Reduce Cost of Solar Panels In Alabama: Solar Incentives, Tax Credits

Georgette Kilgore headshot, wearing 8 Billion Trees shirt with forest in the background.Written by Georgette Kilgore

Solar Panels | March 29, 2024

Woman with solar panel gets cash from Alabama solar incentives that reduce the cost of solar panels in Alabama with solar tax credit (ITC), solar electricity rebates, and net metering AL power.

Alabama solar incentives and solar tax credits help reduce the cost of solar panels in Alabama just like in any other state.

These programs couldn’t have come at a better time when people are grappling with the ever-rising cost of energy bills; only a lifestyle change will be the perfect fallback plan for when the rates become unbearable.

There is no better alternative for residential and commercial buildings than solar power. The government and the state know this, and so should you.

Maybe the only hurdle to cross is the fact that solar panels can be quite pricey, and this is probably the main reason holding homeowners back from making the switch.

But before you panic, you should know that you don’t have to bear the burden all on your own.

In a bid to reduce the cost of solar panels in Alabama, there has been a push for Alabama solar incentives, especially at the local level.

If you are looking for the perfect time to invest, there may never be a better time than now, and this guide explains how to do it.

Solar Power in Alabama

Alabama ranks at number 29 in the entire nation when it comes to solar friendliness.

If the findings from the SEIA are anything to go by, then it means that there is still a lot of room for improvement in the solar market in the region.

A series of solar panels installed in a linear formation on a grassy terrain, positioned at an tilt angle.

(Image: Photo from Akwesasne Housing Authority22)

Other states have probably surpassed it due to their favorable policies that make the residents more at ease with the conversion.

Number 29 is not that bad, but it is alarming considering that it ranked at position 19 a decade ago.6 So what happened? A change in the regulations is most likely, but nevertheless, it doesn’t take away from the fact that solar power is the best form of energy in comparison to fossil fuels.

But all is not lost in the fight to make Alabama solar because the trends show that the price of the panels dropped by about 53% over the previous year, which is great news for the residents.

At the moment, there are approximately more than 500 MW of solar power installed, and as many as 60,000 homes can brag about running fully on solar power.

This means that there is great potential in the industry, and Alabama may soon become a solar power hub. It is also worth mentioning that the state is an excellent spot for setting up panels because of the plenty of sunny days.

While the national average is 205, Alabama boasts of a whole 213, meaning that you will never worry about the panels doing their job.

Mobile has one of the highest numbers of sunny days, at 218, followed closely by Montgomery with 214, and then Birmingham at 210. Lacking sunlight will be the least of your worries after installing solar panels in Alabama.

The State of Solar Farms in Alabama

The improving state of solar power in Alabama has a lot to do with the increase in the number of massive solar projects in the region.11

The solar farms in Alabama have played their part in ensuring that there is more access to solar power for both the residential and commercial sectors.

Map showing locations of solar plants in Alabama using yellow markers and Alabama solar panels with a US cut out showing the location of the state of Alabama.

They are multimillion-dollar projects that occupy massive parcels of land, but the solar farm income per acre and the number of locals benefiting from the projects make it all worth it.

There have been so many projects over the years, and the state can boast of moving from kW to MW system in just the last decade.

Take, for instance, the solar farm at the Coastal Response Center, which was the largest project in 2010, then later came the 156 panels installed in Anniston’s Museum in 2011.

These two had kW capacities and were the most notable at the time.

They, however, could not come close to the River Bend Solar and the LaFayette Farm set up in 2016 and 2019, respectively. While the first is a 75MW capacity that services the TVA grid, the other is a 79.2 MW station that supplies the power to Walmart.

Not forgetting the Covington Electrical Cooperative’s solar farm which is an integral part of community solar programs.

There is also the Black Bear Solar 1 (Montgomery) which is a 127 MW capacity station commissioned in 2017. However, the 227 MW Muscle Shoals farm completed in 2021 blows all these other plants out of the water.

It is one of those historical projects for the state and is a step closer to helping Alabama achieve its net-zero goals.

How Much Are Solar Panels in Alabama? (Cost of Solar Panels in Alabama)

Are you thinking of installing solar panels in your home or business? Well, the first thing to do is to find out how much the entire project will cost you.

