Solar Panel Cost in Tennessee (2026)

Net metering: 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.