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Tennessee Solar Calculator

Enter your TVA utility and monthly bill — get honest solar savings for Tennessee. Low $0.10/kWh rates mean longer payback than other states, but 25-year ROI remains strongly positive.

Your Tennessee solar inputs
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kW
Tennessee solar estimate
20 × 400W panels (8 kW system)
Recommended size for your bill: 11.2 kW
Monthly usage1,182 kWh/mo
Annual production (TN 4.4 PSH)10,278 kWh/yr
Self-consumed savings (6,681 kWh × $0.11/kWh)$735/yr
Exported power (3,597 kWh × $0.04 TVA rate)$144/yr
Total annual savings$879/yr
Gross system cost ($2.80/W)$22,400
Federal ITC (30%)-$6,720
Net cost after ITC$15,680
Property tax exemption (est., 20yr)$2,867
TVA Green Invest programAvailable — ask your LPC
State tax creditNone (TN has no state income tax)
Payback period17.8 yrs
25-year savings$21,970
Tennessee has the cheapest electricity in the US (~$0.10/kWh). This means longer payback periods than states with higher rates — but the math is still positive. Maximize self-consumption: solar used directly is worth your full $0.10/kWh rate; TVA exports pay only ~$0.04/kWh. Over 25 years, solar remains a strong investment.
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How to Use This Calculator

Enter your bill and select your power provider

Almost all Tennessee electricity comes through TVA (Tennessee Valley Authority), the federal utility that generates and transmits power across the Tennessee Valley. Local Power Companies (LPCs) distribute TVA power to end customers. NES (Nashville Electric Service) serves the Nashville metro; EPB serves Chattanooga and Hamilton County; MLGW (Memphis Light, Gas & Water) serves Memphis; Knoxville Utilities Board (KUB) serves Knoxville — all buy wholesale power from TVA. Select the LPC that serves your area.

Why Tennessee has longer payback — but still positive ROI

Tennessee has some of the cheapest electricity in the United States, with TVA rates around $0.10-0.11/kWh. This is genuinely good news for Tennessee households — lower bills mean lower monthly energy costs. But it also means solar's payback period is longer than states with $0.20-0.30/kWh rates. The math is still positive: a typical Tennessee solar system pays back in 12-18 years and generates significant savings over a 25-year lifespan. We show the honest numbers — no exaggeration.

Maximize self-consumption — not export

TVA's Generation Partners program pays about $0.04/kWh for exported solar power — far below the retail $0.10/kWh rate you save by consuming solar directly. This means the key to Tennessee solar economics is maximizing self-consumption: sizing your system to match your daytime usage, adding EV charging, running appliances during the day, or adding battery storage. A battery can store excess midday solar for evening use at full $0.10/kWh value instead of exporting at $0.04/kWh.

The Formula

Monthly kWh = Monthly Bill ÷ Electricity Rate Annual Production = System kW × 1000 × 4.4 PSH × 365 × 0.80 efficiency ÷ 1000 Self-consumed kWh = Annual Production × 0.65 (or capped at annual usage) Exported kWh = Annual Production − Self-consumed kWh Annual Savings = (Self-consumed × $0.10) + (Exported × $0.04 TVA rate) Gross Cost = System kW × 1000 × $2.80/W ITC Credit = Gross Cost × 30% Net Cost = Gross Cost − ITC Credit Payback = Net Cost ÷ Annual Savings

Tennessee uses 4.4 peak sun hours (PSH) statewide average — Memphis gets about 4.7 PSH, Nashville 4.4 PSH, Knoxville and Chattanooga 4.3-4.5 PSH. TVA's Generation Partners program pays approximately $0.04/kWh for excess solar exported to the grid — significantly below retail rate. This is why self-consumption is critical in Tennessee: every kWh consumed directly saves $0.10/kWh vs. the $0.04/kWh export payment. Size your system and usage habits accordingly.

Example

James — Nashville NES customer

James is in Nashville paying $130/month for electricity at $0.11/kWh through NES. He wants an 8 kW system and understands TN's low-rate environment going in.