You should know that the switch to solar power may be one of the most important and probably most expensive single-home renovations you will ever do. As such, you should expect up to a five-figure invoice for it.

So what exactly is the cost of solar panels in Alabama? You will part with anything between $22,050 to $26,950, which is basically for a typical residential system with a capacity of 9 kW- 11 kW (which is what most homeowners usually go for anyway).5

You will be excited to know that in comparison to other states, solar power in Alabama is slightly cheaper.

To put it more in perspective, the national average rate is $2.66 for each and every kW you install, but the average in Alabama is $2.45, making it slightly cheaper, but it makes a lot of difference if you get down to the numbers.

Another piece of great news is that you may not necessarily pay the exact amount for your solar panels.

In some cases, your system can cost you lower than the estimated average of $22,000, but be wary that the cost could also go up, which is based on several factors.

Another fact you should know is that Alabama has quite high energy bills and ranks number 6 in terms of energy consumption,12 meaning that most residents will likely install high-capacity systems to keep up with their needs.

Fortunately, this is great news for solar installers because it means that you will be able to make more savings in the long term.

How Does Solar Panel Cost Calculator Alabama Estimate the Cost of Solar Panels in Alabama?

You will likely come across solar panel cost calculators online, wondering what their deal is.

Before you dismiss them, you should know that they are probably the closest you can come to estimating the cost of solar panels in Alabama, even before you go physically shopping for solar companies and equipment suppliers.

A solitary solar panel is installed amidst a forest and positioned in a tilt.

(Image: Max23)

How does it work, then? You may ask. Simple.

The software is already designed to use basic information about your home to help in the calculation of rough estimates. Your part is to disclose the details very accurately to help the tool give you better estimates.

Based on how each is designed, you will have to answer a few questions.

One common question may be your exact location in Alabama because each city has its rules and average costs. It also helps to know your average monthly bills because the panels have to match your normal energy usage.

There will be more specific questions asked, and after entering all the details, the rough estimates should be out in no time, and you can use that info going forward with the process.

Factors Affecting the Cost of Solar Panels for Home in Alabama

The cost of solar panels is not fixed. Every household is unique, with special energy needs.

This is actually a good thing because it is easy to adjust your budget while creating a customized system that perfectly serves you.

The best part? The cost can go significantly lower, but be careful because it can also increase based on the following factors.

Energy Needs

As earlier pointed out, Alabama has a record of being a heavy energy consumer; coming at number 6 in the entire country makes a lot of sense.

As such, the utility bills can get pretty high. This changes your solar installation because you will have to find a system that can fulfill all your energy needs, a massive system in some cases.

As you already know, the more massive the setup, the more expensive it gets because it means that you will need more panels.

Your Equipment

The equipment you use for the installation is the most crucial factor in determining the cost of your entire installation. You obviously want an effective and long-lasting system, but that requires you to dig deeper into your pocket to buy the best quality equipment.

While you can always go for cheaper options, you might want to note that Alabama is right in the Dixie Alley and, as a result, is prone to cyclones, tornadoes, and hurricanes.

Imagine what such extreme weather would do to low-quality panels. It explains why your best bet must be durable and high quality because you want them to last past the 20-year mark, right?

Financing Method

How you choose to finance your solar panels makes a lot of difference.10,13 Look at it this way, imagine that your system costs $19,700.

You can either pay the full amount in cash or use a solar loan with a 5% interest rate, which requires an additional almost $4,000 by the end of it all.

In the same light, if you take advantage of the Alabama solar incentives, you can have them slash the cost, and the more of them you apply for, the cheaper your installation will eventually be.

The Solar Company

Do not dismiss this because you can either save money or lose some according to which company you go for for the installation.

Solar panels installed on a rooftop actively absorb sunlight.

(Image: Photo courtesy of DRI Energy24)

Here is why experts always advise prospective buyers to carefully make comparisons. hat’s the point of buying an expensive system that costs way less than another that is just as efficient?

What Are the Benefits of Solar Power in Alabama?

When you come to think of it, there must be a reason why more and more people are opting for solar power and doing away with grid electricity.

As an Alabamian, it must have come across your mind at some point, and the following are some things you are missing out on.

