Solar Incentives and Rebates in Alabama

Peak Sun Hours (PSH): 4.5-4.7
Cost of Grid Power: $0.12/kWh
Number Of Installations: 157

What’s the Cost of Solar in Alabama?

Cost of Grid Power

Alabama's electricity prices average $0.12/kWh, down from $0.13/kWh last year and below the national average of $0.14/kWh. In 2019 solar made up about 3% of Alabama's renewable generation. Nearly all of this was installed in 2016. Currently there's very little small-scale solar capacity in the state.

Cost of a Solar Install

The average cost of a 5.5kW solar power system starts around $12,000 in Alabama. That system would save about $800 in the first year of operation, then pay for itself through energy savings within 6-7 years. System life can span well over 25 years, and savings will improve with inflation. Now only would such a system have a carbon offset equivalent to saving over 100 trees a year, but that reduction in carbon pollution will help slow the climate change that threatens many species and their hapitats.

State and Federal Solar Policies in Alabama

The federal solar Investment Tax Credit (ITC) currently refunds 26% of the cost of a solar power system. Grid-tie solar in Alabama is not really incentivized, as net metering generally yields pennies on the dollar for rooftop solar power sent to the grid.

Alabama tax code (Section 40-9B-1) provisions for a property tax abatement to any owner of a qualifying renewable energy facility. Basically this exempts property tax on any increase to a home's value resulting from a solar installation for the first 10 or 20 years of the system's life. Exemption claimants must apply through their municipal or county tax authority, which will review case-by-case using a process outlined by the Alabama Department of Revenue. The period of the term depends on in which jurisdiction the request is made.

Grid Interconnect Policies in Alabama

Alabama has no net metering or interconnection standards for solar, meaning that interconnection rules are set at the discretion of utility companies. The Tennessee Valley Authority (TVA) serves about 17% of Alabama, and offers a $1,000 rebate for a new PV system. With a grid-tie system, you can agree to sell up to all the energy you produce through their Green Power Providers program, at full retail price with an additional $0.02/kWh. Because Alabama doesn't have a Renewable Portfolio Standard (RPS), and utilities aren't required to meet minimum percentages of renewable energy generation, no other utilities in the state offer solar incentives.

Many states offer additional financial incentives and rebates for going solar. Alabama has over 70 solar policies to help you cover the cost of solar power - just check out the table below. Solar technology has improved to the point that, regardless of an individual state's policies, solar energy is an excellent long-term investment.

If you purchase your own solar panels, you can pay the cost up-front. Alternatively you can finance the solar power system with a solar loan, paying it off over the next several years. Alabama does not allow for Power Purchase Agreements, where a homeowner essentially rents out their roof to an energy company.

What Incentives are Available in Alabama?

Data from DSIRE. For more info visit:

Name Implementing Sector Program Type Administrator DSIRE ID
Wood-Burning Heating System Deduction State Personal Tax Deduction 46
Interconnection Standards State Interconnection 2952
Energy Standards for State Agencies State Energy Standards for Public Buildings 2972
Sand Mountain Electric Cooperative - Residential Heat Pump Loan Program Utility Loan Program 5240
TVA - Green Power Providers Utility Feed-in Tariff 5674
Low Income Home Energy Assistance Program Federal Grant Program 5711
TVA - Solar Solutions Initiative Utility Performance-Based Incentive 5721
Local Option - Property Assessed Clean Energy Financing State PACE Financing 5799
Alabama Power - EnergyDirect Utility Energy Analysis Alabama Power Co. 14900
Alabama Power - Technology Application Centers Utility Energy Analysis Alabama Power Co. 14901
Alabama Power - Heating, Ventilation, and Air Conditioning (HVAC) Training Center Utility Training and Information Alabama Power Co. 14902
Baldwin Electric Membership Corp. - Energy Use Analysis Other Energy Analysis Baldwin Electric Membership Corp. 15981
Sand Mountain Electric Cooperative - Comprehensive Services Program Other Energy Analysis Sand Mountain Electric Cooperative 17826
South Alabama Electric Cooperative - Energy Audits Utility Energy Analysis South Alabama Electric Cooperative 18811
Baldwin Electric Membership Corp. - Business Energy Savings Other Energy Analysis Baldwin Electric Membership Corp. 19201
Central Alabama Electric Cooperative - Green Power Choice Program Other Other Central Alabama Electric Coop 20257
Dixie Electric Cooperative - Green Power Choice Other Other Dixie Electric Coop 20343
Wiregrass Electric Cooperative - Green Power Choice Other Other Wiregrass Electric Coop, Inc. 20697
U.S. Department of Energy - Industrial Assessment Center (IAC): University of Florida Federal Energy Analysis U.S. Department of Energy 21869
Events Calendar State Green Building Incentive 21883
Park Electric Cooperative Inc. - Net-Metering Utility Green Building Incentive 21915
Alabama Power Co. - Ways to Save Utility Training and Information Alabama Power Co. 21964
Tennessee Valley Authority - EnergyRight Solutions for Business + Industry Utility Energy Analysis Tennessee Valley Authority 21966
Tennessee Valley Authority - Business Energy Advisor Utility Training and Information Tennessee Valley Authority 21967
Alabama Power - Electric Water Heater Rebates Utility Rebate Program Alabama Power Co 22059


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