Simplified schematic of a grid-connected residential photovoltaics power system
Solar power in Tennessee installed on rooftops is estimated to be capable of producing 23% of all electricity used in Tennessee, with 16,000 MW of solar panels. TVA has a Generation Partners Program that pays $1000 on sign up and $0.12/kWh above retail for photovoltaic systems of from 0.5 kW to 50 kW. Payments are for 10 years and are credited to customers monthly bill and paid either monthly or annually.
Federal law requires net metering upon request, but Tennessee is one of only four states without established policy, meaning that it needs to be negotiated with the utility. A more practical approach is to assume net metering by each utility. Net metering is simply an accounting procedure, and the only requirement is a bi-directional electric meter. Most meters are bi-directional. It is more practical for utilities to discover net metering instead of requiring registration and reporting, just as there is no registration or reporting requirement in connecting an air conditioner, which is instead discovered by utilities. Best practices call for perpetual roll over of kilowatt credits instead of converting to a monetary value.
A 2012 estimate suggests that a typical 5 kW system will pay for itself in about 14 years, and thereafter generate a net savings of $16,622 over the 25 year life of the system.
In 2012, Tennessee's largest solar installation is the 5 MW West Tennessee Solar Farm.