Cheap Energy

Like any other American, the high energy bills must have gotten to you, and you may be thinking of how to find an alternative power source that is cheaper than that from the grid. Not to worry, because setting up panels on your roof makes power easily accessible to you, and it is way cheaper. You can start saving from day one, and given that the panels will serve you for more than 20 years, you can imagine how much energy bills you could have otherwise paid for.

Energy Independence

How many times have you worried about blackouts in your neighborhood, maybe after weather interference or faults in the grid system? That will no longer be a problem when you go solar.

All you will rely on is the power that comes from your panels, which will work all through the day, and if you buy batteries, you will constantly have power even at night or on bad weather days.

Increase in Home Value

One of the perks of owning a solar-powered home is that its value increases. By how much does solar increase home value, you ask, a whole 4.1% and even more considering your location and other factors.

Solar Panels Installed on the roof directly absorb the sunlight.

(Image: Photo submitted by Chris Wingard25)

For example, your home’s value will go up by a bigger margin if you live in high-cost areas like Orange Beach, Fairhope, and Vestavia Hills.

Clean Energy

Are you eco-conscious? Are you always looking for ways to reduce your carbon footprint? You have hit the jackpot with solar power.

You can say bye to all the emissions from fossil fuels and fully run your house on clean power from the sun.9 If you take a closer look, the carbon footprint solar panels is not as high as other energy sources, and you will be doing the environment a great deal by making the switch.

One of the key concerns of eco-conscious buyers is what happens when the panels get old and have to be disposed of. Won’t they harm the environment?

Thanks to various recycling companies in the state, your used panels will safely be recycled and won’t end up in landfills.14

Alabama Solar Incentives

Nothing is more attractive for an investor than knowing that there are chances of reduced costs while the ROI stays the same or can even go higher.

You are the investor in question in this case, and a solar system is your investment. It might as well be considering that it can go to as much as $20,000.

If you are looking for Alabama solar incentives, here is a list of the available ones, how they work, and how much you can expect to save by making use of them.

Federal Solar Tax Credit

This incentive is the most highly anticipated in the whole of Alabama, if not the entire country. All thanks to the Inflation Reduction Act of 2022, the extension allowed new solar panel buyers to receive a 30% discount on their systems for up to 2032.

It may seem a little bit complicated at first, but it is actually straightforward.

How does it work? Say you owe a certain amount in taxes. If you install a $20,000 solar panel system, you are entitled to 30% of that ($6,000) as a tax credit.

This credit is deducted from the said amount of taxes that you owe the government. Whatever your tax liability is, minus the $6,000, that will be the amount of taxes you will pay in the end.2

For you to get a clearer picture of the ITC, consider a $28,175 solar system; deducting the tax credit sees that you save as much as $8,400, which is a lot of savings if you think about it.

None of the other Alabama solar incentives does this, and it explains why it should be the first one you jump into.

This goes to show that the program is one of the most lucrative solar incentives in the state and in the country since it has been in effect throughout the US since 2005.

Not only has solar installation become more and more affordable, but it has increased the number of solar-powered homes and businesses over the years.

Property Tax Exemption

By now, you know how the property tax system works in Alabama; the higher your property’s value, the more it will be taxed.

Therefore, if you make any home renovations that see your property value increase, you can expect to pay more money in terms of property taxes.

Interestingly, solar panel installation is a home improvement project, and you already saw earlier that it can increase your home’s value by 4.1% or more in some cases.

Does that mean that your property will be taxed based on its now new value? Not really, and it is all thanks to the property tax exemption in Alabama.

All homeowners are given a 10-year tax exemption, although you can apply to have it extended for another 10 years, bringing the total to 20 years, that is, for each and every installation.

Down to the numbers to give you a better perspective, imagine spending $28,000 on your project, and your property tax rate is multiplied by 0.325%.15 Taking this into account means that you will be exempted from about $1,900 for the 20 years of your panel’s service life.

The only issue with this incentive is that it is not very lucrative in Alabama, considering that the property tax rate is generally low. The savings are there, but you can save more if you live in another state where the tax rate is higher.

Net Metering

Net Energy Metering (NEM) is famous all over the country, and most states offer it, but not necessarily in the case of Alabama.

It is known for letting you save a lot of money that you would have otherwise used on utility bills. In this system, the locals liaise with their utility companies to provide excessive solar power from their systems.

