Solar Energy

Multiple solar energy paths are available in Tennessee:

Utility-scale: Utility-scale solar projects are large-scale and harness substantial energy to feed into the power grid.
Commercial: Commercial solar offers organizations, from small businesses to large corporations and manufacturers, the opportunity to reduce operating costs, enhance sustainability, and provide a reliable, clean energy source.
Residential: Residential solar offers homeowners or renters the opportunity to integrate solar panels into their homes, contributing to energy independence and sustainability.

Select any energy path below for additional information.

Tennessee Solar Toolkit

About Solar Energy in Tennessee

The adoption of solar energy, or solar photovoltaics (PV), is on the rise in Tennessee across residential, commercial, and utility-scale use cases, driven by decreasing installation costs, available financial incentives, and a growing commitment to sustainable energy sources.

Residential solar energy growth is bolstered by federal tax credits and local initiatives that enable residents to install solar panels or participate in community solar programs. Large and small businesses are increasingly turning to solar to reduce energy expenses and leverage tax incentives, while utility-scale projects, significantly propelled by the Tennessee Valley Authority (TVA), are expanding the state's renewable energy capacity. These utility projects not only support TVA's renewable objectives but also supply clean, sustainable energy to meet regional demands.

Disclaimer: The information expressed in this toolkit is for educational purposes only and does not reflect the endorsement of a specific program, policy, resource, or organization. The toolkit does not constitute legal or tax advice and is no substitute for consultation with an attorney or tax professional. The toolkit provides links to other resources but the Department of Environment and Conservation is not responsible for the content on those websites.

Regulation and Policy

Regulation and policy play pivotal roles in the sustainable development of solar energy projects within Tennessee.

Tennessee’s Utility Structure

Tennessee is unique in the energy utility sector in that TVA, a federally-owned corporation, provides electricity to approximately 99.7% of the electricity service territory in the state. TVA is self-regulated with regard to fuel mix and associated power generation. TVA regulates the 153 local power companies (LPCs) that distribute TVA power in the Tennessee Valley region, which includes parts of seven states. The one electric distribution utility in Tennessee that is not served by TVA, Appalachian Power, is regulated by the Tennessee Public Utility Commission.

State Legislation

Tennessee has one statewide law that directly addresses solar development. During the 2022 legislative session, the Tennessee General Assembly established the “Decommissioning Law,” Tenn. Code Ann. § 66-9-207, which imposes requirements on solar power facilities regarding decommissioning obligations and the required removal of solar power facilities upon or prior to the expiration or termination of the solar power facility agreement. The Decommissioning Law includes requirements that must be present in agreements between landowners and owners or operators of solar power facilities entered into on or after June 1, 2022, the effective date of the legislation.

The original Decommissioning Law addressed solar-generating devices or structures at least 10 MW in size. However, effective July 1, 2024, the law was amended to apply to solar-generating devices or structures at least 5 MW in size. “Solar power facilities,” as defined in the Decommissioning Law, do not include solar-generating devices or structures less than 5 megawatts (MW) in size, measured at the point of interconnection; however, parties to a solar power facility agreement may elect to apply the requirements of the Decommissioning Law to smaller structures.

The 2024 legislation also tasks the TDEC Office of Energy Programs (OEP) with the responsibility of receiving and storing solar power facility agreements. Learn more about this process on the Statutory Requirements for Solar Facilities page.

The Tennessee Solar Energy Industries Association, TenneSEIA, has a list of Frequently Asked Questions regarding this legislation.

Zoning

Recognizing the balance between the rapid expansion of solar energy and the preservation of community interests and environmental integrity, local governments are empowered through zoning laws to steer the development of utility-scale solar projects. These zoning laws enable communities to dictate the use, location, and physical attributes of solar installations, thereby ensuring that such projects align with local values, aesthetics, and land-use priorities. This regulatory framework facilitates the thoughtful integration of solar energy into Tennessee's diverse landscapes and safeguards the rights of property owners and the broader community.

Model zoning ordinances are available from both TenneSEIA and the University of Tennessee Institute for Public Service’s Municipal Technical Advisory Service. Additionally, SolSmart, led by the Interstate Renewable Energy Council (IREC) and the International City/County Management Association (ICMA), created the Best Practice Guidance for Solar and Zoning - Accessory Use, which highlights the key components for organized, transparent, and consistent small scale solar energy regulations for zoning or land use codes, and provides examples of small and utility-scale solar ordinances from around the U.S. It should be noted that, in accordance with Tenn. Code Ann. § 13-7-203, a public hearing is required whenever a zoning ordinance is proposed.

Zoning is a critical tool for municipalities and counties, offering them the authority to shape the character of solar development in their jurisdictions. By establishing specific zones for renewable energy projects, local governments can direct solar developments to areas that minimize conflicts with agricultural lands, residential areas, and natural habitats. Requirements such as setbacks, buffer zones, and fencing are commonly implemented through zoning ordinances to mitigate visual impacts and preserve the rural and natural beauty of Tennessee's regions. Moreover, these ordinances can stipulate decommissioning plans, ensuring that solar facilities are responsibly dismantled at the end of their useful life and that the land is restored, maintaining the long-term viability of the land for future generations.

For more information and to see all available resources, visit the page most relevant to your needs:

Utility-Scale Solar Resources for Local Governments Utility-Scale Solar Resources for Landowners Utility-Scale Solar Resources for Developers Utility-Scale Solar Resources for the General Public

Commercial Solar Resources

Residential Solar Resources

The Economics of Solar

According to the Solar Energy Industries Association (SEIA), Tennessee’s solar market is valued at $1.3 billion, and 126 solar companies are currently operating in Tennessee, including 32 manufacturers, 51 installers/developers, and 43 other solar-related companies.

