Alabama solar panels: The complete guide in 2024
Data updated Sep 17, 2024
Interested in going solar? You'll need to install a 13.36 kW solar panel system to cover the average electric bill in Alabama, which will cost you about $31,198 after the federal tax credit.
Cost for an average system in Alabama
As long as your federal tax bill is high enough, you can take advantage of the federal investment tax credit (ITC).
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- Overview
- Solar cost
- Incentives
- Electricity cost
- Companies
Going solar in Alabama
Alabama’s sunny skies, mild winters, and above-average natural gas prices make it a natural fit for solar panels––they'll reduce your carbon footprint and your reliance on the utility electric grid.
Factor in the federal solar tax credit, and Alabamans can cut the cost of solar by thousands of dollars, speeding up your payback period and increasing the value of your investment.
Here's what you should know about going solar in Alabama.
Cost
How much do solar panels cost in Alabama?
Solar panels will save you a lot of money over time, but the upfront costs aren't cheap. The average Alabama homeowner needs a 13.36 kW solar panel system to cover their electricity needs, which comes out to $44,569 before incentives. Prices range from $37,884 to $51,254, but after the federal tax credit, that drops by 30%.
While this may sound high, it will pay off in Alabama. That's why over 500 Alabama homeowners have used EnergySage to receive and compare quotes for solar installations. You can expect to earn back your initial solar investment through electricity savings in about 9.58 years, while most systems last at least 25 years. You'll often see this number referenced as your solar payback period.
There are a few ways to finance your solar panel system so you don't have to provide all that money upfront.
Cash purchase: You'll own the system and pay for it upfront. This provides the best long-term savings.
Solar loan: Allows you to retain ownership of your system, while owing little to no money upfront. Solar loans aren't all created equal: If you have access to subsidized clean energy loans through local incentive programs, that's usually your best bet. A home equity loan or a personal loan are often your next best options – private solar loans typically come with higher interest rates or upfront fees.
Solar lease or power purchase agreement (PPA): A third-party company owns your system and either leases you the solar panels (solar lease) or allows you to purchase the electricity they generate (PPA). These generally provide the lowest savings and generate the most negative press about solar. If you choose this financing option, read the fine print: You can get trapped in them for longer than you'd like.
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Incentives
What are the best solar rebates and incentives in Alabama?
Incentives help bring solar's price tag down considerably in Alabama. Here are the major ones to know about:
Incentive | Average savings in Alabama | Description |
|---|---|---|
Residential Clean Energy Tax Credit, formerly the federal investment tax credit (ITC) | $13,371 | Lowers your solar panel system's cost by 30% |
Alabama solar property tax exemption | 0.4% of your system’s cost, annually on average | If you use solar energy as a source of power, and your city or town approves your application, you won't need to pay a property tax for 10 to 20 years on the value your solar panels add to your property. |
Is net metering available in Alabama?
Alabama doesn’t offer net metering, but if you’re an Alabama Power customer, you can benefit from net billing. The catch is that the utility company only offers partial credit for every kWh. You'll have to sell the electricity to them at a significant discount compared to what they’ll charge you to buy that electricity back later.
Learn more about this solar buyback program:
Equipment
Equipment quality
Each year, solar panels get more and more efficient—that is, they produce more power per square foot. As of 2024, the most popular solar panels can produce about 400 watts of electricity when they’re in full sunlight. If you want to make the most of your roof’s solar potential, get panels with at least that much power output.
You should also make sure to select a solar inverter setup that makes sense for your roof’s layout.
And if you want or need a solar battery, be sure to pick one that can integrate cleanly with that inverter.
Premium equipment can come with a high price tag, but it will often save you more money in the long run. The best equipment tends to have the best warranty terms, often guaranteed to 25 years (sometimes even 40!), so you’re covered in case you need repairs or replacements. The highest-quality panels also degrade more slowly, so they’ll maintain more of their power output further into the future.
Companies
Who are the best solar installers in Alabama?
We pre-screen all of the solar companies on EnergySage to ensure they'll provide you with a high-quality installation. We then rate them based on their results, reputation, and responsiveness. Here are the highest-rated EnergySage installers in Alabama:
Ready to start looking for a solar installer?
Here are some of the most popular ones near you:
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resources
Top solar resources for Alabama
- Alabama Solar Loan Providers
Search through our list of top loan providers to finance your solar panel system.
- Alabama Department of Economic and Community Affairs
Learn about AL energy programs from the state government.
- Alabama Public Service Commission
Read more about how utility companies work in AL.
- Alabama Electricity Profile (EIA)
Learn about AL energy production and prices.
- AL State Solar Factsheet (SEIA)
See quick stats about how much solar energy has grown in AL.
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