13.87¢/kWh, 1,363 kWh per kW, about 10.2 kW for an average home.
Average residential electricity price
13.87¢/kWh
Solar production per kW of panels
1,363 kWh a year
Average home electricity use
1,154 kWh a month
Solar system to cover that use
10.2 kW (about 26 panels of 400 W)
Simple payback at $3.20–$5.50/W
16.9–29.1 years
Payback assumes every solar kWh offsets a kWh at the state's average retail price (full net metering) and no federal tax credit, which does not apply to systems placed in service after December 31, 2025.
Electricity prices in Tennessee
The average residential price of electricity in Tennessee is 13.87 cents per kWh, the 43rd highest of the 51 states and D.C. For comparison, the U.S. average in 2024 was 16.48 cents. The higher your price per kWh, the more each kWh your panels produce is worth, so expensive electricity shortens the payback of solar.
The average home uses 1,154 kWh a month, above the U.S. average of 863 kWh. At today's average price, that energy costs about $160.06 a month, before fixed customer charges and taxes. Check your own numbers with the electric bill analyzer.
How much sun Tennessee gets
Each kilowatt of solar panels in Tennessee produces about 1,363 kWh a year, according to PVWatts for a fixed, south-facing system at the state's population center. That ranks 26th of 51; the median state produces 1,363 kWh per kW. Your roof's direction, tilt and shading can change this by 20% or more, so use your ZIP code in the solar calculator by ZIP code for a closer estimate.
At 13.87¢/kWh, one kilowatt of panels produces about $189 worth of electricity a year when each kWh offsets a kWh you would have bought.
Yearly use of 13,848 kWh (1,154 kWh × 12). Value at the average retail price with full net metering.
What a full system costs and pays back
Lawrence Berkeley National Laboratory found that most home solar systems installed in 2023 cost between $3.20 and $5.50 per watt before incentives. For the 10.2 kW system that covers the average home's use, that is about $32,505 to $55,867. Saving about $1,921 a year, it would pay for itself in 16.9 to 29.1 years, the 44th fastest of 51.
That is a best case. If your utility credits exported solar below the retail price (net billing), or your rates have high fixed charges, savings are lower and payback longer. Run your own quote in the solar payback calculator, which lets you set the value of exported energy.
Electricity use: the average monthly use of residential customers in Tennessee in 2024, from the EIA's annual electric utility survey (EIA-861, table 5.a).
Solar production: PVWatts v8 for a 1 kW fixed system facing south at a 20° tilt, with standard 14% losses, at the state's 2020 population center (PVWatts).
System size = yearly use ÷ production per kW. Panel count assumes 400 W panels.
Payback = installed cost ÷ yearly savings, with the 20th to 80th percentile of installed prices that Lawrence Berkeley National Laboratory found for 2023 (Tracking the Sun).
These are statewide averages. Your own use, roof and utility rate plan matter more than any average, so treat these figures as a starting point and check them with your bills and a quote.
The federal tax credit
The 30% Residential Clean Energy Credit does not apply to systems placed in service after December 31, 2025 (IRS), so the payback here includes no federal credit. State or utility incentives, if your area has them, would shorten it.
Frequently asked questions
How many solar panels does a house in Tennessee need?
To cover the average home's use of 1,154 kWh a month, about 10.2 kW, or 26 panels of 400 W. Your own number depends on your use and your roof.
How much does solar save in Tennessee?
A system that covers the average home's use would produce about $1,921 worth of electricity a year at the average price of 13.87¢/kWh, if every kWh is credited at the retail rate.
Is solar worth it in Tennessee?
At $3.20 to $5.50 per watt installed, the payback for an average home is about 16.9 to 29.1 years with full net metering and no federal tax credit. Lower export credits make it longer.