Solar Labor Statistics

The U.S. Bureau of Labor Statistics provides occupational data on solar PV installers, including projections on occupations within the solar industry, which are expected to continue to grow.

According to the 2023 U.S. Energy & Employment Jobs Report (USEER), the solar electricity power generation sector represented 5,123 jobs in Tennessee, and the Solar Jobs Census, most recently updated in 2022, noted 4,347 solar jobs in the state. This number is expected to continue to rise, according to the 2022 Tennessee’s Clean Energy Jobs Potential Through 2030, released by the National Renewable Energy Lab (NREL), which estimates that Tennessee could see up to 10,856 solar energy jobs by 2030.

Solar Projects and the Land

Tennessee has land that is well-suited for utility-scale solar, particularly in the western part of the state, where there are many acres of plains near connections to the electric grid.

Map of solar radiance in Tennessee from the National Renewable Energy Laboratory's National Solar Radiation Database.

While solar development may raise concerns about the loss of agricultural and undeveloped land, it is unlikely to be the primary driver of such losses in the coming decades as large, utility-scale, ground-mounted PV systems require between five and ten acres per megawatt (MW) of generating capacity, depending on the type of technology. For example, TVA plans to add 10,000 MW of solar generation by 2035 in its territory, which covers parts of seven states. If all of the planned 10,000 MW of solar power generation by TVA were developed on Tennessee farmland, it would account for approximately 100,000 acres or only 1% of the state's total farmland.

Additionally, Tennessee has already begun exploring agrivoltaics or dual-use solar projects, which involve grazing animals or the growing of crops between or under the solar panels, which allows for farmland to continue to be utilized. Currently, there are at least nine agrivoltaics projects on approximately 1,900 acres of land in the state. The U.S. Department of Energy (DOE) created the Farmer’s Guide to Going Solar to address questions that farmers may have about solar and agrivoltaics.

To protect farmland and undeveloped land from development, including solar projects, Tennessee offers several tools and resources:

The State's new Brownfield Redevelopment Area Fund, created by the General Assembly in 2023, aims to encourage the identification, investigation, and remediation of potential brownfield sites for redevelopment, which could include solar facilities.
The State's Heritage Conservation Trust Fund supports public-private partnerships to conserve land for tourism, outdoor recreation, natural and cultural resources, and "working landscapes."
Local governments can use zoning to encourage solar development in specific areas while protecting prime farmland and undeveloped land. For example, Bedford County has established a "renewable energy development zone" to streamline the approval process for solar projects within the zone and to set stricter standards outside of the zone.
Land trusts, such as the Land Trust for Tennessee, work with landowners to create conservation easements that permanently limit land development and subdivision.

Tennessee's solar facility “Decommissioning Law” (Public Chapter 866, Acts of 2022) requires solar power facility agreements to include a decommissioning plan with financial assurance. This ensures that solar developers will remove components and restore the land to its pre-construction condition when the project reaches the end of its life.

As Tennessee continues to expand its solar energy capacity, these tools and resources will help ensure that solar development is balanced with the protection of valuable agricultural and undeveloped land.

Residential Solar Energy

Residential solar installations continue to rise in popularity as costs decline over time. Choosing solar for your home can provide energy bill savings and increase a home’s resilience. A variety of resources available to support consumers interested in solar can be found on the Residential Solar page.

Protect Yourself from Fraud

Most of the fraud committed in the solar industry is happening in the residential solar market. Between 2020 and 2023, the Tennessee Attorney General's Office received 498 complaints against nine residential solar companies, with 477 complaints directed at two companies, according to the Tennessee Advisory Commission on Intergovernmental Relations’ report Managing Solar Energy Development to Balance Private Property Rights and Consumer Protection with the Protection of Land and Communities.

Consumers who purchase residential solar systems are protected by Tennessee's Consumer Protection Act and Home Solicitations Sales Act.

The Solar Energy Industries Association published a Consumer Guide to Home Solar in 2023 that features a long list of questions to ask prospective solar installers, as well as financing companies. Some of the recommendations include:

Make sure to get multiple quotes for a solar roof installation before committing.
Research the solar company. Ask for proof of licensure and check with the county or state to ensure the firm is in good standing.
Understand tax incentives and tax implications.
Understand available financing options. Options can include solar loans or home equity lines of credit. Each option has different payment schedules and qualification criteria.
Fully understand the warranty, including knowing what parts the warranty covers, what voids the warranty, and who is responsible for servicing it.
Know what happens if the company goes under.
Say no to high-pressure sales tactics, and research thoroughly before committing to a solar installer.

When looking for a reputable solar installer, request references and do not rely solely on online reviews. While most solar installers are professional and reliable, there are scams and disreputable businesses that may take advantage of consumers.

Some local utilities have staff available to speak to about solar installations. Call your local utility to find out if they have any resources or recommendations on the topic, and to find out whether they have a list of reputable solar installers available.

TVA’s factsheet, How Do I Choose a Qualified Solar Installer, provides a short reference for the types of questions to ask a solar installer.

Solar Industry Standards

Solar installations should be safe, reliable, and transparent. SEIA, an accredited standards-setting organization, is developing resources to empower customers and create national standards that promote fair sales practices and ensure the safe and uniform installation of solar and storage systems.

For additional information, SEIA provides consumers with resources such as the Residential Consumer Guide to Solar Power, model contracts, and disclosure forms.