to reduce the cost of the panels, you can opt for cash financing and avoid solar loans which make your panels more expensive in the long run.

Is Solar Panel Installation Cost Tennessee Worth It?

As with any other prospective buyer of solar panels, a very important question that you need to address is, are solar panels worth it in Tennessee?

This is the final hurdle that you have to cross before you make the ultimate decision of whether you want your home or business to be solar-powered or not.

The answer to this question makes a huge difference; remember that solar installation is a life-changing investment, so you need careful thought before you decide.

Solar panels installed on the ground, positioned at a slight tilt, actively absorbing direct sunlight.

(Image: California Energy Commission33)

For one, utility bills all over the country have been on the rise, and there is no sign of them dropping any time soon. What you need is a fall-back plan for when the rates become too unbearable for you.

Solar panels are your safety net, whether you live in Tennessee or not, and you will come to realize that sooner or later.

There may not be as many Tennessee solar incentives as you would like, but at least there is the federal ITC and other local rebates to help.

What’s more, the cost of solar panels in Tennessee is lower than in other states, which makes it a better solar spot. What about plenty of sunny days?

In short, there is much more to appreciate when it comes to the Tennessee solar market that makes the investment worth every single penny.

If solar panel installation is appealing to you, go ahead and start the project. Being in Tennessee means that it will be even cheaper and it helps that there are plenty of sunny days, making your panels more efficient.

You don’t have to worry about the few solar incentives available because they don’t take away from the fact that the project is an excellent investment that you can enjoy for more than 20 years.

The few available Tennessee solar incentives, particularly the federal solar tax credit make the project worth venturing into, and it helps that the cost of solar panels in Tennessee is pretty low in comparison to that of other states.


1Brock, A. (2021, December 28). Tennessee Solar Incentives & Grants. Solar Alliance. Retrieved June 14, 2023, from <https://www.solaralliance.com/solar-panel-incentives-Tennessee/>

2Drolet, S. (2023, April 29). Is Rooftop Solar in Tennessee Worth It? CNET. Retrieved June 14, 2023, from <https://www.cnet.com/home/energy-and-utilities/Tennessee-solar-panels/>

3Kelly, S. (2023, January 17). How To Get Free Solar Panels in Tennessee. EcoGen America. Retrieved June 14, 2023, from <https://ecogenamerica.com/free-solar-panels-Tennessee/>

4Matthews, L. (2022, November 11). Tennessee Solar Incentives & Tax Credits for 2023. LeafScore. Retrieved June 14, 2023, from <https://www.leafscore.com/solar-guide/benefits-of-going-solar/solar-rebates-and-incentives/tn/>

5Neumeister, K. (2023, June 4). Solar Panel Cost in Tennessee (2023 Local Savings Guide). EcoWatch. Retrieved June 14, 2023, from <https://www.ecowatch.com/solar/panel-cost/tn>

6Olizarowicz, B. (2022, August 17). Tennessee Solar Incentives: Tax Credits & Rebates Guide (2023). Today’s Homeowner. Retrieved June 14, 2023, from <https://todayshomeowner.com/solar/guides/Tennessee-solar-incentives/>

7Smart Energy USA. (2021, October 15). 7 Great Tips on How to Choose a Solar Company in 2021. Smart Energy. Retrieved June 14, 2023, from <https://smartenergyusa.com/how-to-choose-a-solar-company/>

8Simms, D. (2023, June 3). 2023 Tennessee Solar Tax Credits, Rebates & Other Incentives. EcoWatch. Retrieved June 14, 2023, from <https://www.ecowatch.com/solar/incentives/tn>

9Solar Action Alliance. (2021). Solar Panels for Tennessee Homes: Tax Incentives, Prices, Savings. Solar Action Alliance. Retrieved June 14, 2023, from <https://solaractionalliance.org/solar-panel-installation/Tennessee/>

10DASolar. (2023). Tennessee – Energy Tax Credit, Solar Rebates And Incentives. DASolar. Retrieved June 14, 2023, from <https://www.dasolar.com/energytaxcredit-rebates-grants/Tennessee>

11Freitas, T. (2022, October 25). Tennessee Solar Incentives | 2022 Cost and Savings. SaveOnEnergy. Retrieved June 14, 2023, from <https://www.saveonenergy.com/solar-energy/Tennessee/>

