Top 5 Solar Companies in tennessee

Below you’ll find the top solar companies in Tennessee as ranked by us and reviewed by verified solar customers. To learn more about what goes into our “Best Rank” score for each company, visit our How We Rank page. For our full Tennessee Solar Overview, keep reading:

Tennessee Solar Overview

While utility solar project installations in Tennessee have thrived over the past decade, the state’s residential solar market still leaves much to be desired. On a similar note, the Volunteer State has few solar incentives designed to relieve the financial burden for residents interested in investing in solar energy, and Tennessee’s solar policies offer little in terms of making solar more accessible.

Read on to learn more about the ins and outs of going solar in Tennessee.

Pros and Cons of Going Solar in Tennessee

Here's an at-a-glance description of the current benefits and drawbacks of switching to solar in Tennessee:

Benefits of Going Solar in Tennessee:

  • Tennessee Valley Authority Dispersed Power Program
  • No State Income Tax
  • 2/3 Property Tax Exemption
  • 100% Sales Tax Exemption
  • Fast Payback Period

Drawbacks of Going Solar in Tennessee:

  • No Lease or PPA Options
  • No Renewable Portfolio Standard
  • Below Average Electricity Rate
  • No Clear Interconnection Rules
  • No Solar Power Rebates
  • No Solar Renewable Energy Credits

Cost of Solar in Tennessee

Despite the relatively inexpensive utility rates that Tennessee residents enjoy, solar power remains the more cost-effective long-term solution. After 25 year, the average utility customer will end up paying about 24 cents per kilowatt-hour, which doesn’t seem like much, but compare that with the levelized cost of solar energy (meaning total system costs divided by its lifetime output in kWh) of 5 cents per kWh, and the difference is clear.

Upfront costs for a solar panel system in Tennessee are about on par with most states: about $19,500 for a 6.2 kW solar PV system. These costs are mitigated somewhat by the 30 percent federal solar tax credit, and can fluctuate based on solar capacity, energy efficiency, and solar installation costs.

Tennessee Solar Financing Options

In Tennessee, residents only have two options to pay for solar: direct purchase and solar loan. While both options require significant financial investment, both also entitle solar customers to significant financial incentives in the form of the federal tax credit. That said, other, more cost-effective methods of going solar (solar leases and power purchase agreements) significantly reduce the cost of solar and may be preferred for customers on a more limited budget.

Direct Purchase

Cash purchase for a 6.2 kW system in Tennessee will cost approximately $19,500. Applying the federal tax credit for solar energy systems, that cost gets ostensibly reduced to $13,650, give or take. While this is a huge upfront investment, It does allow customers to begin saving on solar right away.

A solar panel system of this size typically pays for itself after only six years, meaning customers will have nearly two decades of pure solar savings to enjoy. After 25 years of operation, customers will have saved more than $14,000 in energy costs. In that same time period, home value will have increased by an average of $10,000 to $11,000.

Solar Loan

Alternative to cash purchase is solar loan. With a solar loan, customers in Tennessee can still acquire an adequately sized solar photovoltaic system, but in most cases don’t need to pay any money upfront. This zero money down option with 15-year terms creates massive upfront savings.

Assuming a 6.2 kW system at $19,500, these savings will decrease every year of the loan. This is because total loan payments each year will exceed monthly utility bills over the same period. But, not to worry: after the loan is paid off after 15 years, the system will begin to recoup its losses. Over the next 10 years, customers will have netted an average of nearly $10,000. Not quite as much as with direct purchase, but considering the federal tax break and zero upfront costs, is still a good amount of money.

Tennessee Solar Incentives

Tennessee offers few true solar incentive programs to help ease the financial burden of solar power in the state. No solar power rebates from utility companies, and no tax credits from the state. The good news is Tennessee charges no state income tax, meaning buying power in the state is much higher than in neighboring states. Speaking of taxes, Tennessee does apply tax exempt status to solar array systems in two ways:

Tax Exemptions

The first is through sales tax. All solar equipment used to assemble the system (solar panels, solar inverters, rooftop and mounting equipment, solar backup batteries, etc.) is exempt from the 6–8 percent sales tax, which can result in hundreds of dollars of savings on a system worth nearly $20,000.

The other way is through a partial property tax exemption. When a solar panel system is installed, it has the potential to increase property value by up to 20 times the annual energy bill savings. Tennessee residents will be taxed on a third of that annual increase, rather than the full amount.

Tennessee Solar Policy Information

Policy-wise, Tennessee is at the back of the pack. With relatively affordable utility rates, no renewable portfolio standard or solar carve-out, and a lack of consistent interconnection standards, Tennessee has done little to make solar energy attractive or accessible to its residents.

Dispersed Power Program

The one bright spot in Tennessee solar policy actually comes from local power company Tennessee Valley Authority (TVA), which offers what it calls a Dispersed Power Program that operates very similarly to a net metering policy.

TVA's Dispersed Power Program credits customers for the surplus energy their solar panel systems contribute to the system, though customers shouldn’t count on getting the full retail rate for their power.

Tennessee Solar Statistics

The grand majority of solar installation projects in Tennessee are utility scale solar farms, with only a small fraction of the state’s 350+ megawatts (as of 2020) being attributed to residential installations. That said, with more than 2,500 total solar panel installations providing clean energy to more than 35,500 Tennessee homes, Tennessee currently ranks 30th among all states in terms of output and investment. The state hosts more than 100 solar installers and manufactures employing over 4,000 people.

Interested in a solar quote? Check out the top-ranked solar companies in Tennessee and read reviews from verified solar customers.