Monthly bill$130 (NES, $0.11/kWh)
System8 kW, south-facing
LocationNashville, TN (4.4 PSH)

Result

Annual production~10,278 kWh/yr
Self-consumed savings~$737/yr
TVA export payment~$144/yr
Total annual savings~$881/yr
Gross system cost ($2.80/W)~$22,400
Federal ITC (30%)-$6,720
Net cost after ITC~$15,680
Payback period~17.8 years
25-year savings~$22,025

James's payback is longer than the Sun Belt states — that is the honest reality of cheap TVA power. But 25-year savings of $22,000 on a $15,680 net investment is still a solid return. If James adds battery storage to increase self-consumption from 65% to 85%, his annual savings climb and payback shortens. Solar in Tennessee is a long-game investment — not a quick win, but a reliable one.

FAQ

Tennessee has the cheapest electricity in the continental US, with TVA rates around $0.10-0.11/kWh — roughly half the national average. Solar's financial value is directly tied to the electricity rate it replaces. A kWh of solar in Connecticut (at $0.28/kWh) is worth nearly 3x as much as the same kWh in Tennessee. Additionally, TVA's export rate for excess solar (~$0.04/kWh) is well below retail, further reducing value from oversized systems. The result: Tennessee payback periods are typically 14-20 years vs. 6-10 years in high-rate states. However, 25-year savings are still substantial, and solar locks in stable energy costs against future rate increases.
TVA offers two relevant programs: (1) Green Power Switch lets customers purchase renewable energy certificates (RECs) in 150 kWh blocks — this does not involve your own solar system but supports green energy broadly. (2) TVA Green Invest is a program for large-scale renewable development, not typically applicable to residential solar. For individual homeowners, the relevant program is TVA's Generation Partners distributed solar program, which pays approximately $0.04/kWh for excess generation fed to the grid. Contact your Local Power Company (NES, EPB, MLGW, KUB) to apply for interconnection and Generation Partners enrollment. Note: TVA does not offer net metering at retail rates — this is a key distinction from most other states.
No — Tennessee has no state income tax (except on investment income, which is being phased out), so there is no state solar income tax credit. Tennessee also has no utility-level solar rebate programs comparable to Oncor in Texas or the RSIP in Connecticut. The primary financial incentives for Tennessee solar homeowners are: (1) The 30% federal Investment Tax Credit (ITC) — worth $6,720 on a typical $22,400 system; (2) Tennessee property tax exemption for solar systems — 100% exempt from added property tax; (3) TVA Generation Partners export payment (~$0.04/kWh); (4) Self-consumption savings at your full retail rate. Despite the absence of state incentives, the federal ITC alone represents significant savings.
Yes — but with realistic expectations. Solar in Tennessee is a long-term investment with positive ROI, not a short-payback decision. Here's the honest case for TN solar: (1) The 30% ITC significantly reduces net cost; (2) Solar locks in energy costs — TVA rates have risen historically and may continue to increase; (3) Property tax exemption provides ongoing savings; (4) Tennessee gets moderate but adequate sunshine (4.4 PSH avg); (5) Solar adds home value — studies show solar homes sell at a premium; (6) Environmental benefits — reducing dependence on TVA's coal-heavy generation mix. If you're expecting a 7-year payback like Arizona homeowners, Tennessee isn't the right expectation. If you're planning to stay in your home 15+ years, solar is financially sound.
EPB (Electric Power Board) in Chattanooga has been a national leader in smart grid technology and is generally solar-friendly for interconnection. EPB follows TVA's Generation Partners program for excess solar compensation (~$0.04/kWh). EPB's interconnection process typically takes 4-8 weeks for residential systems under 10 kW. EPB does not currently offer retail-rate net metering but the smart grid infrastructure means accurate metering and prompt payment. Chattanooga averages about 4.5 PSH — slightly better than Nashville. Contact EPB's customer service directly for current interconnection forms and timelines. EPB has also offered energy efficiency programs that may complement solar installation.

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