12EnergySage. (2023). Tennessee solar rebates and incentives. EnergySage. Retrieved June 14, 2023, from <https://www.energysage.com/local-data/solar-rebates-incentives/tn/>

13U.S. Energy Information Administration. (2022, August 18). TENNESSEE State Profile and Energy Estimates. EIA. Retrieved June 14, 2023, from <https://www.eia.gov/state/analysis.php?sid=TN>

14Department of Environment & Conservation. (2023, June 14). Environment. Department of Environment & Conservation. Retrieved June 14, 2023, from <https://www.tn.gov/environment.html>

15JONES-ALBERTUS, B. (2021, July 28). Replacing Your Roof? It’s a Great Time to Add Solar. Office of ENERGY EFFICIENCY & RENEWABLE ENERGY. Retrieved June 14, 2023, from <https://www.energy.gov/eere/solar/articles/replacing-your-roof-its-great-time-add-solar>

16IRS. (2023). Inflation Reduction Act of 2022. IRS. Retrieved June 14, 2023, from <https://www.irs.gov/inflation-reduction-act-of-2022>

17United States Government. (2020, August). The United States Government Manual. United States Government. Retrieved June 14, 2023, from <https://www.usgovernmentmanual.gov/Agency?EntityId=GhacKVjXzfY=&ParentEId=+klubNxgV0o=&EType=jY3M4CTKVHY=>

18Solar Energy Technologies Office. (2023). Homeowner’s Guide to Going Solar. Office of ENERGY EFFICIENCY & RENEWABLE ENERGY. Retrieved June 14, 2023, from <https://www.energy.gov/eere/solar/homeowners-guide-going-solar>

19Solar Energy Technologies Office. (2023, March). Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics. Office of ENERGY EFFICIENCY & RENEWABLE ENERGY. Retrieved June 14, 2023, from <https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics>

20United States Energy Information Administration. (2022, September 1). https://www.eia.gov/todayinenergy/detail.php?id=53679. Record numbers of solar panels were shipped in the United States during 2021. Retrieved June 14, 2023, from <https://www.eia.gov/todayinenergy/detail.php?id=53679>

21U.S. DEPARTMENT OF AGRICULTURE. (2023). Rural Energy for America Program Renewable Energy Systems & Energy Efficiency Improvement Guaranteed Loans & Grants. USDA Rural Development. Retrieved June 14, 2023, from <https://www.rd.usda.gov/programs-services/energy-programs/rural-energy-america-program-renewable-energy-systems-energy-efficiency-improvement-guaranteed-loans>

22Office of Energy Efficiency & Renewable Energy. (2016, July 28). Paying For Solar – Tips For Financing a Residential System. Office of ENERGY EFFICIENCY & RENEWABLE ENERGY. Retrieved June 14, 2023, from <https://www.energy.gov/eere/articles/paying-solar-tips-financing-residential-system>

23National Renewable Energy Laboratory. (2023). Homeowners Guide to Leasing a Solar Electric System. NREL. Retrieved June 14, 2023, from <https://www.nrel.gov/docs/fy14osti/60972.pdf>

24Infrogmation of New Orleans. Attribution 2.0 Generic (CC BY 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/jY8qKF>

25Department of Environment & Conservation. TN Gov. Retrieved from <https://www.tn.gov/environment/program-areas/energy/state-energy-office--seo-/programs-projects/programs-and-projects/clean-energy-financing.html>

26brian kusler. Attribution 2.0 Generic (CC BY 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/34zvy>

27Solar Trade Association. Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/G2GUZJ>

28mjmonty. Attribution 2.0 Generic (CC BY 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/5VVBcL>

29U.S. Dept. of Housing and Urban Development (HUD). Flickr. Retrieved from <https://flic.kr/p/nqznfD>

30DOE photo Lynn Freeny. Flickr. Retrieved from <https://flic.kr/p/FBLA6S>

31Nigel Crawley. Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/b2QuF8>

32DOE photo by Lynn Freeny. Flickr. Retrieved from <https://flic.kr/p/bZ4b4b>

33California Energy Commission. Attribution 2.0 Generic (CC BY 2.0). Changed Format, Resized. Flickr. Retrieved from <https://flic.kr/p/o5JBQR>