In exchange, the utility providers give them credits which come in really handy to help offset their electricity costs.

It is sad news for Alabamians who were looking forward to this incentive, the state’s PSC has not made it mandatory for the companies to accept net metering or offer credits in exchange for solar power.

Many companies don’t see the need for it and force homeowners to invest in batteries to store excess power that can be in use at night or when the panels are not working that efficiently.

It is only a few utility companies, like Alabama Power and Tennessee Valley Authority, that extend the service to their customers.

They call it the PAE (Purchase of Alternative Energy) and the Green Power Providers, but the problem is that the NEM rates are lower than the normal retail prices.8

Local Solar Programs

As you can tell by now, Alabama doesn’t offer very many solar incentives for its resident.

But there is a ray of hope because some local incentives from various companies have stepped up to do their part to help make solar power more affordable.

A row of solar panels installed on the ground in a tilted position actively absorbing direct sunlight.

(Image: U.S. Navy Photograph by Mass Communication Specialist 2nd Class Daniel Barker/Released26)

The following are the programs that you should always be on the lookout for.

  • Alabama Power Rebates: If you are a loyal customer of the Alabama Power company, you can receive $200 because of setting up smart thermostats and $650 for buying and running a water heater.
  • Dixie Electric Cooperative Rebate and Loan Program: This is another power company that is stepping up to the plate to offer cash-backs when you install heat pumps. Apart from that, it is also famous for partnering up with banks to offer very affordable and flexible loans for those who want to make the switch to renewable energy.
  • Central Alabama Electric Cooperative Loan and Rebate Programs: Solar loans are in high demand in the region, and the company is playing a huge role in providing pretty affordable loans.
    The financing can go up to $20,000, especially when you couple the project with the installation of heat pumps. As if that’s not enough, you can also receive anything between $235 and $700 as rebates for setting up heat pumps and water heaters.

How Do Alabama Solar Incentives Reduce the Cost of Solar Panels in Alabama?

According to research,16 solar incentives and solar rebates from the government have a heavy impact on the solar market and the local people as well.

Take, for instance, the federal solar tax credit. Ever since its creation in 2005, there has obviously been a massive improvement in the rate of adoption of solar power in very many states, not just in Alabama.

Anyone would jump at the thought of having 30% slashed out of their installation cost, and that is exactly what the ITC has done.

The impact can be seen all over the country, and it has quite a lot to do with the reduction of the cost of solar panels over the last decade.

All the states have registered a decrease in solar power costs, all thanks to the popularization of the alternative energy source and the government’s unwavering efforts to make the industry more friendly.

Rebate programs have also been a part of the solar market’s success. The goal is to make it as attractive as possible, to pull in more and more buyers, and it has worked so far.

It is all in a bid to make the equipment cheaper, such that more people can afford it.

Solar loans have done a really great job when it comes to this because even those from low-income families can be able to finance their conversion.

The interest rates are lower and the repayment period a bit longer, and who wouldn’t want to take advantage of that?

Federal Solar Tax Credit as One of the Best Alabama Solar Incentives

Anyone will agree that the federal solar tax credit is one of the most lucrative programs from the government. The federal energy credits go straight to your tax liability.

Allowing you to save as much as 30% of your solar installation cost, and given the average cost of solar panels in Alabama, this can be a pretty huge saving.

The amount in question can even get to $8,000, depending on several prevailing factors. If you want to fully tap into the incentive, you may want to know exactly how it works.

Of course, the first step is to see the entire project through, either with your savings or solar loan. When it is up and running, you are free to start the application process from the IRS website.21

If successful, 30% of the amount will be deducted from the total taxes that you owe the government.

If one year is not enough to cater for the entire amount, the balance simply rolls over to the next years, and if still not enough, it will keep carrying forward for a maximum of five years.

But how does the solar tax credit work if I don’t owe taxes? You may ask. Unfortunately, in accordance with how the system was designed, only taxpayers who currently have a tax liability can claim it.

You will be shut out of the system if you don’t have a tax liability.

Alabama Solar Net Metering

Alabama net metering would have totally been a game-changer in matters of solar power in the state. Who knows, maybe it would have been one of the top-ranking when it came to conversion rates.

