There can be solar tax credits and incentives available at the federal, state and local levels. The calculator above will show you the value of all incentives your home is eligible for.
The phrase “Alabama solar incentives” is a bit of an oxymoron, because the state legislature and public utilities commission here have done basically nothing to help homeowners add solar panels to their home. Instead, they allow the state’s largest utility, Alabama Power, to pay pennies on the dollar for excess energy generated by solar installations, leaving solar panel payback times at nearly the worst in the nation.
If you’re a truly committed environmentalist or a staunch DIY-loving off-gridder, you might find an investment in home solar well worth your money in Alabama. All others will likely not find a solar investment very favorable here.
Learn what solar incentives are available to Alabama homeowners
See what Alabama solar incentives you qualify for based on your utility company and city
Find out how much these incentives and/or Alabama solar tax credits will reduce your cost to go solar and add batteries
The federal solar investment tax credit will have the biggest impact on the cost you will face to go solar in Alabama
If you install your photovoltaic system before the end of 2032, the federal tax credit is 30% of the cost of your solar panel system. This is 30% off the entire cost of the system including equipment, labor, and permitting.
Example: If your solar energy system costs $20,000, your federal solar tax credit would be $20,000 x 30% = $6,000.
The federal tax credit falls to 26% starting in 2033.
With net metering in some states, you get full retail rate credit for the amount of electricity you send back into the grid with your solar panels.
If you get electricity service from Alabama Power, you can sign up for their special Rate PAE, which stands for “Purchase of Alternate Energy.” This isn’t exactly an “incentive,” per se, but does qualify as a way a solar installation saves its owner money over the long term.
Under rate PAE, your solar panels will reduce your bill in two ways. First, your panels will meet your home’s needs during the day while the sun is shining, which will reduce your bill by the full amount of any kilowatt-hours (kWh) you would have used. Second, if your panels produce more energy than you can use at any given time, Alabama Power will pay you a special sub-retail rate for the excess.
The most recent rates can be found here, but they are generally around $.03/kWh during peak times and $.025/kWh during off-peak times. As your panels produce more than you use during the day, that is the per-kWh credit you’ll get for each excess kWh. The credit you earn during each month will be subtracted from the amount you owe Alabama Power on your monthly bill.
Considering you pay about $.12/kWh of electricity from Alabama Power, it is not financially advantageous to be forced to sell excess energy back to the company for around 25% of that price. Rate PAE alone is enough to discourage people who want to go solar based on the potential financial return, but unfortunately, the deal gets worse when you consider Alabama Power’s Rate Rider RGB, which they also require you to accept when you go solar here.
Rate Rider RGB imposes a “Capacity Reservation Charge” of $5.00/kW on all solar owners. That means people with average-sized solar installations of around 6 kW will pay an extra $30 on their monthly bills. Considering the average monthly savings of a 6-kW system in Alabama are around $90 per month, the $30 fee reduces your net benefit from solar by one third.
At the current rates, the Alabama Power rate PAE and rate rider RGB mean a solar purchase in Alabama won’t pay back its initial investment until after 15 years. Not much of an incentive at all.
Unfortunately, Alabama does not offer any cash rebates for solar panels. The state does have one fairly decent solar incentive, however...
Alabama tax code (Section 40-9B-1) provides a property tax abatement for owners of qualifying renewable energy facilities. The abatement can exempt property tax on the additional value added to a home by a solar installation, for periods of 10 or 20 years, depending on the jurisdiction in which the request is made.
People interested in claiming the exemption must apply with their municipal or county tax authority, which will go through the review process outlined by the Alabama Department of Revenue.
Showing data for:
Prices based on a 10.2kW system, after 30% federal tax credit
7 solar companies in Alabama provide pricing on SolarReviews. Here are the best rated companies near you.
4.63 18 Reviews
Dawn B, over 1 month
CKR Solar was excellent from start to finish. I was skeptical of all solar because there are so many bad players, some even scammers. Action speaks louder than words and CKR Solar constantly did exactly what they said they would do. I worked with Iain King and he quickly gained my trust by being informative in language I understood. He let me talk to his other customers so I could hear about their experiences and I could ask them questions, that was a big deal to me! He explained the process and contract until I was comfortable. The timeline for install went as planned. The only slight hold ups were waiting for the permit and a couple days of rain. No big deal. The install crew was diligent, hard working and super clean. Once our permit was inspected, about a day after installation, I was up and running. Last month I received my first FPL invoice that “flat-lined”, only $33 which is cost of the meter I did not pay for any kilowatts. I have 2 connected properties and both are on CKR solar. Even with a loan on the panels and equipment, I’m paying less per month than just one of my properties FPL bills and I know exactly what that will be each month; I don’t have to wonder about the rising cost of energy. I don’t have adequate words to describe the value of a trust-worthy solar partner. Iain King and his team have earned my trust. If I ever buy another house without solar, I’ll be calling CKR solar; after all, I have them in speed dial. I wanted Solar to stabilize my energy costs for my upcoming retirement. I started talking to Kin Homes Solar. It was a bad experience. I compared Kin to CKR and determined that CKR could save me about 45%. So happy I found CKR.
