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Solar incentives · Tennessee · 2026
Solar rebates in Tennessee.
The federal, state, and utility solar incentives available in Tennessee for 2026, then matched to a vetted local installer.
Programs · Tennessee
5
active programs & rules in 2026
No net metering; TVA avoided-cost export purchase · verified 2026-09-01
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5 programs available right now in Tennessee.
Tax credit
#01
Federal Residential Clean Energy Credit (Section 25D) - ENDED
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025. Cash and loan purchases made now receive no federal tax credit. Tennessee has no state solar tax credit to fall back on, so a quote that still applies the federal credit is overstating your return with nothing at state level replacing it.
Source ↗ Tax credit
#02
Federal Commercial ITC (Section 48E) - via Lease / PPA
Section 48E, the commercial Clean Electricity Investment Credit, survives at 30 percent and is available to third-party owners of residential systems under leases and power purchase agreements. The provider claims it and may reflect part of the value in the rate offered. Ask what they claim and what actually reaches you, and confirm with a tax advisor.
Source ↗ Utility
#03
TVA Dispersed Power Production (DPP) - avoided cost, not net metering
Tennessee has no net metering. Under Dispersed Power Production, residential customers and businesses may sell all or part of their generation to TVA at TVA avoided cost, a wholesale-style rate well below the retail price of electricity. An interconnection agreement with your local power company is required to participate. Because exports are compensated at avoided cost while self-consumed electricity displaces the full retail rate, the two are worth very different amounts and a system should be designed around that gap.
Source ↗ Utility
#04
TVA Green Connect
Green Connect is the route TVA provides for residential customers going solar. It connects you with your local power company to establish the interconnection agreement, and gives access to a network of Quality Contractors trained and approved by TVA. Since an interconnection agreement is required for Dispersed Power Production, TVA advises applying for Green Connect as well where it is available to you.
Source ↗ Program
#05
No Tennessee State Solar Tax Credit
Tennessee levies no personal income tax, so there is no state income tax for a solar credit to reduce and none exists. National guides describing a federal credit stacked on a state credit are describing other states. Treatment of solar for local property assessment varies, so ask your county assessor directly how residential solar is assessed at your address.
Net metering · Tennessee
No net metering; TVA avoided-cost export purchase
Tennessee does not offer net metering. The Tennessee Valley Authority supplies effectively all electricity in the state through more than 150 local power companies and cooperatives, and residential solar exports are handled through TVA Dispersed Power Production, under which a customer may sell all or part of their generation to TVA at TVA avoided cost. Avoided cost is a wholesale-style measure of what the electricity would otherwise have cost TVA to supply, and it sits well below the retail rate a household pays. That produces a large gap between the two things a solar system can do with a kilowatt hour. Electricity you consume at the moment it is generated is worth the full retail rate, because you simply do not buy it. Electricity you export is worth avoided cost. Nothing accumulates as a retail-rate credit bank to draw down later. The practical consequences are that oversizing is penalised, that a system covering 70 to 80 percent of annual consumption frequently returns better than one covering 100 percent, and that shifting flexible loads into daylight hours is one of the few free improvements available. An interconnection agreement with your local power company is required, and because each of those 150-plus companies administers its own process and adds its own distribution charges, the specifics genuinely vary by address.
Worth checking before you sign:
taking a rebate can change your net-metering terms, and export credit rules
differ by utility. Your matched installer confirms the exact numbers for
your address.
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