For now, that is nothing but a dream because net metering (NEM) is not a mandated policy by the government.4 This has proven to be a major setback for Alabama.

But you may wonder, why are other states boasting of more and more people opting for solar power and doing away with grid electricity? Simple. Favorable policies.

By them implementing Renewable Portfolio Standards, for instance, the utility providers have no other choice but to find alternative ways to increase their renewable power sources.

Finding it from the customers who made the switch is a genius idea and a win-win for both parties, in fact. If they fail to reach the stipulated percentage or don’t generate the amount of power that they should in the month, they face the music.

They are forced to pay heavy fines, and they would rather avoid it.

The only program in Alabama that comes close to the traditional NEM is the PAE from Alabama Power. The company opts to buy excessive solar power but at a lower cost than what you would have received if your power was coming from a grid.

What Is the Capacity Reservation Charge in Alabama?

It is now clear to see that the Alabama solar power laws are the ones holding back the state from reaching its full potential.

Not just a few available solar incentives, but there is another hurdle in the name of Capacity Reservation Charge, which has been in dispute for quite a while now. So what is it about, and how has it impacted the adoption of solar power in Alabama?

Basically, Alabama Power (the largest utility provider in the region) charges customers $25 or $5.41 for every kW.7

This is a monthly rate that the company charges for a standard roof system which is quite a challenge for homeowners wishing to earn returns for investing in their expensive solar systems.

While other firms in various states are looking for ways to make the market more favorable, the case is slightly different in Alabama because such regulations are actually deterrents.

According to the company, the fee is important because it prevents solar homeowners from shifting costs to other people. With good reason, the case to have it repelled is still underway, and Alabamians are waiting with bated breaths to see how it goes.

Is There an Alabama Solar Tax Credit?

Going by the impact that the federal solar tax credit has had on the solar market, it is warranted to have hope that states will also have their solar tax incentives.

Based on what has been happening in some states, the federal and the state tax credits can go hand in hand, and the residents can couple the two together to help save a fortune.

Unfortunately, the concept of a statewide solar tax credit is far from reality in Alabama. As a matter of fact, the state is still battling low numbers of local rebate programs, and implementing a tax credit is still not in the picture.

Others can boast of 25% from their state and 30% from the federal ITC, bringing the total amount of savings to more than half, a total dream come true for all those who want to make the switch.

Alabamians only have the federal solar tax credit as their fallback plan for when they want to make savings.17 That, alongside property tax exemptions and other local programs, will have to do as they keep hope alive that more favorable policies will come up in the future.

Does Alabama Have an SREC Program?

SRECs, otherwise known as Solar Renewable Energy Certificates, are one of the reasons why some homeowners choose to go solar.

It is available in various states and works in a very simple way, giving you credits for each and every kWh that comes from your solar system. It is an anticipated reward because, interestingly, you can sell the credits to companies (of course, for profit).

Companies that want to reduce their carbon footprints and the solar panel owners trade at open SREC markets, and it is quite an excellent idea, a win-win for both parties, really. Again, it is sad to realize that there is no such thing in Alabama.

There are no SREC credits or markets, and there is absolutely no way to receive them if living in the state.

State of RPS in Alabama (Renewable Energy Consumption)

Renewable Portfolio Standards, simply called RPS, is one of the reasons behind the success of net metering in the top states. It has also heavily contributed to the increased rate of conversion to renewable energy.

So how exactly has it achieved all this? Well, RPS calls for utility providers to generate a certain amount of their power explicitly from renewable sources.

Be it solar, geothermal, wind, or biomass, they have to reach the quotas by a particular date.1 This is a necessary push that has made companies create favorable net metering policies because when solar panel owners link to the grid, they can easily reach their targets for the month.

Pie chart showing Alabama renewable energy consumption including Alabama wind energy, biomass energy, geothermal energy, hydroelectric energy and solar energy in the state of Alabama for 2022.

They will make sure that the rates are comfortable, all in a bid to bring on board more people to support the idea. Are you wondering why Alabama is sort of lagging behind in solar power consumption? This is one of the reasons. It doesn’t have RPS.

Utility companies are complacent, not worried about being penalized for not meeting the agreed targets, and it further explains why the set rate by the leading utility provider is not enticing at all.