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Dawn B, over 1 month
CKR Solar was excellent from start to finish. I was skeptical of all solar because there are so many bad players, some even scammers. Action speaks louder than words and CKR Solar constantly did exactly what they said they would do. I worked with Iain King and he quickly gained my trust by being informative in language I understood. He let me talk to his other customers so I could hear about their experiences and I could ask them questions, that was a big deal to me! He explained the process and contract until I was comfortable. The timeline for install went as planned. The only slight hold ups were waiting for the permit and a couple days of rain. No big deal. The install crew was diligent, hard working and super clean. Once our permit was inspected, about a day after installation, I was up and running. Last month I received my first FPL invoice that “flat-lined”, only $33 which is cost of the meter I did not pay for any kilowatts. I have 2 connected properties and both are on CKR solar. Even with a loan on the panels and equipment, I’m paying less per month than just one of my properties FPL bills and I know exactly what that will be each month; I don’t have to wonder about the rising cost of energy. I don’t have adequate words to describe the value of a trust-worthy solar partner. Iain King and his team have earned my trust. If I ever buy another house without solar, I’ll be calling CKR solar; after all, I have them in speed dial. I wanted Solar to stabilize my energy costs for my upcoming retirement. I started talking to Kin Homes Solar. It was a bad experience. I compared Kin to CKR and determined that CKR could save me about 45%. So happy I found CKR.
4.29 11 Reviews
Anonymous, over 1 month
The AISI contractor,JEFF MAX,who installed our solar heater is a trustworthy and professional person. He gave us accurate information about the solar product which is why we are satified with the results.The job was done quickly and neat.That was very important to us. The product is low profile and Im very pleased with that.AND the price was right!I recommend the AISI folks and this product to anyone looking to warm their pool and get more use out of it.
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Anonymous, over 1 month
The AISI contractor,JEFF MAX,who installed our solar heater is a trustworthy and professional person. He gave us accurate information about the solar product which is why we are satified with the results.The job was done quickly and neat.That was very important to us. The product is low profile and Im very pleased with that.AND the price was right!I recommend the AISI folks and this product to anyone looking to warm their pool and get more use out of it.
4.25 14 Reviews
Anonymous, over 1 month
Solar Technology Alabama installed a grid tied PV system on our gymnasium to help offset some of the energy consumed by 30 tons of air conditioning. Ron Holland is a very conscientious and knowledgeable person who takes the time to answer any question you may have about what he is installing. His employees are very professional and they will leave your job site as clean or cleaner than when they arrived. I would definitely recommend Solar Technology Alabama to anyone interested in on-grid or off-grid alternative energy.
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Anonymous, over 1 month
Solar Technology Alabama installed a grid tied PV system on our gymnasium to help offset some of the energy consumed by 30 tons of air conditioning. Ron Holland is a very conscientious and knowledgeable person who takes the time to answer any question you may have about what he is installing. His employees are very professional and they will leave your job site as clean or cleaner than when they arrived. I would definitely recommend Solar Technology Alabama to anyone interested in on-grid or off-grid alternative energy.
BOB, over 1 month
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Noor, over 1 month
Happy customer
3.75 1 Reviews
Anonymous, over 1 month
Coastal Solar did a top notch jog installing my high end 4.2 kw, 115/230v, grid tied, battery backup system. Charley Teigeler
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Anonymous, over 1 month
Coastal Solar did a top notch jog installing my high end 4.2 kw, 115/230v, grid tied, battery backup system. Charley Teigeler
3.61 7 Reviews
Leodan Montano , over 1 month
They install solar system with battery to my moms and I and said we won’t be paying for electricity anymore and our bill has been over $250 a month plus the system. On top of that the commission that their sales guy offer me still waiting on final payment. I wouldn’t recommend them at all!!!!!! They need to take ownership over this and choose well their sales team as they will say anything to sell you a system.
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Leodan Montano , over 1 month
They install solar system with battery to my moms and I and said we won’t be paying for electricity anymore and our bill has been over $250 a month plus the system. On top of that the commission that their sales guy offer me still waiting on final payment. I wouldn’t recommend them at all!!!!!! They need to take ownership over this and choose well their sales team as they will say anything to sell you a system.