TennesseeSolar Incentives 2026: Tax Credits, Rebates & Net Metering

Tennessee does not offer a state income tax credit specifically for residential solar, and the federal residential credit does not apply to a system installed in 2026. Model the install at full cost unless a utility rebate or exemption still applies.

Tennessee does not have a statewide retail-rate net metering mandate. Most utilities offer some form of buyback program at avoided-cost rates, which typically value exported solar at 25-50% of the retail rate.

For TN homeowners, this often makes battery storage more attractive — keeping your generation onsite and consuming it directly avoids the unfavorable export rate. Top utilities: TVA, Nashville Electric, Memphis LG&W.

Tennessee credits exported solar at roughly ~25–50% of retail of the retail rate. See full Tennesseenet metering rates & rollover rules →

Solar installs in Tennessee average $2.85 per watt in 2026. A typical 8 kW system runs about $22,800 before incentives. The federal residential credit is $0. Illustrated cost with no state income-tax credit is $22,800.

Your price moves with system size, roof complexity, and equipment tier. Run the Tennessee savings calculator for a number matched to your actual electricity bill.

No — there is no government program handing out free solar in Tennessee. “Free solar” and “no-cost solar program” ads are leases or power purchase agreements (PPAs): a company owns the panels and bills you for the power. There is no residential federal credit for a 2026 install for either you or the company to claim.

Buying your system — with the incentives in your name — almost always wins on lifetime savings. Read the full breakdown of “free solar” offers →

3 major utilities operate in Tennessee: TVA, Nashville Electric, Memphis LG&W. Specific rebate availability varies year to year and is typically distributed first-come, first-served until annual budget caps are reached.

Before scheduling any installation, verify current rebate status directly with your utility — programs open and close throughout the year. Most Tennessee installers will pull up-to-date rebate data during a site assessment.

Tennessee does not currently offer a property tax exemption for solar. The added home value from a solar installation is generally included in the next assessment cycle.

Tennessee does not exempt solar equipment from sales tax, so installation invoices include standard sales tax on hardware components.

Compare Tennessee's solar incentive package side-by-side with adjacent states to see whether you live in a relatively high- or low-incentive market.