Having a strong RPS also pushes companies to come up with favorable incentives for prospective solar buyers to increase the production of renewable energy that transfers to them.

Factors To Consider Before Solar Panel Installation in Alabama

Undoubtedly, solar panel installation in Alabama, or anywhere else, is a great idea, not only because it reduces energy costs, but it also comes as a relief for the planet.

But still, you have to figure out whether this massive change is the right thing for you and your household. Are you making the right choice? Here’s how you know.

Is Your Weather Favorable?

Did you know that the prevailing weather determines whether your solar system will be effective or not? Not just that, you want to be sure that your panels will be safe in the case that cyclones and hurricanes hit your roof hard. How do you prevent these from happening?

One, getting a solar battery does a great job providing power even when there are heavy clouds or extreme weather interferences.18

Number two, if you fear that the punishing weather will be too brutal on your panels, you would rather go for high-quality and durable options, and in addition, you may also need a protection warranty.

What Are the Peak Hours and Sunny Days in Your Region?

As stated before, the weather is a crucial factor when it comes to the working of your solar panels.

Experts say that 4 hours a day are enough to run the solar panels, and Alabama has surpassed that, albeit by a small margin.

Map of the state of Alabama with each county colored to show the daily peak sun hours in each Alabama county ranging from 4.52 to 5.01 daily hours of sunlight.

Therefore, if your region has at least 4 sunlight hours every single day, you are good to go with the installation.

What Is the State of Your Roof?

Unless you are thinking about ground mounting (which is the most expensive installation), you may want to check the condition of your roof first.

Old, damaged, rusty roofs will not bear the weight of the panels and mark you; these are equipment that is supposed to stay put for as long as 20 years or more.

How To Choose a Company To Install Solar Panels Alabama

Ultimately, everything else narrows down to who you will choose as your guide through this entire process.

It is an important home improvement that changes your lifestyle, and basically, the person you trust to handle the job matters a lot.

It must be careful and well-researched because while you are going for affordability, you are also looking for impeccable service.

Two individuals installing solar panels on a rooftop.

(Image: Photo by Justin Holzgrove27)

One way to get a sneak peek into what the company does is to seek referrals from others who got the job done. You want to pay more attention to those with glowing reviews because that is exactly what you want.

But that’s not all; after making a short list, the next step is to start comparing the rates, find out which ones have discounts and incentives, and any other attractive offer that you would love to go for.

Your best bet is and should always be highly reputable companies with tons of experience and understanding of all the ins and outs of the Alabamian solar market. It also goes without saying that they should also be accredited and licensed.

How To Pay for a Solar Power System in Alabama

Once you have made up your mind about installing solar panels in your home or business, the next question is, how do you pay for it? Of course, cash is your first guess, right; but did you know that there are other payment methods?

It comes as a relief, especially if you will not be able to raise the entire $20,000 plus. Financial institutions have your back and can lend you the money if you need it.

Solar loans have been a crucial part of the increased conversion rates because many may find the upfront cost a bit overwhelming. What the program does is boost you, allowing you to get the money you need for the panels, then gives you an affordable rate and a flexible repayment period.

How To Get Free Solar Panels Alabama

It is without a doubt that solar panels can be pretty pricey, and there are various reasons for that. They were even more expensive a decade ago, and buyers had to get around that somehow.

A series of solar panels installed in a row on a rooftop actively absorb sunlight.

(Image: U.S. Dept. of Housing and Urban Development (HUD)28)

It may lead you to wonder how to get solar panels for free. Imagine what a massive bump that would be because you won’t have to deal with the purchase of the priciest part of the system.

So can you get the panels for free?19 Sadly, there is no such program, at least not for residential settings. But wait? What about all the adverts you hear about free panels and free installation?

Those are not what you think. They are a kind of way to pay for your panels but are called solar leases or Power Purchase Agreements.3

Basically, solar companies run these programs, and there are quite enticing. They offer you panels and install them for you at little or absolutely no cost.

Before you get all excited about this, one thing you should know is that the contract you sign clearly states that you have to pay for the service at the end of the month, either a fixed rate or according to how much you have used over the time frame.

What Are the Best Alabama Solar Rebates

It is quite unfortunate that Alabama doesn’t have that many solar rebates to choose from. There is not a wide list to select from, meaning that you will have to make do with whatever you have got to keep your cost low.

