What Tennessee has instead of net metering
The Tennessee Valley Authority supplies effectively all the electricity in the state, delivered through more than 150 local power companies and cooperatives. Nashville Electric Service is one of them.
Residential solar exports go 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 power would otherwise have cost TVA to supply.
That is a different arrangement from net metering in kind, not just in degree. Under net metering an exported kilowatt hour and a consumed one are worth the same. Here they are not, and the gap is large.
An interconnection agreement with your local power company is required to participate, which is what TVA Green Connect exists to arrange, alongside access to a network of Quality Contractors trained and approved by TVA.
Why a smaller system often returns better
Electricity you consume at the moment it is generated displaces electricity you would have bought at the retail rate, which in Tennessee has averaged around 13 cents per kWh. Electricity you export earns avoided cost, which is substantially less.
The first kilowatt hours a system produces are the ones most likely to land inside your own consumption, because your house always has some baseline load. The last kilowatt hours, from the marginal panels at the top of the design, are the ones most likely to be exported.
So the return on each additional panel falls as the system grows, and at some point the marginal panel is producing electricity worth avoided cost while costing full price. That is the point at which a bigger system stops being a better one.
This is why a system covering 70 to 80 percent of annual consumption frequently beats one covering 100 percent in Tennessee. It is not a compromise, it is the design the tariff actually rewards.
The questions that surface this
Ask what self-consumption share the savings model assumed: what percentage of generated electricity it expects your household to use at the moment of generation, rather than export.
Ask for the savings split into two lines, value from self-consumed generation at the retail rate and value from exports at avoided cost. A model that reports only a single net figure hides the assumption that matters most.
Ask to see a smaller system modelled alongside the proposed one. If a design covering 75 percent of your usage returns better than the one being sold, you want that on the page rather than in a footnote.
Ask what your local power company charges in fixed monthly costs and whether any of them change for a solar customer. Fixed charges do not fall when your consumption does, and they belong in the payback arithmetic.
Costing it out on TVA terms
The 30 percent federal Residential Clean Energy Credit under Section 25D expired for property placed in service after December 31, 2025, so a cash or loan purchase in Nashville receives no federal tax credit. Tennessee levies no personal income tax and therefore has no state solar credit either.
Section 48E, the commercial credit, survives at 30 percent for third-party owners under leases and power purchase agreements. Ask what a provider claims and what portion reaches you in the rate, and confirm with a tax advisor.
What exists is the electricity you displace at retail, the electricity you export at TVA avoided cost, and the difference between those two, which is what the design should be built around.
Ask any installer to rebuild the projection with those two lines separated and the self-consumption assumption stated. Then ask to see a smaller system modelled beside it.