For now, probably the most lucrative and perhaps the most impactful out of the available Alabama solar incentives is the federal tax credit.

It is the most lucrative and the one that many prospective solar power owners anticipate.

There is no other way to get 30% off your total installation cost, and that is the highest amount of savings you can ever make because it can go to as much as $8,500.

The property tax exemption is next in line because it helps you save money, and you don’t even have to apply for it, except for when you want to make an extension.

But still, you never know if your local company may have additional programs to make use of. You can always ask your solar company or utility provider if there are any benefits that you can get for switching to solar power.

What Is the Near Future of Alabama Solar Incentives?

You can easily tell that Alabama solar incentives are not exactly the most attractive in the country.

There is still a lot that needs to be done to ensure that the policies are more favorable and more Alabamians will find the investment worth it.

A row of solar panels installed on a rooftop.

(Image: Photo by Jared Heidemann29)

Other states are relentlessly trying their best to improve their solar markets, and Alabama can borrow a leaf and that will bump it up a few steps in the solar ranking.

For now, all you have got is the federal solar tax credit at 30%, which is a countrywide thing, not just for Alabama. Apart from that, there is the property tax exemption and the local incentives from utility and solar companies.

Not much has been said about the creation of more incentives from the state, and you can only hope that a change will come, but for now, you want to take advantage of the available ones because remember that the ITC will reduce to 26% in a few years.

What Is the Cost of Solar Panels in Alabama?

Installing solar panels in your home or business in Alabama will set you back anything between $22,050 to $26,950. This is what it will cost you if your system is basically a 9 kW- 11 kW capacity.

There are also several factors that come to play that can potentially reduce the cost of the panels, and it is all based on your needs.

What Is the State of Alabama Solar Incentives?

Alabama doesn’t have a statewide solar tax credit and doesn’t really offer many incentives for its customers, that is, in comparison to other states.

But still, it doesn’t take away from the fact that there is the federal ITC, property tax exemption, and local programs from solar and utility companies. These incentives still go a long way to help reduce the cost of solar panels in Alabama.

Is Solar Panel Installation Cost Alabama Worth It?

Any homeowner will first ask, why are solar panels so expensive?

This may be one of the reasons why some find it hard to invest in it but note that the prices have significantly dropped over the last decade.20

Solar panels are installed in a tilted position, effectively capturing direct sunlight against a backdrop of blue sky and scattered clouds.

(Image: Photo by Janet Purchase30)

The few solar incentives available in Alabama also make it only worse to commit to it. But before you give up hope, remember what you are missing out on.

There are so many benefits of going solar that overpower issues with cost and inadequate solar incentives. Imagine no longer worrying about high energy bills and being completely independent of the grid.

Another reason why going solar in Alabama is worth it is the fact that it can take you slightly over ten years for the panels to pay themselves off.

That means that for the remainder of their service life, you will enjoy electricity at virtually no cost, and you can finally start making massive and actual savings. Remember that panels can serve you for more than 20 years, and this makes the hassle worth it.

Alabama is one of the states with the highest energy consumption rates. This implies that you are likely to spend more on energy costs, and what better way to reduce that burden than by going solar?

With solar energy, you don’t have to worry about financing because not only are there solar loans available, but you can also end up saving quite a lot thanks to the federal solar tax credit and other local rebates.

The Alabama solar incentives are not as hefty many as you would have hoped for, but still, it remains that the available ones come in handy to help reduce the cost of solar panels in Alabama and make your investment worth it.


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22Photo from Akwesasne Housing Authority. Flickr. Retrieved from <>

23Max. Flickr. Retrieved from <>

24Photo courtesy of DRI Energy. Flickr. Retrieved from <>

25Photo submitted by Chris Wingard. Flickr. Retrieved from <>

26U.S. Navy Photograph by Mass Communication Specialist 2nd Class Daniel Barker/Released. Flickr. Retrieved from <>

27Photo by Justin Holzgrove. Flickr. Retrieved from <>

28U.S. Dept. of Housing and Urban Development (HUD). Flickr. Retrieved from <>

29Photo by Jared Heidemann. Flickr. Retrieved from <>

30Photo by Janet Purchase. Flickr. Retrieved from <>